Tax Consequences of Partnership

[Wendy Vaidic]

Hello.  

We are working on a joint venture with a homeowner to flip his home in Florida.

As part of the agreement, he would receive a set amount for his home along with a monthly holding fee until it is sold to the end buyer.  

We would be paying the payments on a small mortgage he currently has on the property.  Also, we would be funding all of the repairs and improvements and would receive all funds above his agreed-upon set amount.

Since he would be the owner of record when we sell it to the end buyer, would he be hit with a larger tax bill because of the money we make on the house or would we each be responsible for taxes on our portion of the proceeds?

Have you ever worked under an agreement similar to this, and if so, how did it work out?

Anything I need to look out for when setting up the agreement?
Thanks!