My friend and I are looking to buy a house and rent it out. I was wondering what would be the best way of doing so (meaning who's name if any should be on the deed), in order to take advantage of the tax breaks that comes with owning a house and what is involved as far as paying back the govt. since this is a form of income.

 

If you're going to own rental property you might consider setting up an LLC. I personally would never own rental property in my own name. You and your buddy can be equal members of the LLC--which are generally taxed like partnerships. The profits and losses are passed through to the members and each member reports his share of profit/loss on his personal 1040.

An LLC offers some protection in the event there's a problem with the rental property--such as faulty wiring burns the place down and the renters sue you.

Check with a CPA or attorney in RI.