You will have to pay higher personal income tax rate, versus waitingtill after one year for lower Capital gain tax rates.

It is tax free in the sense that you will not owe taxes today on the cash-out.

And you now have to file three tax returns:- partnership tax return- your individual tax return reporting 1/2 of the partnership losses- your partner's individual tax return reporting their 1/2 of the partnership lossesAnd while partnership return can be DIY-ed, it probably should not be.

Maybe that is why the old owner didn't pay their taxes?

We've been able to rent properties pretty quickly, just as long as the rental rate is appropriate!

If I leave this amount in Sch-E, I get taxed at ordinary income tax rate at Federal and State level, which along with my regular W2 income can be substantial.

@Anita Z.I recommend finding an accountant who specializes in real estate taxation, tax planning and financial planning.

If you live in CA, and your LLC is in OR, you still need to register it in CA and pay the 800 dollar per year LLC tax.

Hi All, any input on renovating a house and possible tax exemptions under an LLC?

They are so tax beneficial!