Whether partnership exist or not for federal income tax


Question: Ben, Chris, and Daniel each own a one-third interest in unimproved real estate. They share equally in the expense of maintaining the property. Which of the following is the most important in determining whether a partnership does or does not exist for federal income tax purposes? A. Whether they actively carry on a business or financial venture and divide the profits there from. B. Whether their activity is characterized under state law as a joint venture or a partnership. C. Whether they lease the property. D. Whether the partnership agreement is oral rather than written.

 

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