Sharing tax benefits with a partner/investor

[David Zimmer]

A friend and co-investor are currently under contract on a beach home that will be strictly for investment. He is a home builder and his wife is a designer, and I've got experience in managing STRs - so it's a great fit. We plan to do a cost seg and bonus depreciate the house the first year, but we are not planning to start a legal entity like an LLC yet. I'm curious what sort of details we should enter in our operating agreement in terms of how to split the benefits of the bonus depreciation. His income could potentially be much higher than mine, so he may be able to write off more income than I could. Could we simply make a written agreement to split the amount of tax savings once taxes are filed and returns are received? Any recommendations on this?

[John Underwood]

Quote from @David Zimmer:

A friend and co-investor are currently under contract on a beach home that will be strictly for investment. He is a home builder and his wife is a designer, and I've got experience in managing STRs - so it's a great fit. We plan to do a cost seg and bonus depreciate the house the first year, but we are not planning to start a legal entity like an LLC yet. I'm curious what sort of details we should enter in our operating agreement in terms of how to split the benefits of the bonus depreciation. His income could potentially be much higher than mine, so he may be able to write off more income than I could. Could we simply make a written agreement to split the amount of tax savings once taxes are filed and returns are received? Any recommendations on this?

 I would definitely talk to a CPA on this. 

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