I have clients (not spouses) that are 50/50 partners in a business. However, each have some individual income and expenses related to the business. The expenses are included in Part 6 of the T2125. In other tax apps the individual's income would be entered in Part 5 of the T2125. Am I able to do that in Profile (without an override)? What's the best approach, do the override or complete each client's T2125 ignoring the partnership?
The main issue I'm having is with the additional income. The partnership splits income and expenses 50/50 on their core service. That's easy to prepare. However, on a supplementary service they split the income only 75/25. In other tax apps a partner's own income from the business that is not part of the 50/50 split is included in Part 5 of the T2125. Is there a way to do that in Profile without overriding an amount in Part 5? How do other tax professionals using Profile deal with this situation?
You don't need to do either, meaning the over-ride or preparing separate T2125s. Parts 5 & 6 of the T2125 are integrated by Profile. You would record the individual expenses in Part 6 on the appropriate lines. The program carries the totals from Part 6 to line 9943 in Part 5.
You will most likely be prevented from efiling either of these tax returns as having an individual expense applied to partnership income is one of the exclusions under the efile system.
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How do you include partner income on T2125?
I have clients (not spouses) that are 50/50 partners in a business. However, each have some individual income and expenses related to the business. The expenses are included in Part 6 of the T2125. In other tax apps the individual's income would be entered in Part 5 of the T2125. Am I able to do that in Profile (without an override)? What's the best approach, do the override or complete each client's T2125 ignoring the partnership?
Why do you want to report this?
The main issue I'm having is with the additional income. The partnership splits income and expenses 50/50 on their core service. That's easy to prepare. However, on a supplementary service they split the income only 75/25. In other tax apps a partner's own income from the business that is not part of the 50/50 split is included in Part 5 of the T2125. Is there a way to do that in Profile without overriding an amount in Part 5? How do other tax professionals using Profile deal with this situation?
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ProFile, Canada
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You don't need to do either, meaning the over-ride or preparing separate T2125s. Parts 5 & 6 of the T2125 are integrated by Profile. You would record the individual expenses in Part 6 on the appropriate lines. The program carries the totals from Part 6 to line 9943 in Part 5.
You will most likely be prevented from efiling either of these tax returns as having an individual expense applied to partnership income is one of the exclusions under the efile system.
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