My mother and I just purchased a foreclosure house 50/50. My sister is going to rent it from us as she settles into this new city for 1-2 years, at which point we hope to sell for a little profit. Normally I hold long term, but taxes are high here. We're not concerned about liability, the main reason I've used LLCs in the past for other rentals, so we plan on keeping this one as simple as possible.
My mother's accountant told her to consider a partnership. Is this really necessary for a short-term flip between family members who will never have any disagreements? Not much money is involved either, $40k each.
Does forming an entity make taxes any easier. My thought is that we'll open a separate personal checking account for all funds related to this house. We'll each receive 50% of rent, and pay 50% of repairs/expenses. Thoughts?
Thanks in advance.
