What is the best way to invest in real estate (rental property) in the U.S. with a partner as a Canadian? Considering tax laws, liability, cash flow, best type of structure (LLC, LP, etc.).
The best way to invest in the US, where you are a Canadian and your partner is an American, is by forming a US Limited Partnership (US LP). The US LP will purchase the property. You and your partner will be ‘limited partners’ collectively owning 99% of the partnership. There will be one General Partner, a newly created LLC. The LLC will own 1% of the partnership and bear all liability from lawsuits. The LLC should be solely owned by the American.
In this manner, none of you will be double taxed and both of you will be shielded from liability of the partnership.