ask incorporationquestion:
our sponsors:
helpful links:
CA resident buying rental property in IL
I reside in California but want to purchase rental property in Illinois. First, can the LLC be organized in IL to avoid paying the annual franchise tax fee of $800 in CA? Second, after I create an LLC in IL, and post purchase(s) of property in IL I assume that the rental income passes through to me if I am the only owner? Meaning I would claim the rental profit & depreciation on my yearly personal taxes? Do I need to notify California regarding the property income? 3) bank that makes all mortgage payments is in IL, however I reside in CA do I still owe a foreign entity tax of $800/year? Thanks again!
Dear John,
Since the property you purchase is in Illinois you actually need to register the LLC in IL (regardless of where you reside), since this LLC would be "doing business" in Illinois, and not in California.
Since the property will be held in an LLC, the rental income would pass to you directly, hence the LLC would have no obligation to be registered in California and pay the franchise tax (as long as the only business this LLC has is this rental property).
You are welcome to contact us directly via email or chat if you have any additional questions or want to get assistance with placing an order.
Good luck with your business,
Robert Kowalski @
IncorporationAnswers.org
rate this answer:
related questions:
- CA S-Corp selling on the road, out of state
- Remote working in Ohio
- Business Partner going out of State
- CA LLC Doing Business Out-of-State
- Re-incorporate, foreign qualify or new LLC?
See all questions from Doing Business Out of State - Miscellaneous
leave your comment:
disclaimer:
This post has been written for educational purposes only and was not
meant to be legal advice and should not be construed as legal advice
or be relied upon. The post may contain errors, inaccuracies and/or
omissions. You should always consult an attorney admitted to practice
in your jurisdiction for specific advice. This post may be deemed as
Attorney Advertising. IncorporationAnswers.org do not assume any
responsibility for harm or damage resulting from the use of this
information in any way. For more information please see our Terms of
Service.
Please note that according to IRS Circular 230 to ensure compliance with
requirements imposed by the IRS, we inform you that any tax advice contained
in this writing was not intended or written to be used, and cannot be used,
for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or
(ii) promoting, marketing or recommending to another party any matters addressed herein.
