Questions about purchasing property out of state

[Ian Tan]

Hi all -- first time posting on this website. Please forgive me if this topic has already been addressed in another forum. I'm still figuring out how to navigate everything.

Background: I'm based in Los Angeles and looking to purchase commercial property (multi-units and/or plazas) in Las Vegas. This has brought two ponderous questions to mind that I'm hoping some of you have experience with:

1. Would it be better to establish a California LLC or a Nevada LLC when purchasing property in Las Vegas?

2. Would it be better to seek a lender in California or Nevada when purchasing property in Las Vegas?

Thanks in advance for any direction or advice you can give.

Regards,

Ian

[Katie L.]

@Ian Tan

Nevada is usually one of the more sought after states due to sometimes higher protections for owners. Most people who set up an NV LLC aren't even located in NV or have their property in NV. Being that your property will be in NV, then it might make sense to set up a NV LLC. However, since you are a CA resident, your LLC will still be "doing business" in CA. You will have to file as a foreign LLC in CA and pay the $800 minimum tax. If you end up creating your LLC in California (likely a valid options as well), then you will need to register as a foreign LLC in Nevada. Nevada I believe is one of the states that has no income tax, but you may want to check to be sure you will not be subject to tax on the rental income earned in Nevada and have to file a NV tax return.

*The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.  This post does not create an attorney-client nor a CPA-client relationship.