Does anyone have experience opening a US Limited Partnership to own US Rentals?

Question

Hi Everyone,

I have read all the articles regarding the double tax issues of owning a US Rental Property in a US LLC or C Corp. My research shows that the optimal tax strategy for a Canadians to hold US Rental properties is a US Limited Partnership with a US LLC or C Corp acting as the General Partner with a 1% interest in the Limited Partnership.

Does anyone have first hand experience opening/purchasing properties in a US Limited Partnership? If so, can you please provide you experience and helpful tips.

I have lots of questions. Was a cross-border accountant able to set everything up? Did US Banks allow you to open a US Bank account with the Limited Partnership? Which entity is on title for the properties, is it the name of the Limited Partnership, or the General Partner? Etc.

Any comments from people who have done this would be greatly appreciated.

Thank you!

Alex Roque · Answer

Yes, I agree a lawyer should set up any entities.

The properties will be owned 100% by me. The worry regarding holding the properties in your personal name is the legal liability. If I were to set up the Limited Partnership with a US General Partner, it helps reduce personal assets being at risk from any legal issues.

I would maintain separate bank accounts and will not mix personal/business activities to ensure that the entities operate solely as a business. This will just help with any unfortunate situations of legal issues with tenants.

My questions from this topic relate to the following, can a "Limited Partnership" be named as the owner on a property deed. Does anyone have experience opening a US Bank Account for a Limited Partnership, when the partners are Canadian?

I know what corporate structure I am looking to set up, just want to hear from anyone who has done this and has it set up already.

Basit Siddiqi · Answer

You don't want an accountant setting up entities for you. That is something an attorney should be doing for you.

Maybe some sort of firm that has both an accountant and attorney within the same firm.

If you have an entity, you want the entity to own the properties.

Is it just you or are there other people invovled?
If it is just you, why not buy the US property directly in your own name?

Does anyone have experience opening a US Limited Partnership to own US Rentals?

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