All Forum Posts by: Katie L.

@Scott Carrillo  I agree with @Eamonn McElroy.  I think it's time for you to find a different set of advisors.

*This post does not create an attorney-client or CPA-client relationship.  Readers are advised to seek professional advice.

@Allison Meggison  No requirements to my knowledge.  WY may have different laws.  Attorney will likely not tell you anything either, but might be willing to pass a message along.

*This post does not create an attorney-client or CPA-client relationship. Readers are advised to seek professional advice.

@Allison Meggison I think that's the point of using a commercial registered agent... for anonymity. If you had a legal issue, you would need to serve the registered agent and use them as a point of contact. If the WY LLC is doing business in CA, you can try checking the CA Secretary of State website because members and managers are often listed. Or if there is an organizer listed on the original articles, it is usually an attorney and you can try using them as a go-between.

*This post does not create an attorney-client or CPA-client relationship.  Readers are advised to seek professional advice.

@John Whittington 

If you have NV rentals, then it may be a good idea to create a NV LLC. Oftentimes I am getting this question more so from the perspective of someone like Matt who started the thread who is a CA resident and has CA properties and is considering a NV LLC. If you ask 10 people, you probably will get 10 different answers. There's isn't a right or wrong answer per se, and of course, everyone's situation is different. I cannot stress enough the importance of talking with a professional who is familiar with your own situation. These forum posts are great for idea generating, but not something to rely upon because each commentator is only seeing a small piece of the puzzle. This is complicated even further of course since each state has different rules and laws about jurisdiction and what kinds of cases they will or will not hear. I guess bottom line is that it may be a good idea to create a NV LLC for NV rental property, but if that person is a CA resident, the LLC will still likely be subject to CA taxes.

*This post does not create an attorney-client or CPA-client relationship.  Readers are advised to seek professional advice.  The information contained in this post is not to be relied upon.

@Alice Yip If you live in California, have you been registering in CA and paying the $800 minimum tax?  Seems you may be "doing business in CA" so that's something you will want to look into.  The Franchise Tax Board takes a very broad view of what constitutes doing business in their state, and making managerial decisions will likely subject you to their tax authority.

I second @Daniel Hyman for a WI accountant.  If you need CA-based accountants since you are CA resident and filing that beastly CA resident tax return, I know several in San Diego I can get you in touch with.

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.

@Matt Smith

California is a sort of beastly state when it comes to taxes and filings. Even if you create a non-CA LLC, if you are managing the business from California, you will be deemed to be "doing business" in California and therefore subject to CA taxes. California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k. So, if you create an LLC in another state, you will need to register it as a foreign LLC in California. Though, this process will be the same for the other state (if you created a CA LLC you will need to register it as a foreign LLC in the state in which you are doing business/holding property).

Most likely the state where the property is located is where lawsuits would be brought if they are something for personal injury like a trip and fall or something of that nature because the "cause of action" arose in that state. So even if you pick a state with stronger protections like WY or NV, the cause of action arose in the state where the tenant fell, so likely that the court where the accident happened would have jurisdiction. California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

*This post is informational only and is not to be relied upon. Readers are advised to seek professional advice. This post does not create an attorney-client or CPA-client relationship.

@Scott Carrillo

California is a sort of beastly state when it comes to taxes and filings. Even if you create a non-CA LLC, if you are managing the business from California, you will be deemed to be "doing business" in California and therefore subject to CA taxes. California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k. So, if you create an LLC in another state, you will need to register it as a foreign LLC in California. Just because you created a WY LLC does not allow you to escape CA taxes and filing fees.

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.

@Scott Carrillo

That price sounds entirely reasonable to me. You have to understand that a CPA’s time IS his/her money. CPAs aren’t out selling merchandise or some kind of goods that they receive a mark-up on to make money. Even though your return may not have complicated items of income or expenses, it takes time to set up a return, gather information, document the supporting info, converse back and forth with the client, postage, printing ink, software, etc. not to mention the liability the CPA is absorbing by signing the return as a paid preparer. All of that adds up quickly and $600, especially for the Bay Area in CA, sounds entirely reasonable to me. If your entity starts making money I wouldn’t be surprised to see that cost go up. Most entity returns in CA run probably closer to $1,000 as a general estimate. There’s always the option to self-prepare if you find the cost too high, and you may soon have a newfound appreciation for that $600 haha. I know CPAs in San Diego if you want to get a second quote.

*this post does not create an attorney-client or CPA-client relationship. Readers are advised to seek professional advice.

@Mia Trasolini @Genail Anderson

I know a few good ones in San Diego if you want to PM me. @Brian Schmelzlen is always an excellent choice.

@Jan H.

You've raised a couple of issues. Firstly, if you're in California, that's a community property state. Sounds like the property is your wife's separate property? If so, is she willing to transmute it to community property? Is your LLC interest community property? Any transmutation needs to be done in writing.

Also, you might want to look into the requirement that the property be held for investment purposes.  Generally, the IRS wants to see at least a year or two of holding the property prior to entering into a 1031 exchange.  The parties on both sides of the exchange (seller and then buyer of new property) must be the same.

Additionally, if you're planning on contributing this property to an LLC, are you the only member in the LLC? Can your wife maybe put the property into a single member LLC and then SMLLC is the seller and purchaser of the new property?

There are several 1031 experts on BP that can probably help you out.  @Dave Foster is a great resource.

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.