I would like to expand on the several posts which have addressed the topic of buying properties as an individual and then “moving” them into an LLC…etc.
I just purchased a house in my name (and as the sole borrower). I actually have a partner and we have a general partnership. The GP has a credit card and a line of credit that we are using to fund the rehab and he is doing the lion’s share of the actual rehab work (which we have agreed will offset my risk on the mortgage). I also withdrew the down payment cash from the GP bank account of which he funded 65%. The GP will also be making the mortgage payments
I have read the posts advising to deed to the GP (or a new LLC). Apart from the DOSC issues (which still worries me), what about the tax implications? Since the GP is paying the rehab expenses directly that part is easy, but since the 1098 from the lender will be in my name, not the partnerships, how do I “move” the interest expense to the partnership? Should the accounting reflect a “sale” of the property to the GP from me at an amount that nets me zero after satisfying the “loan” the GP made me for the down payment?
Thanks for any insights