@Rob NewsomInvesting in a state with an income tax may require you to file a non-resident state tax return with that state.States normally try to avoid double state taxation by providing a credit for taxes paid to other states.I would say - look to invest where the numbers make sense based on your critera even if that means looking in a state with an income tax.There are 7 states without an income tax - with your logic, you are missing out on investing in 85% of the united states.

Hi,It seems that Revenue and Taxation code section 3712 lists all of the liens and liabilities that may be transferred with the property:https://www.boe.ca.gov/lawguides/property/archive/...Does anyone have any advice on how to determine ahead of time what liabilities there are for a given property?

The pass-through would occur in the partnership or s-corporation scenario.The taxation of the income would depend on the designation of the taxpayer whether they are considered a real estate professional or passive investor as well as whether they are renting or flipping for example.  

I think the intent of UBIT is to keep BUSINESSES on the same level playing field with respect to taxation.

Donald, I recommend finding an accountant that specializes in real estate taxation.

Thanks to various factors like taxation etc., but this is and has been an established fact for pretty much forever.

@Lotta Rozenson,I recommend finding an accountant that specializes in real estate taxation.

I also have an aptitude for taxation issues so I find doing my own buy and hold business taxes via my pass through LLC to be any effort at all thanks to turbo tax premium.

As well, if they hold it for 366 days before paying me back, would that not equal capital gains taxation, too?

@Emelie Deans Finding a CPA that specializes in real estate taxation is definitely a necessity to be able to take advantage of all the tax strategies.