taxless
Level 2

i agree they should just be deductible Sched A deductions for mortgage interest and taxes, an LLC does not make you a business, so the expenses they are deducting through partnership are really passive, and should merely be incorporated into the basis of the property , when and if the property is sold, these expenses will adjust the basis, and they can recover some of these costs as fixing up expenses at time of sale. Dissolve the LLC, and just split it 3 ways on your individual tax returns, less paperwork, less headaches and probably a more accurate way to capture the vacation home expenses, if this turns into a Rental/Vacation Home, then the Partnership makes a little more sense.

0 Cheers