JV deals - do you put both entities on the deed and/or title?

[Dave Blackman]

Good afternoon all,

Taking a quick census here for all the JV veterans as to whether you put both your entity and your JV's entity on (as say, 50/50 ownership):

a) Note deed itself

b) Property title if you take the property back (through foreclosure/deed in lieu, etc)

I've seen both, as there appears to be some confusion as to the best way to avoid IRS taxing the JV as a partnership. Do you issue a K-1 to your partner or a 1099 at year end?

Assume anyone offering JV's has consulted with their CPA's and Tax Attorneys -- and I realize that most of you are not those yourselves -- just looking to see if there's a consensus, with the caveat that it may differ somewhat state to state (I'm in California). Maybe @Brandon Hall has some thoughts?

[Adam Adams]

From my CPA, JVs do not require 1099. However, you want to be able to show money leaving the company and the best way to do that is to issue 1099. Otherwise it could create a red flag for the IRS to check out your books. So we do issue 1099s when there are distributions. For expenses, we provide a balance sheet as the JV gets to realize the expenses when they provide workout funds.

At AJA, we do not put the JV on any part of the chain of title. Our view is that this is a Lead / Passive relationship and putting the passive on the deed or assignment puts that passive partner in a decision making role. While we always consult with our partners while making the big decisions on what to do with the assets, we still maintain the decision making role in the JV. As far as proof of equity, our JV agreements creates a 50/50 equity split in the asset, so the need to put the JV on the title is not needed.