I will definitely seek tax advice first thing tomorrow morning. I googled partnership formation and stumbled on the IRS publication regarding partnerships and their formation. I understood in theory what has been kindly explained by everyone above.
That being said, here is a cut & paste of what the IRS says (and it makes it sound as though my particular "partnership" can be excluded and is unnecessary?) The red highlighted words are my doing:
Exclusion from Partnership Rules
Certain partnerships that do not actively conduct a business can choose to be completely or partially excluded from being treated as partnerships for federal income tax purposes. All the partners must agree to make the choice and must be able to figure out their own taxable income without figuring the partnership's income.
Investment partnership:
An investing partnership can be excluded in the participants in the joint purchase, retention, sale or exchange of property meet all the following requirements.
They own the property as co-owners.
They reserve the right separately to take or dispose of their shares of any property acquired or retained.
They do not actively conduct business or irrevocably authorize some person acting in a representative capacity to purchase, sell, or exchange the investment property. Each separate participant can delegate authority to purchase, sell, or exchange his or her share of the investment property for the time being for his or her account, but not for a period of more than a year.
Food for thought... am I misinterpreting what the IRS is saying?
Thanks for reading and sharing
