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TaxTom, Internet Researcher
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I need tax advice for my LLC. My accountant said that the LLC

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I need tax advice for my LLC. My accountant said that the LLC I set up out of Nevada will not work, I am based in California. Is her opinion correct? Otherwise I will have to pay $1600 or more in unpaid franchise taxes to resuscitate my S Corp.

TaxTom :

Hello, Unless a majority of the owners live in Nevada you will need to change the LLC to California. Here are a few options Thanks Tom

Moving an LLC

Limited liability companies that relocate face similar choices to corporations but with more options for handling things organizationally:

  • Continue the LLC in the old state and register to do business as a foreign LLC in the new state. Doing so means duplicate annual report and/or franchise tax fees. It can also complicate tax filing and reporting for the LLC and its members.

  • Liquidate the LLC in the old state and form an LLC in the new state. Liquidating an LLC does not entail any federal tax consequences. Since the LLC is a pass-through entity, it does not report any gain from liquidation.

  • Form an LLC in the new state and have members (owners) contribute membership interests from the original LLC.

  • Form an LLC in the new state and merge the existing LLC into it. This is viewed as a continuation of the old LLC and no new federal EIN is required. There are also no immediate tax consequences, provided LLC members from the old state continue to own at least a 50% interest in the capital and profits of the LLC in the new state.

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