wife & I investing in property with her sister. one single LLC or two separate LLCs?

[Rick Figurasin]

Hi! 

My wife and I are investing in a property in Florida with her sister. Is it better to have a single LLC with the three of us or are two separate LLCs better (wife and I as one, sister as the other). We're not sure if there is a benefit from a legal/tax perspective.

How would that work in terms of reporting/paying for taxes?

Thanks!

[Jason Marino]

Hi Rick,

I will try to reply to your post on the legal side. You could use either option and have a similar result if everything is created the right way. A single LLC for all of you is going to need a more detailed Operating Agreement than if you each have your own LLCs, since there will be a 3rd party that is a part owner of the entity. You will need to address things like ownership, payment, responsibilites, dispute resolution, and resignation in a single document. The benefits of having a single LLC would be that you only have a single maintenance cost and a single registered agent, rather than having this cost 2 times (once for your LLC and once for your Sister-in-Law's LLC).
   

[Rick Figurasin]

That's a good point. I was worried about the costs of several different LLCs. We had always heard you should create a separate LLC for each property but it sounds like it would be a lot more work.