Looking for advice on Best structure for Canadian real estate investor buying US properties

3 Replies

What is the best structure to own American rental properties for a Canadian citizen & resident. I am planning to go for Limited partnership. Is it possible to have a level below Limited partnership to know different set of properties. E.g. if my total liability risk ability is $X, I would like to have my invested capital into four such parts below the limited partnership.How do other investor go about this?

The cost of creating and tax returns for a partnership seem very high. and I would like to limit this to one

@Sandeep Dhall

You should really speak with a cross border legal/tax specialist to determine your best course of action. But from advice I've seen given by different experts, using a limited partnership in some form is a common structure. Under each, you can set up LLC's to hold property, whereby the income/losses flow up through the partnership and into your hands as personal. You would likely avoid FIRPTA with this approach.

This is not legal or accounting advice.

I agree with @Chad Urbshott but for one even more slightly important reason... it's actually bad if, as a Canadian, you set up an LLC. I can't remember what structure/entity you guys need, but an LLC will screw you on taxes (only Canadians, for some reason). There is another one that you should do (starts with an L also...maybe 4 letters...?) I just can't remember the name. But find that out from a specialist, and pay every bit you need to in order to make sure everything is for real lined up correctly because if it's not, you will end up paying a fortune later!

Thanks a lot for your answers! I will get in touch with cross border tax experts

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