I pulled a list of tax delinquent properties in my area.

Forst off, you DO need a broker if you are going to lend, otherwise, you are likely in violation of state usury laws and other potential Federal laws. 

Remember also that the interest on the loan is taxed at ordinary income rates.So for example lets say you have 100k and were making 8% in the markets - 8k per year and say you are in top bracket, you will pay $1600 in taxes per year or netting 6400.Now lets say you did a loan and were at 5% you are earning $5k per year (actually less because principal is being paid down and some of money goes into essentially a 0% checking account).

Even if you're still paying for some of the expenses out of pocket, you've most likely drastically reduced your cost of living by eliminating most of if not all of your mortgage, property taxes, and/or insurance.

I have a couple questions in regards to setting up the proper entity as well as taxes. 1.

If there is only a JV and not a new LLC formed, what forms are issued at the end of the tax year?

A couple years ago the IRS asked for her 1979 taxes and she didn’t have them to prove them.

Your primary residence you get to deduct the interest and taxes but not the insurance.

Should I create an LLC at this point to protect my personal assets and tax planning?

My payment (including escrow for insurance, taxes, etc) of $2500 would go to roughly $4500.