This depends on where they live.

In this article, we’ll cover all jurisdictions, but we’ll start in Ohio because what happens in Ohio is what happens in 80 percent of the jurisdictions.

The Beginning: A Two-Member LLC

A husband and wife who live in Ohio form a two-member limited liability company (LLC) and have it purchase a residential rental property in its name. Using an LLC provides the couple with a measure of limited liability. But does it also force them to file an expensive partnership return?

Unincorporated businesses with two or more owners are ordinarily taxed as partnerships.1 This means that a husband-and-wife-owned LLC is taxed as a partnership unless ... Log in to view full article.