All Forum Posts by: Andy J.

Hi

Me & my partners created a multi-member LLC (lets called it LLC-X) taxed as partnership to invest in a multi family commercial prop via a syndication. We all have equal shares. The multi family unit itself is held under a parent LLC (lets call it LLC-Y). We're told that LLC-Y will be issuing a schedule K-1 for LLC-X for tax purposes.

I'm trying to understand what would be the tax framework in this situation. 

1) Would we first have to file Form 1065/Schedule K-1 of our own for LLC-X with the IRS by March 15? Or can we just re-use the Schedule K-1 issued by LLC-Y instead.

2) Then at tax time we'd file business returns using Schedule E for LLC-X based on the Schedule K-1 from #1

3) And then include details of the same on our personal tax returns

Did I get that right? I've tried to discuss this with a local CPA, but couldn't really get the process articulated well

Thanks @Alik Levin. Yes @Brandon Hall & @Ashish Acharya have been great with their advice on such topics! Looking for some pointers on how the treatment is changing for HELOCs in such cases with the new tax law. Any inputs much appreciated!

I'm looking to use HELOC on my existing primary (which I plan to convert to a rental) to fund the down payment on what will become my new primary residence. Would the interest on the HELOC be tax deductible? If yes, what would be the limits here - 100k? Also, would this go as a line item deduction on my soon-to-be rentals schedule E as a business expense or get attached my itemized deductions on my new primary instead? Trying to see how I make this still work in my favor by being able to deduct the interest

Thanks in advance for your response.

Cheers!

AJ

Hi @Brandon Hall

Great post on the topic and thanks for taking the initiative to start this thread. I'm in the process of buying a new home that'll be my new primary residence and looking to convert my current house into a rental. A few questions on how the new tax law will have an impact this situation 

1) Per your #1, will mortgage interest on both my new primary residence and my current primary which will be converted to rental, will each have their own 750k acquisition debt limit that's deductible. Is that accurate? The 3rd example in this thread - https://www.irs.gov/newsroom/interest-on-home-equi..., was throwing me off, but they mention vacation home and not a rental so couldn't tell if they're treated differently

2) Will property taxes for my rental and primary residence each be deductible upto 10k, or is that an aggregate limit. Your #3 makes me think, its latter, but wasn't sure if rentals were treated differently than secondary residences

3) I'm looking to use HELOC on my existing home (which will be converted to a rental) to fund the down payment on my new primary residence. In your understanding, can I deduct the interest on my HELOC? If so, what are the new limits on that? Your #2 says you can use HELOC to buy rentals, except in my case its the reverse - using HELOC on a would be rental to buy my new primary. Trying to see how I make this still work in my favor by being able to deduct the interest

Thanks in advance for your response.

Cheers!

AJ

@Paresh Patel - Thanks for taking the initiative & research on this tricky topic. Our tax system is complex and its helpful for us regular people to understand if such an avenue exists. A lot of the resources you've pulled together don't rule it out entirely. I'll discuss this with my tax advisor and see if he's got any perspective on this