STR structure and insurance

[Paige Harrison]

I am looking for some advice on how to best structure this STR agreement.

My friend and I would like to purchase a vacation home, and it is already a successful STR so we would like to keep that up to offset the expenses. We are both busy professionals and don't have time to materially participate, so are not looking to do the STR loophole. That being said, I am trying to figure out the best structure for asset protection and tax filings.

1. My CPA said that if we do a partnership LLC, it would cost 1,200/year to file a partnership return, not prohibitive, just another cost. In that case we would be an LLC, and we would be restricted to commercial insurance coverage, which is not a bad thing, probably more expensive, I imagine.

2. We use our personal names via a TIC, and then go 50/50 for schedule E's for filing. I don't know that that looks like in terms of insurance, I do know that if we dont use and LLC we could use Umbrella, but I am not sure what that looks like if both of our names are on the deed. Could we both get 5 million in umbrella?

Planning to get second home mortgage for financing. 

Let me know thoughts!