Small Business and Work Opportunity Tax Act
- United States
- 08/07/2007
On May 25, 2007, the President signed into law the Small Business and Work Opportunity Tax Act of 2007 which, effective for tax years beginning after December 31, 2006, permits a “qualified joint venture” to elect out of the Subchapter K partnership rules of the Internal Revenue Code. Pursuant to new subsection 761(f), a “qualified joint venture” means any joint venture if (i) the only members of the joint venture are husband and wife, (ii) both spouses materially participate in the trade or business of the joint venture, and (iii) both spouses elect not be treated as a partnership for tax purposes. Subsection 761(f) essentially gives spouses the option to treat any “qualified joint venture” as a disregarded entity for federal tax purposes, avoiding the need to file a separate partnership tax return.
