US Residents investing in Canada - Form LLC or Partnership?

[Sam Schrimsher]

Hello BP,

Wanting to get some opinions here from folks in the know.

My brother and I are in contract on some acreage in Nova Scotia Canada. After we purchase it we plan on selling some individual lots, perhaps developing a few homes to sell. And may have a couple long term rentals on property (less likely). He has dual citizenship. I have just US citizenship but could easily obtain dual citizenship as well. We're considering setting up the corporation in the states if we go that route.

My brother doesn't want to complicate his taxes and take on the additional associated expenses so he just wants to put it in our names as a partnership rather than an LLC. My thought was that we should form an LLC. He said that our liability insurance policy would protect us and he doesn't see any tax advantages. He currently has a 1m liability policy on his other properties.

Anybody know which would be better tax wise for both rental income and future capital gains?  I know the Corporate tax rate is quite low now with the new Trump tax laws.

Are we fine with just the liability policy or do we need more protection? I'd think if we develop any homes we'd want the additional protection of the LLC. Any thoughts on that?

I guess there's just a lot we don't know. This is our first land deal. Then it's further complicated by it being a cross boarder deal.

We might do this just one deal, or maybe more in the future. My thought was set up this specific LLC for this and any potential future deals. But if it's just this one deal, does that make it better to just go with a partnership so that we don't take on additional complication and expense for just one deal?

Thanks in advance, Sam