All Forum Posts by: Account Closed

Thank you all for your quick replies - all very helpful and appreciated!

@Basit Siddiqi - I was excited to read that the capital gains of a TX property held in a CA LLC won't necessarily be taxed as CA income - great news to me!

I think the smart thing for me to do is to roll the TX property into my CA LLC and register the LLC as a foreign LLC in TX. It'll be easier to manage, and I'll only have one annual $800 CA franchise fee, without giving up any potential tax savings.

Thanks all! Happy holidays!!

Hi Bigger Pockets Family,

I currently live in CA and own a duplex in a CA domestic LLC. However, I'll be buying a few rental properties in TX, and I'm not sure whether or not I should open a new TX domestic LLC (and subsequently register it as a CA foreign LLC because of my CA residency), or if I should just register my current CA LLC as a foreign entity in TX.

Here are my thoughts, and I know it’s ultimately a question for an attorney or tax professional, but I’d love to get your all’s opinion on it. 

My thinking is that if I continue to use my CA-based LLC for TX investments, then the capital gains on my TX properties will inevitably be taxed in CA (even if I no longer live there in 10 years) because the business is based in CA. However, holding my TX properties in a TX-based LLC would only subject me to capital gains on the sale of properties if I'm still a CA resident at that time. For that reason, it'd be better to setup a new TX-based LLC purely for TX properties.

I don’t know where I’ll be living in 10-15 years (when I’d consider selling anything), but it very well might not be CA.

THANK YOU!