LLC Structuring For An Out Of State Rental Property.

Rental Property Investor · Lehi, UT · Member since 2019 · 13 posts · 6 votes

Hello BP Community,

Hope all is well. I recently moved to Utah, and have a rental property in New Jersey. I purchased the property as a sole proprietor, and would like to transition to an LLC. Since I live in a different state, I don't know what the best strategy is. From my understand, I need to open an LLC in one, and register in the other state. What would be the most ideal way to maximize my tax returns. A penny for your thoughts?

With Kindest Regards,

Gabriel.

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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
3y
LLC will not impact your income taxes. This is more of a legal issue.
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Jason Marino
Attorney · Member since 2022 · 160 posts · 186 votes
3y
Hi Gabriel,
You have more than a single option to create a structure. If you are interested in an LLC, you could form a Utah LLC and then register it as a foreign entity in New Jersey in order to own the rental property. In this situation, there would be 2 States that you have to maintain the LLCs in, Utah and New Jersey. This means 2 registered agents to receive any notices, 2 compliance schedules that you have to maintain (if applicable). Another option would be to create a New Jersey LLC to own the property. This would require you to maintain the LLC in New Jersey and not in Utah.
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