Quote from @Chris Wade: In 2016, there were two Chief Counsel Rulings by the Franchise Tax Board where they declared, at least in some instances, that business trusts like a Wyoming Statutory Trust, are not considered "corporations" and would therefore not be subject to the minimum franchise tax as defined in CA Rev & Tax Code § 23153.

Box 1 on K1 should not be subject to SE tax as far as I know.

Once the Management LLC collects those fees, transferring funds to the Parent LLC typically does not trigger additional tax, as long as all entities are disregarded and owned by the same individual.

There should be an attorney with tax as well as contract/biz law who can properly advise on this. 

If all your incomes are Passive Income, you do not need to pay any self-employment Tax as a single member LLC.

For example he will be required to pay not only capital gains but also depreciation recapture, the Obama tax (as mentioned above) and his medicare premiums will most likely go to the max for 2 years, longer if the sale is spread across different years. 

Currently thinking of selling my personal residence, almost 2 years in April so I can take advantage of not having to pay any capital gains tax as well has been turning into a headache trying to renovate the house itself. 

I also wonder how this is going to work.. you cant tax a parcel that has lost a 5 mil dollar improvement ??? 

You'll pay your fed income tax rate - whatever that is - but then you absorb a 15% self employment tax as well which is why most ppl say there is a 35% - 40% tax on flip and when you add both taxes together that is accurate.  

Education is expensive and paying the dumb tax as quickly as possible is the fastest way to propel growth.