Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I may be investing/taking a partnership role in an LLC whose principle place of business is California and which is registered in Delaware. I'm a Texas citizen.

The company is not now a sole proprietorship; they have three partners already. I'm still working on their Fed tax filing election.

For what tax ramifications should I be alert from a partnership perspective?

What other questions should I be asking (you can see my ignorance on the subject)? What pubs should I be reading?

Might there be a better relationship to establish from a purely tax perspective (assuming the investment perspectives are a wash)?

Thanks

Eric Hines
Print the post Back To Top
No. of Recommendations: 3
For what tax ramifications should I be alert from a partnership perspective?

Because the LLC is operating in California, you are going to have to file a CA income tax return and pay income taxes to CA. Normally at this point I'd talk about how your resident state usually offers a tax credit to offset some of the double state taxation. But that's moot for a Texas resident. :-(

So you're going to have some extra costs with this investment - the cost of state income taxes. (Plus there might be some compliance costs like a higher tax return preparation fee.)

--Peter
Print the post Back To Top
No. of Recommendations: 0
Print the post Back To Top
No. of Recommendations: 0
Peter, thanks.

It really is that simple? I have no problem paying CA taxes (well, I have no problem following the law...); I also was concerned about reporting.

Will I need to report all of my income to CA, or only that part that comes from within the state (this investment, for instance)?

[T]here might be some compliance costs like a higher tax return preparation fee.

Is this something that packages like TaxAct can't handle?

Thanks

And Happy New Year, to you and to all on the boards.

Eric Hines
Print the post Back To Top
No. of Recommendations: 0
Thank you, Ma'am.

Eric Hines
Print the post Back To Top
No. of Recommendations: 2
Will I need to report all of my income to CA, or only that part that comes from within the state (this investment, for instance)?

You actually end up reporting both. You report your total income and deductions, then calculate a tentative tax amount as if you were a CA resident. Then you report the portion of your income that's from CA sources. The ratio of that to your total income gets applied to that tentative tax number. Roughly, anyway.

You'll want to take a look at CA form 540NR and schedule CANR.

Is this something that packages like TaxAct can't handle?

I'd take a close look. I'm sure that TaxAct (and similar) can handle CA resident taxes. I'm not as sure they can handle Non-resident taxes, but there's a good chance that they do. You'd have to investigate the capabilities of the program you prefer.

--Peter
Print the post Back To Top
No. of Recommendations: 0
You're up way too early on New Year's Day.

But thank you.

Eric Hines
Print the post Back To Top
No. of Recommendations: 3
You're up way too early on New Year's Day.

Probably still up. You know those wild & crazy California accountants.

Phil
Rule Your Retirement Home Fool
Print the post Back To Top
No. of Recommendations: 1
(To Peter:) You're up way too early on New Year's Day.
-----------------------------
Probably still up. You know those wild & crazy California accountants.

Phil
Rule Your Retirement Home Fool

-----------------------------
OR - he's up early to get a good seat for the Rose Bowl parade, to better see the WISCONSIN float and marching band. (For the 3rd straight year.)

GO BADGERS!

Bill <--- (UW-Class of '75)
Print the post Back To Top
No. of Recommendations: 3
You're up way too early on New Year's Day.

As are you!!! :-)

Phil had the correct guess. Us wild and crazy California tax accountants know how to party!

Actually, it was a marathon session playing video games with my son. He got a new game for Christmas and we finally had a chance to sit down and play together. Just don't tell his mother (my DW) that he was up so late.

--Peter
Print the post Back To Top
No. of Recommendations: 0
Just don't tell his mother (my DW) that he was up so late.

Your secret is safe with us (as long as she doesn't monitor your postings).

Ira
Print the post Back To Top