LLC for family-owned, member-occupied property: Issue Flagging

[John Wolf]

My brother and I have decided to invest in an apartment. We think an LLC may be the best means to consummate our project. We will each contribute capital to the LLC for the down payment (likely, we will pay down 40% of the purchase price). I will live in the apartment for some time as tenant. At some time in the future, we will rent or sell the apartment.

I am struggling with a few issues in this scheme. I see the problem of related-party transactions but believe we can agree to a fair market value for the rent. And I imagine there are a host of accounting and tax issues I will need to research before we begin. Can anyone spot other issues I should consider? Can someone suggest a better structure for our project?