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My wife and I own an interest in a partnership. She participates actively, but I do not. Can we have differing interests even

San Diego, CA |

though our K-1's will end up on the same tax return? The business shows a loss, so I think her loss is ordinary for offset against her ordinary other income. But I only have a money interest in the partnership and will show it as passive. According to my studying, if one spouse participates then the other spouse qualifies, even if the other spouse did not have any interest in the activity (but I do have an interest).

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Attorney answers 1


Yes, you can differing interests. And with CA's community property law each of you owns 1/2 of the other's interest anyway.

Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.

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