California investors have to register their non-CA LLC with CA state

One of the best benefits of real estate investment is to save on tax. However, their is a state that makes it very difficult if not impossible to avoid tax for investment out of state. One of the most popular question for newbies is: “I’m a California resident with an LLC formed in Ohio / Indiana / OR-turnkey-haven that holds my properties in that state.  Do I have to register my LLC with the California Secretary of State and file a California tax return and pay the $800 LLC Tax every year?” WTH, yes, you got the number right,

$800

 

The answer is almost always YES since California considers the LLC as “doing business in California” and therefore required to do all the things mentioned in the first paragraph above if you, as a member of the LLC, do anything on the LLC’s behalf while you are in California.  Below are two excerpts from FTB Form 3556 that I’m pretty sure indicts the whole lot of you!

I hope this clarifies the issue.  Feel free to reach out with any questions.

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