Partnership Recording Venture

[Gretel]

Here is the story: 2 music people join to have the recordings registered in the hopes of future revenue. EIN was needed for this registration, so one of the guys did just that. Guess what: IRS is looking for 1065. They paid about $100, which needs to be capitalized anyway until they indeed have revenue.

1. Just file the 1065 with zero and written: no business activity on it?

2. Send coupon from EIN confirmation letter and ask them to treat this application as "banking purpose/local law" only? Once they have income start filing tax returns.

[Gary2]

Here is the story: 2 music people join to have the recordings registered in the hopes of future revenue. EIN was needed for this registration, so one of the guys did just that.

What exactly did they join? With whom did they register what recordings?

[Gretel]

What exactly did they join? With whom did they register what recordings?

They joined each other (sorry for this confusion). The company they registered with is a publisher for sound recordings. The 2 guys are the artists.

[Bees Knees]

Well, it is a partnership. If their recordings ever result in income, they will need to file Form 1065 to split up the income and expenses. What you have is a business that is still in its start-up period, or at best, a business that produced inventory that is still on hand.

I would file a 1065 each year with zeros on it with no explanation.

[Gretel]

Thanks, Bees. That is the cleanest way to do it. I was hoping to find some justification of waiting until they have income - if they ever will.