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I have an investment in an Apt house in Texas. I own as a Delaware

LLC; I am the single...
I have an investment in an Apt house in Texas. I own as a Delaware LLC; I am the single member of the LLC (so treated as a sole proprietor). The income derives from Texas. I live in California. Do I need to become an LLC in California? I would then have to pay the minimum corp tax in California?
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4/2/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and thanks for using JustAnswer.com. If your LLC has any presence in the state of California which could include a mailing address, telephone number, PO Box etc then you would need to register your LLC as an out of state entity in California, and pay the minimum franchise tax. Also, as a resident of California you are taxed on the income derived from your LLC in Texas.

Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great night.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*


You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

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Customer reply replied 4 years ago

Thanks for your reply. Should I look up my LLC incorporation papers to see if it is linked to California, or if I am the only member, can I be fairly sure that it is indeed linked to California?

 

thanks again for your clear and concise answer.

 

John XXXX

Hello John,

Your LLC would not be linked to California automatically. You would need to file with the state as a foreign LLC. You would the owe the franchise tax.

Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great night.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*


You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Ask Your Own Tax Question
Customer reply replied 4 years ago

Thank you so much! I just wanted to be clear on this one point:


 


We went to the California Franchise Tax Board website. There we found this sentence under the heading of "Limited Liability Company" :


 


"If the LLC has a single member, it will be disregarded as separate from it's owner, unless it elects to be taxable as a corporation"


 


My LLC is composed of only me, no one else. So can I "elect" not to be taxable as a corporation? Or am I on the hook for the minimum corporate tax no matter what? I assume the answer is "yes"?Yell But a "no would be great Smile


 


Thank you. This service is excellent. Cool We'll use it again. No more information is needed.

You are right. It is disregarded and not a corporation. Please let me know if you need anything additional. Thanks for using JustAnswer and have a great day.

 

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*

 


You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
Megan C and 87 other Tax Specialists are ready to help you
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Thank you Charles for the positive rating and the generous bonus. Please come back and see me next time you have a question. It was a pleasure working with you today. I hope you have a great night.
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Customer reply replied 4 years ago

Here's the other side of the hook. If my Delaware LLC is in the business of receiving rental passive income from a Texas apartment house, am I "doing business in CA"


 


According to the my Delaware LLC info, which I looked up online, there is no link to me, neither name, address or state. It's registered to an agent in Delaware. It says that it's a "LP" or limited partnership. But the entity name is "Raveneaux TIC 1, LP" That's the name of the apartments, and I am TIC 1, but of course TIC 1 is not my name. Its a pseudonym. "Raveneaux TIC 1" maybe a Texas name, not sure. Or a name from the managers of the TIC-owned apartment house. It's owned by many tenants-in-common (TIC).


 


How about it. Can I duck this awful CA tax thing?

Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer
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Megan C
Megan C
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