RSM424H1 Lecture 16: Chapter 16
11 Jun 2017
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Document Summary
Definition of joint venture: a joint venture is not the same thing as a corporation or partnership. Generally, it can be described as an association of two or more entities for a given limited purpose without the usual powers and responsibilities of a partnership : limited purpose distinguishes a joint venture from a partnership. This term reflects the fact that there are many participants in the specific project. Tax treatment of joint ventures: a joint venture is to itself subject to tax. Instead, each member of the joint venture includes its share of the venture"s revenues and expenses as part of its own taxable income or loss. The joint venture simply funnels its profits or losses directly to its separate members: there are some distinguishing features for the tax treatment of joint ventures and partnerships. One major difference relates to the method of calculating the income or loss that is allocated for tax purposes.
