RE Rental Property w/ sibling

[Dean]

I have a client (MFJ) who would like to a purchase a co-op as a investment rental property, but due to the husband's previous marriage he does not want his name on the title. As it was describe to me by the husband, the wife will be purchasing the co-op but for some unknown reason the co-op board wanted the co-op to be purchased in a joint ownership (????). Since the husband doesn't want to be on the title, his wife is considering placing her brother and herself on the title as joint owners. Her brother is o.k. with this arrangement except for one concern; he does not want anything to do with reporting of any rental activity on his tax return and that sister would be reporting 100% of all income, gains or losses. My questions to the forum are the following: Can only one joint owner of a rental property report 100% of the rental activity on the tax return if this was agreed by all joint owners? Has anyone encountered a similar situation and would be able to give me a citation? Any suggestions? (i.e. have the wife's name and SSN as the primary owner on all documents, etc.) TIA

Dean

[taxea]

I suggest that she go back to the entity that wants her husband included and have them explain why he needs to be included if she is making an independent purchase with the deed and mortgage in her name only and for which she will be taking full responsibility.

[TAXNJ]

You address the tax issues and an attorney addresses the legal issues.

[Burke]

I would think the co-op is insisting on joint ownership with the husband; I doubt if a brother would meet the requirements. Perhaps you are in a community property state? Are they involved with the financing? But the advice given is the next step. Get a clarification on why this is being required. I have sisters who are joint owners of rental property, and they wanted one to take everything, but legally 50% is owned by each, so both get a 50% split on the tax returns, whether they like it or not. This is 50% property because they inherited it equally, but there is no law that says ownership has to be 50/50.