Investor · Leominster, MA · Member since 2013 · 54 posts · 5 votes
I've purchased an investment property with a partner. We are on the deed as tenants in common and will split income, expenses and tax benefits 50/50. When we tried to setup a bank account with the property management company (maintenance & rent deposit), we were told we'd need to have a business (DBA, LLC etc) in order to go onto the bank account with the PM company since they are a business and cant go onto a personal account. Any recommendations to get around this issue? Since my partner and I are on the deed and are operating currently as sole proprietors, I don't think it makes sense to "form a business" with a separate tax id number just to open a bank account with the PM company. There is also likely tax issues there as well. Any help is appreciated!
I've purchased an investment property with a partner. We are on the deed as tenants in common and will split income, expenses and tax benefits 50/50. When we tried to setup a bank account with the property management company (maintenance & rent deposit), we were told we'd need to have a business (DBA, LLC etc) in order to go onto the bank account with the PM company since they are a business and cant go onto a personal account. Any recommendations to get around this issue? Since my partner and I are on the deed and are operating currently as sole proprietors, I don't think it makes sense to "form a business" with a separate tax id number just to open a bank account with the PM company. There is also likely tax issues there as well. Any help is appreciated!
There is no getting around needing a Federal EIN to open a bank account for business purposes with a commercial bank. So go online and get one at irs.gov.
Also a sole proprietorship is ONE person. You mentioned that you have a partner. Therefore you will not be able to get a FEIN as a sole prop. Either be an LLC (taxed as a ptrshp or corp) or a S-Corp. You might need to get registered with the state as well depending on the bank whether you have the option of doing it after you open the account or before.