How to hold the title when investing in another state

Question

Hi,I'm based in IL and own an LLC and considering investing in TXWhen purchasing a property there, would it be better to hold the title, in my personal name, my Illinois LLC or by creating a TX LLC?Leo

Ronald Rohde · Answer

We recommend TX LLC, the franchise tax filing threshold is quite high at $2.4m. Otherwise, no tax due.

TX LLC has no annual fees and registering a foreign LLC to do business in TX costs more than a new formation.

Don't put it in your personal name!

Ashish Acharya · Answer

@Yusuke Koike

If you use your Illinois LLC, you can do it, but you’d need to register it as a foreign LLC in Texas and keep up with their reporting rules. A lot of people just set up a Texas LLC instead since the property and any legal matters are already in that state. Either way, the income still ends up on your federal return, you’ll just have to file in Texas if your gross income is in millions (probably not applicable to you right now).This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.

Courtney Amaya · Answer

Texas Property Manager heavily disclaiming I'm no attorney or CPA (best pro's IMO to advise you) - I would ask them about sheltering your Texas investment asset from your personal assets.

That being said, Texas has some great Real Estate opportunities for y'all!

Fulton Abraham Sanchez · Answer

Hi @Yusuke Koike, Owning out-of-state property can have different implications depending on whether you title it personally, under your Illinois LLC, or form a Texas LLC. The right choice depends on a mix of liability protection, state filing requirements, and how you want the income taxed.

As a CPA working with many investors across multiple states, I’d recommend reviewing your long-term goals before deciding.

George Skidis · Answer

How many annual fees do you want to pay? Il LLC franchise tax. Texas LLC franchise tax. IL LLC tax return, Texas LLC tax return. Plus filing a Texas LLC as a foreign entity in Illinois fee, or filing an Illinois LLC as a foreign entity in Texas fee.

Trevor Higgins · Answer

I am not a lawyer or CPA so I'd always recommend contacting one or both of them. You don't need an LLC in the state you're buying. You can use the same LLC you have been and that is typically easier for tax purposes as well.

How to hold the title when investing in another state

How to hold the title when investing in another state

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