I have a 1099-MISC but it is rental income shared with my ex-husband. Do I only put 1/2?

[ColeenD3 · Accepted solution]

If you have the full amount, you will have to include the full amount to match the 1099. However, you can expense his half as a miscellaneous expenses with an explanation.

[Opus 17]

I suspect that you need to be filing a partnership return if you are involved in real estate with someone who is not your spouse.  That's a form 1065, and requires Turbotax for Business, which is a different program than "Self Employed" or "Home & Business" and is only available to install on a PC, there is no online or Mac version.  A 1065 partnership return will issue a K-1 statement to each partner that goes on their personal return.  the deadline for form 1065 is March 15, not April 15, and the late fee is $195 per month per partner.

You may want professional advice.

@Carl @Hal_Al @DoninGA  do you agree?

[DoninGA]

@Opus 17 Agree

[Hal_Al]

@Opus 17 Disagree

Although it's not wrong to report it as a partnership; they can just each report their half on Schedule E.  I agree with @ColeenD3 , she reports all the 1099-Misc as income, but deducts half as other expenses with an explanation

[Opus 17]

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@Hal_Al wrote:

@Opus 17 Disagree

Although it's not wrong to report it as a partnership; 

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Unmarried, co-owning real estate?

[Carl]

It can be done either way. But in the case of having to deal with an "ex", I would prefer the 1065. Not only is it easier/simpler for the given situation, it also removes all doubt as to who reports what.

Legally speaking, if the 1099-MISC has your SSN/TIN on it, then you and only you are liable for reporting that full amount. You report less, and you'll have some 'splainin' to do with the IRS down the road. You may very well be able to explain it just fine to the satisfaction of the IRS. But do you really want that headache?

[M-MTax]

A 1065 is a terrible idea and go ask @AmeliesUncle about this who will tell you that the co-ownership of property....even if it produces income....does not create a partnership. These two are better off reporting their shares on their own returns and forget about the hassle of a 1065 and K-1s. If one gets a 1099 for all the income that person can report as getting 1/2 as nominee for the other.

[AmeliesUncle]

It is not me saying it; it is the IRS that says it when defining a Partnership in the 1065 Instructions:

A joint undertaking merely to share expenses isn't a partnership. Mere co-ownership of property that is maintained and leased or rented isn't a partnership. However, if the co-owners provide services to the tenants, a partnership exists.

https://www.irs.gov/instructions/i1065#idm[phone number removed]032

And I agree, Schedule E seems easier and less risky than relying on an 'ex' for a "Partnership" (which usually required agreement with each other).

[kateaux1-gmail-c]

Thank you everyone! 

[Carl]

However, if the co-owners provide services to the tenants, a partnership exists.

Even if the unmarried (or separated/divorced) co-owners don't provide services, it "could" still be a partnership reported on the 1065. In such a case where services are not provided, all data from the K-1's issued by the partnership would still end up on the SCH E (page 2) of each partner's 1040 tax return, as it should in such a scenario.

[Critter-3]

If nothing else ... going forward make sure there are TWO 1099 forms issued ... one in each name for that person's portion of the income  if you are not going to do a partnership.