Check you state's partnership laws.
If you didn't write a partnership contract it often reverts
to one of two cases: equal shares among partners or share
prorated to capital contribution of each partner. Sounds
like yours is a case for the first, so split all costs and
gains that way.

For the amount money involved you really should have
written a partnership contract to cover when things
go wrong - like a life-changing or financial event for
one of the business partners. Things do wrong more
often than one would like.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

rizkar[at]yahoo.com wrote:

- quote -

Sounds like you had a partnership. Check with a local tax
professional.

Missy Doyle

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I purchased and sold a secondary home for investment
purposes last year. My brother and I went in 50/50 on the
entire deal, including the downpayment and mortgages and the
proceeds from the sale. Our joint names are on the home
purchase and sales documentation.

We essentially flipped the property, holding it for only 2
months and we did not rent it out for any period of time.
I'm a bit unclear on how we should file taxes for this
short-term capital gain. Assuming we purchased the House for
$150K, Sold it for $200K, and paid $10K in other costs
(closing costs, RE Agent fees, etc.) -- i.e. we made a
combined total of $40K in profit:

1) Should we each just file a short term capital gain for
half the total profit -- i.e. $20K each?
2) How do we account for Mortgage Interest paid for the 2
months we owned the place? Do we split that interest 50/50
as well?
3) Can we deduct Property Taxes for a secondary home? Do we
just split this 50/50 in our individual tax returns as well?

Or am I completely off base, and is there a different way to
file taxes for a joint venture like ours?

Thanks in advance for your advice,
RK.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >