Joint Venture Joint Venture - contractual business undertaking between two or more parties, organized or established only for

some transient or temporary business objective General Rule: Joint venture is treated as a corporation (taxable as a corporation) Exception: Joint Venture exempt from income tax: a. Joint venture for the purpose of undertaking construction projects b. Joint venture for engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the Government Joint Venture Taxable as a Corporation Those other than (a) and (b) Members of joint venture are treated as if stockholders

Status of Joint Share of a party in the net Venture income of the venture Tax-exempt Gross income to such party Taxable as a Dividend income to such party corporation with final tax Note: Dividend from domestic corporation (intercompany dividend) is exempt from income tax Co-ownership Co-ownership - occurs whenever the ownership of an undivided thing or right belongs to different persons Activities of the coowners Limited to the preservation of the property and collection of income therefrom Invest income in any income producing properties or invest additional income Tax imposition Co-ownership : taxexempt Co-owners: taxed individually on their share of income Co-ownership: taxable as a corporation Co-owners: constitute themselves into a partnership