Trading LLC Equity with partners in multiple ventures

[Evan Haag]

Hi All!

I have a few investment properties in separate LLCs with the same partner.

Question Up Front:

Is it possible to exchange shares or stake in our LLCs to each other?

For example, we both own 50/50 in entity A and B, but want to go 100/0 and 0/100 in each entity.

I’m trying to find a way to transition from my W2 job to full time real estate investments, and finding that income from the partnership (or lack there of) is playing a role.

This may be my lack of tax knowledge, but As I understand taking out money from a partnership can lower your basis in the property (or the entity), therefore not being a great long term strategy.

Whereas if you have full ownership of the property, you can take that income and have it taxed at your normal income rate.

Any advice out there on this situation?

Thanks!