Starting LLC question
Hey everyone! I bought a duplex in my name only back in 2019 and owner occupied it until this dec. I just bought another property and the duplex is now completely occupied by tenants. So now I am looking to set up an LLC for the property with my brother (who's not on the mortgage). My brother actually gifted the initial funds to buy the duplex and when it was bought he did not have a w-2 job to go onto the mortgage. My CPA says that we cannot do this (set up LLC partnership) without him being on the mortgage. Does anyone have any experience with this? Thanks in advance for any insight
@Jonathan DeBough
I have never heard of that. I would ask another cpa
Quote from @Jonathan DeBough:
I recommend you set up a partnership agreement. Mixing family/friends and money can end badly, costing you money and the relationship. It's best to have an agreement in writing to avoid costly misunderstandings. That partnership can be in an LLC, then you transfer the deed to the LLC.
I do not see this being an issue at all. Setting up a LLC with both of you as members is a great idea though.
I know he's your brother. But there is a lot of risk in giving him 50% ownership of the asset with none of the liability.
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Real Estate Agent
- Bloom Real Estate Services
- http://www.gritpropertiesok.com
I would recommend looking into an anonymous LLC, which is basically an LLC plus an Agent Trust. With this setup you would be able to split the ownership on the trust level while keeping the information on the trustees and beneficiaries (managers and members) anonymous. Because the Agent Trust is the sole member of the LLC, this entity can still be treated as disregarded for tax purposes.
Does the LLC own the property?
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CPA
- Basit Siddiqi CPA, PLLC
- 917-280-8544
- http://www.basitsiddiqi.com
- [email protected]
@Jonathan DeBough:
Speak with the bank and have them tell you their requirement. If you wanted to have the mortgage or property in your personal names, you would not be incorporating.