All Forum Posts by: Zachary Bohn

The income will be taxed by your resident state (CA) and by Indiana, but generally you will receive a credit for any tax paid to the other state. Since CA has higher tax rates in general you will need to plan for the additional tax owed to CA.

@Michael Plaks I haven't dealt too much with a 721 but, I was trying to make sure people weren't thinking you could just go buy a REIT. Also isn't the way you accomplish a 721 is by first contributing to a partnership that then becomes a REIT

@Todd Rasmussen but having the properties outside of the LLC does nothing to protect you. If you get sued personally the houses are in your name, and they could take the properties. You are essentially just treating the LLC as a property manager. This doesn't seem like it would provide any protection

@Matt Honeyford no that isn't an option

@Todd Rasmussen that's fine for you but that isn't a true statement in other states. Just don't want people starting LLC's with their spouse only to find out they have to file an additional return they weren't expecting

@Todd Rasmussen what is the point of having the LLC if the properties aren't in them? That kind of defeats the purpose of having the LLC

@Todd Rasmussen an LLC owned by a husband and wife is only disregarded if you live in a community property state otherwise you should be filing as a partnership

@Matt Honeyford You can't exchange property for a stock. You have to exchange property for property to do a like kind exchange

I agree with @Steve Hall but I'm wondering why an S-Corp if the company is purchasing properties for buy and hold to rent they should never be placed in an S-Corp

@Tomas Satas what @Steve Hall is pretty much on the money. Unless you have enough income in the S-Corp there really isn't a benefit. With an S-Corp you still have to pay yourself a reasonable salary and there aren't hard lines for what a reasonable salary is. Once income gets above $60k is when the benefits start to offset the cost of filing for the S-Corp