Forming a partnership by selling part of the equity in my home

[Josh Matteson]

Hello BP Community, I need some guidance. 

I recently came on here and asked the age-old sell or rent out my current home on a low-interest rate question. Based on the responses, I took out a HELOC and we put a down payment on a different home. We have decided to rent out our current home, but with a twist.

Some friends of ours offered to buy some of the equity in our home and go into business together. The concept sounded great, as we could cash out some of the equity and split the costs of the rental 50/50. Now we are just trying to figure out how it would all work. Here are a couple of options that I have thought of, but I don't know all of the implications of each. The goal is to obviously keep my current mortgage with the low rate and figure out a way to fairly split the equity in the home. 

- Move the property to an LLC that we have co-ownership of. I spoke with our mortgage company and they said that some loans can be moved, but the ownership of the LLC has to be at least 51/49%

- Some type of co-ownership agreement that gives them ownership of the equity when it sells?

I have just over $100K equity in the house. The idea is that they will purchase a % of that equity based on the appraisal of the home, then we will split the costs/cash flow based on that % ownership. Our mortgage is around $1400 and we already have interested renters at $2550. 

1) Are there any options other than the 2 I mentioned above?

2) What are the tax implications for me on the gain? The idea is that we will use that to just pay off the heloc we used for the next house. 

Thank you!