LLCs for a partnership

[Charlie Kimberly]

I'm about to close on a SFR deal that will be my first partnership. We're planning to quitclaim the deed to an LLC, should we share 1 LLC, or each have separate & put two on title?

Thank you, CK

[Ashish Acharya]

Originally posted by @Charlie Kimberly:

I'm about to close on a SFR deal that will be my first partnership. We're planning to quitclaim the deed to an LLC, should we share 1 LLC, or each have separate & put two on title?

Thank you, CK

Form tax prospective, either way is fine. You have obligation to file just one partnership return either way. 

If you want to keep it clean and do more deals. Having your holding SMLLC start doing the deals would allow you to get into more deals with just one LLC at your individual level.

The LLC would enter into deals as a JV, joint venture, with other investors directly or with their LLCs. The JV is regarded entity which will file a partnership return. You will pick up income at the individual level as your holding SMLLC doesn't file tax return.

Creating LLC for each deal at the property. level is strictly dependent on your/investors liability exposure and doesn't change your tax. But some states might have LLC fees so be careful before establishing multiple entities