Florida resident investing in Ohio

2 Replies

1. Brother has real estate flip operations in Ohio. 2. I live in Florida and would like to participate in his flip operations as a co-investor on a deal by deal basis. 3. What is the best structure for investment dollars to flow from Florida to Ohio and gains to flow from Ohio to Florida. 4. What is the tax filing requirements for Ohio. 5. What is the tax filing requirements for FL For 4 and 5 I suspect Ohio will need a non residency filing and the income will be taxed at the state level in Ohio. For FL there is no state taxes but the income will be taxed again on my personal 1040 through the Ohio entity k1 to me... Florida may see that as foreign income earned outside of Florida. I hope that doesn’t trigger withholding on that outside income to Florida.. Let me know your thoughts on this if you have experience with these types of transactions. I appreciate your time on reading my post... Lloyd

@Lloyd Winston

You and your brother may need to look to speaking with an attorney to draft up a partnership agreement/LLC operating agreement. This document will entail information such as how income/losses will be split, who will manage the partnership etc.

The partnership will be required to file a federal form 1065 and possibly an Ohio 1140.
The partnership will be required to distribute a K-1 to each partner which details each partner's share of income/losses. 

The Partner's will then be required to report the K-1 items on their return.

A Florida resident will be required to file a non-resident return with Ohio. Since Florida does not have a state income tax - you will not get a credit for taxes paid to another state.

@Lloyd Winston

I would look at loaning him the money (mortgage) as it sounds like you are not going to be in Ohio working. No operating agreements, etc, It would be less liability and I don’t think you would have to pay Ohio state tax. 

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