Single member LLC and EIN

[Gina Qing]

Hello BP friends, Hope all is well. 

I am going to set up a single member LLC in California and use that entity to hold the title of a property that we will be purchasing. I and my husband will be the only members in the LLC.

To start a single member LLC, do I have to apply for a new EIN for the LLC? I had an impression that it would not be necessary, as a single member LLC is a disregarded entity, and the tax return will be filed under our personal social security numbers.

Also, if the property is in a different state than the one where the LLC is based in, would that be ok?

Thank you very much for your expertise and insights in advance. 

Best Regards, 

[Greg Scott]

A single member LLC typically means there is one person that owns the LLC. Unless CA laws are different, a husband and wife would be a multi-member LLC.

Are you sure you need an LLC? Most people starting out are probably better off with good liability insurance. If you have a high net worth, get a sizeable umbrella liability policy.

You do not need to have the LLC and the property be in the same state, but that may require additional filings. Many states will require you to register the LLC as a foreign entity if you want to hold property in that state, and may require you have a local registered agent. All those filings and annual fees can get pretty expensive, particularly for someone from CA.

I don't believe having or not having an EIN has any impact on your taxes since it will be a flow-through entity, but I'd check with a CPA.