Partnership Tax Question

[Account Closed]

Hey all,

Quick partnership tax question. If we each hold deeds and mortgages in our own names (to increase our number of mortgages allowed), can we somehow share the mortgage interest tax deduction on a partnership tax return, even though the bank issues the interest to one person? 

[Percy N.]

Not a CPA but I would think this is not allowed unless it is your spouse and the entity will be pass through.

Ernie Neve, CPA will know.

[Brian Barfoot]

I'm interested to know what answer you get. I have a property bought in my name but then sold to a 50-50 LLC I'm a part of. I'll be checking with my CPA about this soon as well.

[Steven Hamilton II]

Originally posted by @Account Closed:

Hey all,

Quick partnership tax question. If we each hold deeds and mortgages in our own names (to increase our number of mortgages allowed), can we somehow share the mortgage interest tax deduction on a partnership tax return, even though the bank issues the interest to one person? 

 Yes, you would report the mortgage interest on  Form 8825 of the Form 1065.  You will then split the net income at the end based upon your stated allocations.

[Ernie Neve]

Hi Taylor B!  Happy to try to help on this issue.  Please clarify: So, you have multiple properties, each owned in only own, separate name?  Meaning, they are NOT deeded to multiple names or a partnership entity of some sort.  And, the respective mortgages are also in single names as well?  Is a partnership being contemplated for any other reason between the parties being referred?  There are some important technicalities here.

[Account Closed]

@Steven Hamilton II@Ernie Neve Thank you so much!The property only has 1 partner on the deed, and 1 on the mortgage to clarify, the form will obviously only be issued to him.I hope I can ask one more question. 

We also have 4 properties without a mortgage in 2015. 3 were bought in all 3 of our names, and 1 was purchased in our newly formed LLC. 2 of the 3 purchased in our own names was quitclaimed in november (working on the other one). We didn't plan properly,so during 2015 we basically have:

1) An LLC with 3 properties (1 was quit claimed that was owned by all 3 of us)

2) One partner has the sfh with the mortgage as discussed in the first question

3) 1 property is not in the LLC yet

Do I need 2 partnership returns even though the LLC and the partnership have the same members?