Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

How easy or hard it is to establish a pass through taxation

in an LLC located in...
How easy or hard it is to establish a pass through taxation in an LLC located in California.
What is necessary?

Thank you

Gregory
Show More
Show Less
Ask Your Own Tax Question
Answered in 4 minutes by:
6/10/2013
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
Verified

MyVirtualCPA :

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.

MyVirtualCPA :

Pass through taxation is the default taxation of a pass through entity, so there is nothing special you need to do to establish pass through taxation. All you need to do is have your LLC set up.

Customer:

Is this true in California?

MyVirtualCPA :

It's true anywhere

Customer:

I thought I read somewhere that CA makes it a little more complicated.

MyVirtualCPA :

No, it's the same anywhere. California just has a minimum $800 per year franchise tax on any business

MyVirtualCPA :

you can't get away from that by being a pass through entity you would still owe the franchise tax

MyVirtualCPA :

but your income tax would be pass through

MyVirtualCPA :

So, you still have to file business tax returns in addition to your income tax returns, in California. You can't get around this.

Customer:

Ah. OK that's the deal. Can the franchise taxes be offset by losses if the LLC is working at a deficit?

MyVirtualCPA :

No. The franchise tax is a minimum tax

MyVirtualCPA :

You could lose $1 million and still have to pay the $800

MyVirtualCPA :

You also have an LLC fee based on your gross receipts, if your gross receipts are in excess of $250,000.

MyVirtualCPA :

http://www.hhcpa.com/blogs/income-tax-accountants-cpa/schedule-c-doing-business-in-california-as-single-member-llc

MyVirtualCPA :

Is there anything else I can assist you with? If not, please rate my response as "excellent" so that I may receive credit for assisting you today?

Customer:

Ah yes...the gross receipts is also unique to CA right?

MyVirtualCPA :

Yes, unique to CA as well.

MyVirtualCPA :

It's a state tax thing. CA likes getting paid :-)

Customer:

Right. Thank you for you help.

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
Ask your own question now
Ask Megan C Your Own Question
Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
16,581 Satisfied Customers
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Megan C is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

16,581 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
If I overpaid new Mexico Gross Receipt taxes for from 2007
If I overpaid new Mexico Gross Receipt taxes for from 2007 to 2012, can I now request for a refund. I know there is a statue of limitation of refile, or refund, but one document says I have only three… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
Tax Question: Non-Resident Withholding Tax, Franchise Tax
Tax Question: Non-Resident Withholding Tax, Franchise Tax Board, CA HISTORY: 1. The property is in California 2. The owner resides in outside of California 3. Metro Property Management collects monthl… read more
abci168
abci168
Principal
27 satisfied customers
I received a Request for Tax Return letter from the
I received a Request for Tax Return letter from the California Franchise Tax Board which states the following (and I quote) "We received information from Waco Title Company Fort Smith indicating that … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
On my tax return I am asked to Allocate New York State
On my tax return I am asked to Allocate New York State Adjustmentsof $320 I only resided in New York 8 months then moved to the USVI … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,458 satisfied customers
Is there a retail inventory tax for the state of California?
Is there a retail inventory tax for the state of California and how does it differ from other states? Is it just a federal tax or is there no tax?… read more
DanielleCPA
DanielleCPA
Certified Public Accountant
Bachelor's Degree
76 satisfied customers
For a ny state partnership tax return, if you file an
For a ny state partnership tax return, if you file an extension but don't pay anything and then end up owing a lot. Do they still recognize the extension or do they charge a failure to pay penalty (fo… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What is a franchise tax. What is franchise tax and it taxed
Is there anything else the Accountant should be aware of?Customer: the home sold was inherented… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Our S-corp 3 year average gross receipts will exceed the $10
Our S-corp 3 year average gross receipts will exceed the $10 million thershold in 2017. I know we have to file form 3115 to change our accounting method from cash to accrual but I am unclear if that w… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
31 satisfied customers
Does the california franchise tax board have any current or
does the california franchise tax board have any current or upcoming amnesty programs for limited liability companies … read more
abci168
abci168
Principal
27 satisfied customers
The CA franchise tax board call yesterday stating that I
The CA franchise tax board call yesterday stating that I didn't file my 2001 540 returns. I have been on a garnish plan with them since about 2014. I can't find that years forms. What can I do? … read more
abci168
abci168
Principal
27 satisfied customers
Thanks for the help beforehand. I want to file a tax return
For Lane: Hi and thanks for the help beforehand.I want to file a tax return on under california Tax Statues. However, there are 3 things in mind that are important for my question:1. I'm a Non-US Resi… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
We have a -term tax client - an LLC - whose tax return is
We have a long-term tax client - an LLC - whose tax return is due on extension Friday. Because of health problems, the owner is running very late and finishing an accurate return by Friday is not like… read more
taxmanrog
taxmanrog
Master\u0027s Degree
698 satisfied customers
I have question regarding business tax return, When
When reporting wage for expense, do I report net wages (excluding tax withholding part) then report the payroll tax separately, or report the gross wage as wage expense … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I sent my out of state California excise franchise tax work
I sent my out of state California excise franchise tax work in but it never arrived … read more
James Daloisio
James Daloisio
Attorney
Doctoral Degree
56 satisfied customers
Can franking credit on an Australian income tax return be
Can franking credit on an Australian income tax return be used on Form 1116 as tax paid on the franked distributions? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I was trying to file a delaware franchise tax return +
i was trying to file a delaware franchise tax return + annual report and I saw that the person filing the report does not have to provide any kind of authentication at the time of filing. Is this corr… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Business tax return. I have a Missouri LLC (partnership)
Business tax return. I have a Missouri LLC (partnership) that bought property and leases it. On form 1065 Income - do I list the rental income as gross receipts or other income. Also do I file a MO 10… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x