http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#comments Comments from 'LLC or LP? Which Entity is Best to Protect my Rentals? ' in Asset Protection Techniques at BiggerPockets.com http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_598 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_598 Great post, Greg! The debate about what business entity is always an ongoing one here on BP. It is nice to get the perspective from an attorney on LLC vs. LP for rental property protection. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_599 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_599 Thank you for providing an excellent summary of the LP vs LLC issue. Just a footnote: The C-Corp is even less desirable than either of these two choices because of the likelihood of double taxation when you dispose of the property. The corporation, as the owner, will be liable for tax on the gain; but you the investor (aka stockholder) will want to dissolve the corp and take out the cash -- and that is typically a second taxable event. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_600 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_600 Thank you for sharing this great information! http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_602 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_602 Great info...I always used LLCs...now I'm glad I did. Thanks again! http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_603 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_603 Thank you for the great feedback. I'll post again before the end of the week covering the only time we should own property in a corporation. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_1276 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_1276 This speaks of LLC vs LP for rental property http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_4786 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_4786 what you recomend if i have a auto repair business its still the LLC good for me ? thanks http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_4798 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_4798 Very good post. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9647 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9647 Learned not to use LP. Excellent. That's what I love about this board ... you learn something whether you were looking for it or not. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9649 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9649 Thanks for the advice. Something to think about http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9655 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9655 Thanks for the advice,but being a NOOB how do I know when I'm ready to start a LLC??? http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9656 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9656 Thanks for that advice,but being a NOOB how do I know when I'm ready to create a LLC??? http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9818 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9818 I like LP because you can be both the general partner and limited partner at the sametime? As a general partner you can show ownership of 1% and limited of 99%. If sued, who in their right mind go for 1% of the assets.Limited can't be sued. LP is better in my opinion. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9899 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_9899 I would have suggested placing the title to all properties individually in the title of a trust, thereby never allowing the beneficial interest of the holding to be disclosed. Especially when you have a stable of properties. Forming a llc per property and only for that purpose always leaves a question of establishing an llc for protection vs business, unlikely to be pirced, but possible. The trust tax is higher, but provides privacy and protection. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_10405 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_10405 Where is it in the tax code that a limited partner of a LP cannot "capture depreciation on a annual basis"? What does "participating in the operation of the business" have to do with it? Depreciation is mandatory as I understand it. If it is mandatory but a limited partner can't take it, how is this reconciled? Here are two articles that contradict what you have said here: http://thismatter.com/money/funds/dpp/limited-partnership-taxation.htm http://smallbusiness.chron.com/tax-treatment-depreciation-limited-partnerships-21877.html The following link to the IRS website makes no mention of this limitation: http://www.irs.gov/publications/p541/ar02.html A source for this information would be great. Thank you. http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_10408 http://www.biggerpockets.com/blogs/261/blog_posts/709-llc-or-lp-which-entity-is-best-to-protect-my-rentals-#c_10408 Great post! Thanks for sharing.