Setting Up LLC Under Different State

[Jason Kim]

Hello BP Meembers,

I am currently in the process of setting up my LLC and my CPA told me to set it up under a different state LLC because it's much cheaper. I live in Chicago and he said that it costs around $500 to set up, and he also said to set up different LLC's if fix and flips are going to be partnered with someone. But if LLC is set up through Colorado, it only costs $150 to set up and I will be saving lot of money and the way the laws work will still be the same.

Is this really true and should I goahead and set it up that way?

Thank you in advance.

[Steven Hamilton II]

Jason,

I am in the Chicagoland area. I am in Gurnee. I can tell you this as a real estate investor and accountant this is the way it should be: Set up your LLC in the state in which your properties exist. Any other way is incorrect and will just cost you more in state filing fees. Setting up the LLC in another state will just require you to file another return in that state thereby costing you more in fees.

As a tax accountant and Enrolled Agent licensed in tax by the Department of Treasury.