for their return, you may be able to file as a qualified joint venture (provided the partnership is not an LLC) . no partnership return is required.
Business owned and operated by spouses. Generally, if you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership and you must file Form 1065.
Exception—Qualified joint venture. If you and your spouse materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make an election to be treated as a qualified joint venture instead of a partnership. By making the election, you will not be required to file Form 1065 for any year the election is in effect and will instead report the income and deductions directly on your joint return.
A qualified joint venture conducts a trade or business where the only members of the joint venture are a married couple who file a joint return; both spouses materially participate in the trade or business (because mere joint ownership of property isn’t enough); both spouses elect not to be treated as a partnership; and the business is co-owned by both spouses and isn't held in the name of a state law entity such as a partnership or limited liability company. To make this election, you must divide all items of income, gain, loss, deduction, and accordance with your respective interests in the venture. Each of you must file a separate
Schedule C or F (Form 1040). On each line of your separate Schedule C or F (Form 1040), you must enter your share of the applicable income, deduction, or loss. Each of you must also file a separate Schedule SE
(Form 1040) to pay self-employment tax, as applicable. Electing qualified joint
To make the qualified joint venture election for 2021, jointly file the 2021 Form 1040 or 1040-SR with the required schedules. This generally doesn't increase the total tax on the return, but it does give each spouse credit for social security earnings on which retirement benefits are based, provided neither spouse exceeds the social security tax limitation. Once made, the election cannot be revoked without IRS consent. If you and your spouse filed a Form 1065 for the year prior to the election, you don't need to amend that return or file a final Form 1065 for the year the election takes effect.
For more information on qualified joint ventures, go to IRS.gov/QJV.
for her cgs section show the portion transferred to him as withdrawn for personal purposes and on his show as purchases.
