! spouses as co-owners (and not in the name of a state

CAUTION 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 QJV.

Making the election. To make this election for your rental real estate business, check the “QJV” box on line 2 for each property that is part of the QJV. You must divide all items of income, gain, loss, deduction, and credit attributable to the rental real estate business between you and your spouse in accordance with your respective interests in the venture. Although you and your spouse will not each file your own Schedule E as part of the QJV, each of you must report your interest as separate properties on line 1 of Schedule E. On lines 3 through 22 for each separate

2

property interest, you must enter your share of the applicable income, deduction, or loss.

If you have more than three rental real estate or royalty properties, complete and attach as many Schedules E as you need to list them. But fill in lines 23a through 26 on only one Schedule E. The figures on lines 23a through 26 on that Schedule E should be the combined totals for all properties reported on your Schedules E.

Once made, the election can be revoked only with the permission of the IRS. However, the election technically remains in effect only for as long as the spouses filing as a QJV continue to meet the requirements to be treated as a QJV. If the spouses fail to meet the QJV requirements for a year, a new election will be necessary for any future year in which the spouses meet the requirements to be treated as a QJV.

Rental real estate income is generally not included in net earnings from self-employment subject to self-employment tax and is generally subject to passive loss limitation rules. Electing QJV status does not alter the application of the self-employment tax or the passive loss limitation rules.

For more information on QJVs, go to IRS.gov/QJV .