The mention of ED requires the empowered entity to take actions and justify the action.

Since LLCs are active, pass-through entities, your 401k would be liable for the tax on the company.

I am looking to learn by doing and just starting to consider the pros/cons of different legal entities.

You could form an entity for the partnership, then provide proof of funds for the entity and proof that you have the ability to act on behalf of the entity.

But, one trick, you could resell the property to an entity you control, the same day you buy it if you wish, for the same price (or anything less than 120%) and then the restriction is done, over, kaput.  

Hey Albert, It sounds like you'll need to form a legal entity (i.e., LLC), provide and execute an operating agreement, set up banking accounts, arrange insurance, etc.  

Whether owned personally or by a pass-through business entity, the rental income can not really be taxed at a lower rate than other primary income.

I have a good understanding of sub2 and owner financing, I realize that I have the property deeded to my entity in both situations.....

If they can get to one, they can get to all within the same entity.

Thank you.http://www.biggerpockets.com/forums/109-goals-business-plans-entities/topics/133447-real-estate-business---opportunity