All Forum Posts by: Brian M Sweeney

@Joseph Shaggs is there a mortgage on the property? 

I agree with Ashish from above. The benefit you have is you are making a great W-2 income. The passive losses will stack up over time and you can use them against passive gains in the future. 

@Brandon Reda an s-corp is taxed the same way. Liability insurance should cover most of the situations you described. 

@Colby Mulry to do it the "right" way you are going to want to have another LLC with the appropriate ownership details. New bank account etc. This makes it much easier for accounting/tax planning purposes as well.

@Brandon Reda an LLC is a flow through entity which means the profit is taxed at your personal level, so that isnt going to change if a partner joins. The protection you receive is based on the liability you have with the property. That being said, im not sure what type of lawsuits you would personally be worried about?

@Colby Mulry this isn't that complicated of a situation. I would recommend starting a new LLC with the 50/50 ownership shown as well as the capital contributed. You will need to have a 1065 partnership return filed for the new LLC but this will help account for the 'tax savings' etc. for future use. Does your partner have passive gains that he is looking to offset? Or just general tax savings?

From a Tax & Accounting perspective it will help simplify things in the long run if properties are under different legal entities. In the short term it doesn’t matter as much and is primarily going to be based on the amount of risk you’re willing to take on. For larger multi family properties you are going to want to establish separate LLC’s.

Simply put. Don’t do it.

@Dave Foster this is also true. But not as fun as a conversation!

Fantastic episode!