Legal Question in Real Estate Law in New Jersey

Re: Business structure

From your question, it sounds as if you want to form an LLC for only your interest in the property. That would be problematic, given the other co-owners. It also depends on what form of ownership you have under the deed.

Anytime that you are considering an action for tax purposes, you really should consult a tax lawyer or an accountant with experience in the specific area of real estate investing [accountants may have different experience or specialties].

If this is not an investment property, I'm not sure about any tax planning, since I do not advise clients about tax issues.

However, you and your co-owners should have an agreement that states clearly:

- your respective percentages of ownership,

- how value in the property is attributed to each person,

- each person's responsibility for a share of the costs of maintenance, other expenses, and property taxes and insurance

- how all of you will deal with the co-owner who is not carrying out her/his responsibilities

- how one of the co-owners may be "bought out" by the others,

- how proceeds of a sale will be divided.

In addition to getting tax advice, you should consult with a lawyer to advise and help with a co-owner agreement. There will be a cost, of course, but failing to have such an agreement will lead to much higher costs if you don't have it and later disagreements arise.