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Level 1
posted Oct 31, 2019 2:15:09 AM

Does a parent and son who enter into a partnership of a rental property and split their rental income 50% be subject to the rules of TOSI?

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1 Best answer
Level 11
Oct 31, 2019 2:15:10 AM

TOSI rules generally apply to income that is assigned to non-active partners. If both parties are active in the business, TOSI wouldn't apply.

There's an excellent "decision tree" for TOSI on the Moodys Gartner site that you might find helpful: https://www.moodysgartner.com/wp-content/uploads/Moodys_Gartner_Tax_Law_Income-Sprinking-Flowchart.pdf?v1

1 Replies
Level 11
Oct 31, 2019 2:15:10 AM

TOSI rules generally apply to income that is assigned to non-active partners. If both parties are active in the business, TOSI wouldn't apply.

There's an excellent "decision tree" for TOSI on the Moodys Gartner site that you might find helpful: https://www.moodysgartner.com/wp-content/uploads/Moodys_Gartner_Tax_Law_Income-Sprinking-Flowchart.pdf?v1