We have developed a technique based on a proposed IRS regulation that allows for the bifurcation of the LLC interest, whereby each owner would own a managing member, and a member (investment) interest. Rather, than just a managing member interest. This requires that the company be a non-professional type business, and that the allocation of the member/managing member interests have substantial economic effect. If this is the case and the managing members receive guaranteed payments that are reasonable compensation for services provided to the LLC, then the managing member interest would be subject to self employment tax and the member interest would not be subject to SE tax. This is much the same way that an S-Corporation works. But remember, that this is based on a proposed regulation, and is not without risk. It would not be subject to judicial review, but the IRS could not charge penalties if you relied on it. If you own an LLC as a managing member, and would like to structure it such that you could lower SE tax, you should consider this strategy.