@Carl Tenancies-in-common (TICs) aren’t automatically classified as partnerships. The number of co-tenants needed for a co-tenancy to risk being classified as a de facto partnership is 35 co-tenants. See section 6 (page 9) of this IRS rev. procedure: https://www.irs.gov/pub/irs-drop/rp-02-22.pdf.
To answer the question posed by @given-2-fly, if you want the TIC to be considered a TIC and not a partnership, you need proportionately share income and debt and meet other requirements listed in the linked rev. proc. If you fail to meet all the requirements under section 6 of the IRS rev. procedure, then you risk be classified as a partnership. Again, a TIC isn’t a de facto partnership (business entity). If someone wanted a rental income split amongst co-tenants that’s not proportional to each co-tenant’s ownership interests, than they’d likely want to form a business entity.
Disclaimer: this post is general information related to public documents published by the IRS. This post doesn’t create an attorney-client relationship and doesn’t constitute legal advice. You should talk to a tax attorney or professional for specific tax guidance.
