Posted by Nancy Cason on March 31, 2000 at 07:04:23:
I use a family limited partnership to hold title to my rental properties. A family limited partnership is the same as a “regular” limited partnership except all partners are related by blood or however you wish to define family.
Bronchick has a good course on limited partnerships. Once you decide which entity you wish to use.
The beauty of a limited partnership is that if someone sues the partnership they can only get a charging order against the partnership. If your agreeement is written properly the general partner (me) determines when a distribution is made. If there was a charging order against you then you would just decide NOT to make any distributions and you money and property is safe.
For taxes you complete a separate tax return and also post the 1065 data to your 1040. The partnership does not create any special tax savings, your activities determine the tax savings or offsets. The Partnership just offers you the ability to hold title in a safer way than in you own name.
I created my own partnership agreement and filed it with the state. Call your state capital (corporations division) and they will send you the forms for setting up a corporation, limited liability company, or partnership and the associated cost.
Also read your state statutes on LLC and partnerships. That will help you better understand these entities and which one suits you best.
You do not need an entity set up first in order to begin investing. However, it is a good idea to begin learning about them as you make investments and then when you are more experienced you will be better able to determine which way you need to go.
HAVE FUN AND KEEP A POSITIVE MENTAL ATTITUDE