M-MTax
Level 12

Investors & landlords

This is a mess and you do need a tax pro. You are contributing an encumbered parcel of real estate to the LLC and the LLC is not liable for repayment of the mortgage making the interest on the note nondeductible. So each of you have only contributed the equity each of you owned to the LLC. You need a tax pro ASAP and get this straightened out with your lender.