Should he simply sell me the property for 20K or should we do some type of partnership structure to lessen the tax burden? 

A partnership?

We created a 50/50 partnership LLC to do this.

If I establish a new LLC primarily as a real estate entity (partnership pass through for taxes purposes) can I use LLC contributed capital to buy stocks and offset some of the LLCs real estate tax losses before transferring the LLC net income to our personal tax return?

I've explored a few potential partnerships with members of BP, and that shared passion for real estate that draws us all here is an amazing momentum builder in and of itself.

@Shashank Gadda if you are looking for the partner to provide the down payment and get the loan in their name to purchase the rental, what are you bringing to the partnership?

I'd like to offer helps re JVs, partnerships with friends.   

This was the first purchase as a partnership, and still pretty early in my investing career.

If one of you is making more than fica Base salary, then there might be some tax planning opportunities. 2) If both of you are a member then the entity will have to file a partnership return.

If your girlfriend wants to go into partnership with you, that might work, but it is a big risk-what if your relationship ends?