Partnering on a flip

[Hyung Lee]

Hello,

New to the group but learning a ton and interested in feedback from others especially tax professionals. I'm considering partnering on a flip in Southern California. I have a regular 9 to 5 but know someone in real estate who I'm probably going to partner with. We will both make a relatively equal cash investment and split the profits equally. I will be taking on the loan in my name and they will be owning the rehab portion of the project.

My question is, what is the best way to structure this? Should we form a Limited Partnership, doing a land trust into the LP and issue K1's at the time of sale? My understanding is that is the best way then we only pay the capital gains tax. I have gotten some odd advice on setting up this structure up so was hoping to hear what others have experienced. Thanks in advance!