Partnership Mortgage Interest Deduction

[Donald Brinkley]

I'm considering investing in a short-term rental with my sister. I currently have 4 mortgages in my name. In order to avoid any lending issues with a 5th mortgage, my sister is considering getting the mortgage in her name. We would each bring half the cash to close and I would manage the rental. This is my attempt at partnering in a deal. I'm unclear how the mortgage interest would be handled in the partnership and was looking for advice. Clearly it is still a business expense, but does it matter that the mortgage will be in her name? Is there an impact if the arrangement is a partnership vs an LLC? If there are issues is there any sort of way to avoid these issues in a deal like this?

Thanks!

Don

[Eamonn McElroy]

@Jon Rusnak

A 1099-INT is issued to report interest income, not mortgage interest paid...