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Where should I register my new LLCs
I'm starting my real estate investing journey and I live in CT (a very tenant friendly state). I intend to create two LLCs, one taxed as an S-Corp for my active investing and the other for my buy and hold properties. I'm currently house-hacking a 3-family that I plan to quitclaim over to my new LLC.
I've read and have been told it would be more advantageous to register my LLCs out of Nevada for better protections as a landlord. Has anyone had experience with this and is it the better way to go? What are the tax implications of doing so?
Thank you for your input! I want to make sure my foundation is strong and I do it right the first time.
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Yes Nevada does not have an individual income tax but if you don't have any payroll, sales or property within the state, it actually won't help you from a tax standpoint.
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The protections you will get as a landlord are afforded by the state you are doing business in, not the state where you are LLC'd in. If you got to court in CT a judge isn't going to care that your LLC is established in Nevada, they are going to follow and rule based on Connecticut law @Seth Bronko.
More often than not, the idea of setting up a LLC in a different state is more headache than it is worth (just my opinion).
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@Filipe Pereira thank you for the insight!