@Mike9241 wrote:
the above is from the IRS instructions for a partnership return. it would seem your venture meets the definition of a partnership.
Except the regulations under the same code section you mentioned state, essentially, that the co-ownership of property that is maintained, kept in repair, and rented or leased does not constitute a separate entity for federal tax purposes.
Regardless, there does not really appear to be much risk involved if the co-owners report their shares (income and expenses) on their Schedules E rather than from a K-1 (1065). The rental income and expenses would be exactly the same in either case.
