CA Resident Looking to Invest out of State
Hello,
I’m looking to invest out of state. Below is a list of questions I’d like to get advice on to determine how best to proceed. Would appreciate any feedback!
1. Should I incorporate in the state I will own and rent the property in as a single member LLC? Or should I operate as a sole proprietor and get an umbrella insurance policy instead?
2. Will I have to additionally pay CA franchise tax of $800 / year?
3. Should the property deed be under my name, or if incorporating under the LLC?
4. I would like to do a cash out refi after seasoning the property (BRRR).
a. Should I own the loan in my name, or if incorporating, in the LLC's name?
b. Can I count refi mortgage interest as a business expense?
c. Are there any limits on the interest deductions (e.g., due to new Trump tax plan)?
5. Should I deduct depreciation?
6. Can I treat property tax as a business expense? Is there any limit due to new Trump tax plan?
7. Will I be double-taxed on rental income by CA and by the state where I own the rental property?
8. Anyone know a good lawyer and CPA in the Bay Area who would be able to help me with:
a. Forming an LLC if necessary
b. Navigating contracts with out of state property purchases and out of state property management
c. Accounting and filing taxes
Many thanks!