Subject: Joint-Venture Taxation Expert: taxman at centa.com Date: Thursday February 15, 2007 Time: 12:08 AM -0500 QUESTION: In short: How are 'venturers' taxed in a Joint Venture? Details: I have been asked to par take in JOnt Venture, a short project, that two to three business' will take part in until the project is complete, then we will all go our seperate ways(back our regular business). I am not bringing any money into the business, as the others have more capital to invest, I will however be given truck, a computer, and some tools - in exchange for my 'brains'. Do I run the risk of being considered by CRA, an employee, instead of a 'venturer'? I get to keep all this assets by the way. And once the business makes money, and we assume it will, do I run the profits through my existing business where I am a proprietor, or what happens? I guess this is where I come back to my question. Please help - I am very confused and what to do some tax planning for myself. -------------------------------------------------------- david ingram replies: There may be three joint venturers and each may end up being taxed differently depending upon how they have "entered" the joint venture. As described, there would likely be a T2124 filed for the partnership and you would put your 1/3 on line 135 of your personal tax return. Any more, and you are going to have to sit down and pay someone for a consultation to decide how you are going to be part of the joint venture. If there are large amounts of money involved, you might want to enter the joint venture as a corporation. Even though I advise 99 out of a 100 people NOT to incorporate, if you are going into business with deep pocket partners, it is really easy for them to leave you holding the bag if something goes wrong. i.e. if one of the other joint venturers is operating as a corporation and causes a large bill to be run up, all members of the joint venture are liable for the bill. If you had two zero asset joint venture corporate partners, "your" house is on the line because of "their" actions. ----------------------------------------- David Ingram's US / Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists My Home office is at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. 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