Updated over 12 years ago on . Most recent reply
What state to setup a corporation in?
I am doing my first flip and it appears that I should setup an "S" corporation or a LLC that is filed as an "S" corporation. Does it matter what state the LLC or corporation is setup in? I live in California which is also where the flip is.
I have up to $100k in profit.
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#1 Multi-Family and Apartment Investing Contributor
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- Santa Rosa, CA
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#1 Multi-Family and Apartment Investing Contributor
- Investor
- Santa Rosa, CA
I totally agree with David. I doubt that you need any entity at all. I pay at least $1,000/year for each entity's tax return, and some of them are over $4,000. In CA, the LLC's franchise fee to the state STARTS at $800/year, and can go over $10,000 per year if the GROSS (yeah, NOT net) income exceeds certain levels. Not to mention that insurance and interest rates are higher. Only do the entity if you have partners or equity investors, unless you like to pay lots of money for very little (or no) benefit.