Jointly owned property.

You and your spouse must operate a business to make this election. Do not make the election for jointly owned property that is not a trade or business.

Only businesses that are owned and operated by spouses as co-owners (and not in the name of a state law entity) qualify for the election. Thus, a business owned and operated by spouses through an LLC does not qualify for the election of a qualified joint venture.

Making the election.

To make this election, divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse based on your respective interests in the business. Each of you must file a separate Schedule C or F (Form 1040). Enter your share of the applicable income, deduction, or (loss) on the appropriate lines of your separate Schedule C or F (Form 1040). Each of you may also need to file a separate Schedule SE (Form 1040) to pay self-employment tax. If the business was taxed as a partnership before you made the election, the partnership will be treated as terminating at the end of the preceding tax year. For information on how to report the termination of the partnership, see Pub. 541 .

Revoking the election.

The election can be revoked only with the permission of the IRS. However, the election remains in effect only for as long as you and your spouse continue to meet the requirements to make the election. If you and your spouse fail to meet the requirements for any year, you will need to make a new election to be treated as a qualified joint venture in any future year.

Employer identification number (EIN).

You and your spouse do not need to obtain an EIN to make the election. But you may need an EIN to file other returns, such as employment or excise tax returns. To apply for an EIN, see the Instructions for Form SS-4 or go to IRS.gov/EIN .

Rental real estate business.

If you and your spouse make the election for your rental real estate business, you must each report your share of income and deductions on Schedule E (Form 1040). Rental real estate income is not generally included in net earnings from self-employment subject to self-employment tax and is generally subject to the passive loss limitation rules. Electing qualified joint venture status does not alter the application of the self-employment tax or the passive loss limitation rules.

More information.

For more information on qualified joint ventures, go to IRS.gov/QJV .