What can I do to make myself qualified?
In addition, I am confused about this paragraph I read on the IRS site: "Although you and your spouse will not each file your own Schedule E as part of the qualified joint venture, each of you must report your interest as separate properties on line 1 of Schedule E. On lines 3 through 22 for each separate property interest, you must enter your share of the applicable income, deduction, or loss."
Would you please explain to me how "Each of you must report your interest as separate properties on line 1 of Schedule E"? We both own the same properties. How can we divide them?
Thank you so much for your help!
If I understand correctly, your primary concern is contributing to Social Security so you have enough Social Security credits. Your research makes you believe that if you elect a qualified joint venture, this somehow creates creditable self-employment income. Generally, in order to contribute to Social Security, you have to have "earned income." Earned income is income from employment or self-employment, not rents.
A rental trade or business, as you refer to it, is a hotel or car rental agency. These activities provide significant services as compared to a long-term rental of a condo or home. These activities require material participation, produce self-employment income and would be reported on Schedule C. If you rented 25-30 units or more, you might be able to create a trade or business, but the income would still be rental income. Even if you check the box on Schedule E to be treated as a qualified joint venture, the net income from the rental activity is not creditable for Social Security purposes.
If you need credits to qualify for Social Security, then you'll need to find work. If your concern is that you just want to contribute more so you can get back more, you're probably better off investing your money elsewhere. One of the principal disadvantages of "investing" in Social Security is that you have to be alive to receive the benefits. This isn't true with other investment alternatives.
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