An unincorporated organization with two or more members is generally classified as a partnership for federal tax purposes if its members carry on a trade, business, financial operation, or venture and divide its profits. However, a joint undertaking merely to share expenses is not a partnership. For example, co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants.

• Partners can be individuals, corporations, trusts, estates, and other partnerships.
• Each partner contributes money, property, labor or skill, and expects to share in the profits and losses of the business.
• A partnership does not pay tax on its income, but "passes through" any profits or losses to its partners. Partners must include partnership items on their tax returns.
• Two common forms of partnerships are general partnership and limited partnership.