From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1522 topics, 14440 posts — Last Post 04/22/14, 10:54PM

BiggerPockets Exclusive PRO Area

118 topics, 843 posts — Last Post 04/21/14, 12:11PM

New Member Introductions

10956 topics, 86261 posts — Last Post 04/22/14, 11:30PM

Real Estate Success Stories

397 topics, 6186 posts — Last Post 04/22/14, 10:39AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5980 topics, 47130 posts — Last Post 04/22/14, 11:36PM

Renters

649 topics, 5853 posts — Last Post 04/22/14, 09:53PM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/21/14, 03:59PM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

658 topics, 6312 posts — Last Post 04/22/14, 09:11PM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3701 topics, 29678 posts — Last Post 04/22/14, 11:36PM

Real Estate Guru, Book & Course Reviews and Discussions

1138 topics, 11588 posts — Last Post 04/22/14, 08:22PM

Ask About A Real Estate Company

742 topics, 7341 posts — Last Post 04/22/14, 11:25PM

Real Estate Investing

Real Estate Strategies

Wholesaling

5625 topics, 43878 posts — Last Post 04/22/14, 10:27PM

Rehabbing and House Flipping

3345 topics, 31074 posts — Last Post 04/22/14, 10:06PM

Real Estate Development & New Home Construction

554 topics, 4694 posts — Last Post 04/22/14, 09:17PM

Innovative Strategies

705 topics, 6044 posts — Last Post 04/22/14, 04:06PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

867 topics, 6692 posts — Last Post 04/22/14, 08:22PM

Rent to Own a.k.a. Lease Purchase, Lease Options

696 topics, 4914 posts — Last Post 04/21/14, 10:03PM

1031 Exchanges

143 topics, 1062 posts — Last Post 04/22/14, 03:21PM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1691 topics, 11313 posts — Last Post 04/22/14, 09:26PM

HUD, VA, and Tax Sales

416 topics, 3102 posts — Last Post 04/22/14, 01:39PM

REOs

1217 topics, 10594 posts — Last Post 04/22/14, 09:38PM

Short Sales

1538 topics, 13139 posts — Last Post 04/22/14, 01:38PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7233 topics, 71002 posts — Last Post 04/22/14, 11:12PM

Mobile Homes & Mobile Home Park Investing

638 topics, 5142 posts — Last Post 04/20/14, 08:42PM

Investor Basics

Starting Out

7724 topics, 60622 posts — Last Post 04/22/14, 10:08PM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4725 topics, 37300 posts — Last Post 04/22/14, 10:31PM

Real Estate Investor Marketing

1737 topics, 14138 posts — Last Post 04/22/14, 06:37PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1412 topics, 9003 posts — Last Post 04/22/14, 09:04PM

Multi-Family and Apartment Investing

1121 topics, 9347 posts — Last Post 04/22/14, 10:00PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

644 topics, 4909 posts — Last Post 04/22/14, 12:20PM

Business Basics

Goals, Business Plans & Entities

831 topics, 7564 posts — Last Post 04/22/14, 08:50PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2800 topics, 20116 posts — Last Post 04/22/14, 09:59PM

Property Insurance

310 topics, 2055 posts — Last Post 04/22/14, 07:38AM

Personal Finance Discussion

330 topics, 2754 posts — Last Post 04/22/14, 12:06PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2851 topics, 19834 posts — Last Post 04/22/14, 10:54PM

Creative Real Estate Financing

1216 topics, 8833 posts — Last Post 04/22/14, 11:24PM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1215 topics, 8018 posts — Last Post 04/22/14, 09:50PM

Bankers, Lenders, and Mortgage Brokers

442 topics, 1929 posts — Last Post 04/22/14, 11:03AM

Contractors

269 topics, 1690 posts — Last Post 04/22/14, 07:33AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

2007 topics, 11695 posts — Last Post 04/22/14, 10:52PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

65 topics, 439 posts — Last Post 04/22/14, 09:27AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15070 topics, 54077 posts — Last Post 04/22/14, 10:47PM

Real Estate Events and Happenings

167 topics, 2585 posts — Last Post 04/22/14, 11:30PM

Off-Topic

Off Topic

Off-Topic

2906 topics, 32433 posts — Last Post 04/22/14, 09:47PM

Housing News & Real Estate Market

918 topics, 8371 posts — Last Post 04/22/14, 09:18PM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Tax, Legal Issues, Contracts, Self-Directed IRA » Dissolving an LLC, Moving to another State - How does it work?

