Legal Structure to maximize depreciation

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Imagine 2 investors wish to buy 50-50 a large multifamily:

  1. Investor A is in the 39.6% marginal income tax bracket. 
  2. Investor B is in the 15% marginal income tax bracket.

Each dollar of depreciation is thus more valuable to Investor A than to Investor B. 

Is there a way to creatively structure this investment so that the two parties equitably maximize their tax savings and cashflow? 

Example: "A" gets all of the depreciation, and "B" gets a higher % of the cashflow.  (Possible) Result: each person gets a higher net cashflow from the property than they would under a conventional 50-50 split of depreciation and cashflow.

If depreciation is deducted against collected rents before partnership distributions are made, then the distribution ratio would only apply to the net income or net loss incurred.

If the net income is evenly split, the high bracket taxpayer will have less after tax income from the property than the lower income taxpayer.  I suppose there is a way to write the partnership agreement so that each partner received the same amount of after tax income from the property, but that would mean that the higher bracket taxpayer got more of the income than the lower bracket taxpayer. 

Look at it this way, $1000 before taxes is $600 after 40% taxes.  If in the 15% bracket, then you only need $706 income to net $600 after taxes.  Would the partner's agree to a 60/40 net income split to get parity in after tax income?  Would one agree to take less income than the other even though both contribute the same level of work to the partnership?

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