texas llc vs california llc?

Question

Hi, I live in california and have 2 rentals properties in california. In texas I have 3 rentals. Where to set up LLC for each state. Please include prices of each state filing fees and how to structure it better.

Answer 1

california beats texas anyday anytime

Answer 2

Hmm, I am but a lowly accounting student in texas, so I will start with the simple part.
(texas schedule of fees, see below for link)
"I. Domestic For-Profit Corporations
(Sections 4.151 & 4.152, BOC)

Reservation/Renewal of Entity Name $40.00
Certificate of Formation 300 .00
Statement of Operation as a Close Corporation 15.00 "

(note that the page specifies that LLCs have the same fees as for profit corps.)

There are very likely similar fees for California, as well as similar web resources.

Generally the process is to go to the state's Secretary of State office or similar, get the information and do the filing, this is generally it the state capitol, i.e. Sacremento and Austin in this case.

As to structure, that is something that requires experience I do not have. Best to talk to an accountant or a lawyer that specializes in such things. I would recommend both. The lawyer will know how to structure for liability sake, and the accountant will have the knowledge of how to set it up to minimize unpleasant tax consequences. Expensive, yes, but it is a one time thing that is important to do well. I would do the same were it my money.

There are also tons of online resources to teach yourself how to use LLC's as well as pay seminars.

ALSO (for what it is worth):
My wife and I manage our small apartment complex for a nice couple from Cali who now live in mexico.
Their lawyer, a gentleman with a LOT of experience in such matters, told them that a simple sole proprietership with really good insurance was just about as good as any corporation. I am unable to evaluate how good this advice really is, but I do respect the owners judgement in placing their trust in him.

This may or may not be a good idea for you, as an LLC does allow for extra equity through limited partners if that is something you are looking for, and a sole proprietership doesn't do that easily.

Answer 3

you could do it both way, notwithstanding as you've talked about in case you do a LLC in California it will be a overseas LLC in Texas. it is going to probable be more affordable doing it in Texas, because in additional to the cost of forming the LLC in California you'd be required to pay one extra cost for the LLC to operate in Texas. So economically it will be extra appropriate if the LLC is formed in Texas. You do comprehend that the taxes (agenda E) will now shift out of your own earnings to that of the LLC (you should continually verify with your tax advisers on the topic of tax questions) i imagine the numerous element about forming this LLC is that if limits all criminal duty to the LLC and preserve any own resources or your own position of abode. you should save the LLC hands length out of your own own money and different holdings you would have. i wish this has been of a few use to you, reliable success. "wrestle ON"

Answer 4

C,

The issue is more complicated than costs alone. The tax structure in Texas is drastically different from that in California, both for business and personal. Secondly owning out of state property is complicated upon transfer. This is a question that needs professional assistance to accurately determine what all of the relevant factors are.

Good Luck,
Dana B. President
www.thebarfieldgroup.com

Answer 5

But...I don't know anything about rental properties or LLCs or prices of each state's filing fees and how to structure it better. Do you have an easier question?

Answer 6

That's a tricky question