Dissolving an LLC, Moving to another State - How does it work?

6 posts by 4 users

Signup


Right now my LLC is located in California. After paying an immense amount in Taxes to California, we are deciding to move it to Nevada.

We have family there, so we feel that it is a great move.

With that said, I understand that the process is as such:

1) Close the LLC (in California)
2) Pay Taxes on that LLC (As in, pay taxes all the way from Jan 2010 to - June 2010)
3) Re-open it in another state (Nevada)

Can anyone elaborate in more details on how this works? Are these steps correct? Do I pay taxes after I close my LLC? We'd prefer to do away with the taxes for California immediately. You don't need to be a resident of Nevada to open an LLC there, correct?

We travel constantly back and fourth from California to Nevada, so can anyone also go into further detail(s) on the pros vs. cons between the two?

Thanks!



Real Estate Investor · Ellicott City, Maryland


First, I'm not a tax professional, so don't assume anything I say is correct...

That said, here are a couple things to think about:

- Assuming your LLC is taxed as a sole proprietorship, a partnership or an S-corporation, the income will flow through to you personal tax returns, and you will pay taxes to whichever state you would otherwise be paying taxes, regardless of where your LLC is registered. And CA may require you to register the LLC as a foreign entity in that state. So, just because you move your CA LLC to NV doesn't mean you'll suddenly get out of paying state taxes on the income in CA.

- As for paying taxes after you close the LLC in CA, you can estimate your tax burden and pay estimated taxes any time you like. But, the official 2010 tax filing for the LLC (and for any flow-through taxes to you personally) can't be made until 2011. This is because there will still be tax changes between now and then, and the new tax forms don't come out until later in the year (or even early next year). If you happen to pay the exact amount owed in estimated, you're good for next year and just need to file the paperwork by March 15 or April 15 (depending on the corporate structure). If you overpay or underpay, the difference will be taken care of next year.

I would highly recommend talking to a CPA or tax professional to help you out with this...


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


SFR Investor · Wheat Ridge, Colorado


What does your LLC do?

No, you don't need to be a resident in NV to create an LLC there, or any other state for that matter. But depending on what your LLC does, it may have to register in CA as a foreign entity. For example, if you own property in CA, you'll have to register a non CA LLC as a foreign entity and pay all the same taxes you're paying now.


Jon Holdman, Flying Phoenix LLC



I do not own any property in California, I am 23 years old.

I made enough money to hit the higher brackets of California's taxes.

My business is particularly done online -- We have no physical buildings in California.


Are there anyways to get around the California taxes by forming the LLC in Nevada?


Thanks.



Real Estate Investor · Ellicott City, Maryland


Originally posted by Matt Garcia:
Are there anyways to get around the California taxes by forming the LLC in Nevada?


Again, recommend talking to a tax professional who can probably answer your questions and make some suggestions...

But, I would guess that if you live in California and/or you're operating the business out of California (and especially if you hold inventory in California), you're going to pay taxes there.

Just a guess...


Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358
Website: http://www.123flip.com
CHECK OUT MY BIGGERPOCKETS BOOKS: http://www.biggerpockets.com/flippingbook


Real Estate Investor · Phoenix, Arizona


Matt, your idea is not a bad one. Here are some things you will need to do in order to avoid having to pay taxes in California.

1. Form a corporation in NV and do not elect to be treated under subchapter S. In other words, form a C Corp. This will allow you to live in CA if you wish and not have the taxes pass through to you.

2. Have your bank account in NV or any state outside CA that does not have an income tax. Make sure payments go into that account.

3. Have employees, operations, offices, warehouses, etc. outside CA. Ideally, you would not want any significant degree of concentration of any of the operations in a state that has an income tax. If your business is online and you provide a service, as opposed to a product, thiss should be easier to do. (You can also hire employees from other countries for cheaper through various websites for outsourcing.)

4. You will, of course, continue to pay federal income taxes for the NV corporation. If you take out any of the profits as salary or other compensation, CA will tax you on it if you are residing there.

5. If your business is global, the same principles I have mentioned could apply to setting up the corporation outside the U.S. but there are more complex rules involved to reduce federal taxes (CFC, etc.).

If your income is very high, tax planning is one of the best investments of your money because a few thousand dollars to a good tax planning attorney can save you many times that much in taxes. But you need to do all this properly to make sure you are not violating the million pages of tax laws that the states and federal government have.





Sign up