Newbie looking for CPA in California to discuss Set-Up Expenses

[Alison Dickens]

Hi BP community! I'm a newbie in San Diego, just starting out on my REI journey. Although 1st property has not been acquired yet, I have been busy in the month of December with setting up the business, with setup expenses in Education and LLC formation, etc. I am looking for recommendations for a CPA, who knows California tax law, to discuss implications for my 2017 tax return.

The topics of my questions include: (a) Out of State LLC Formation, and when is business technically done in California; and (b) Setup Expenses that can be deducted, how and when.

Any advice or recommendations of a California CPA would be greatly appreciated.  Thank you!

[Lee Ripma]

Hi Allison, congratulations on getting going.
I live in CA but my CPA is in CO. It doesn’t really matter where your CPA is in my opinion. I found one I like who is RE focused so I’m fine with the CO location. You live in CA so you’re doing business in CA, even if your properties are not in it. You need a CA LLC. I own property in MO and I still have a CA LLC. My business partner is an attorney and he has assured me that case law supports this. Even if you get an out of state LLC you’ll have to register it in CA and pay the minimum $800 tax. You’ll do a return for your LLC and then you’ll pass that income or loss through to the LLC members. Maybe that’s just you maybe you’ll have others in your LLC. This is reported on a K-1 which your accountant can prepare. Some basics, hopefully helpful!