Should Investments Made in To Syndications/Funds be held in LLCs

[Brandon Riahi]

Hello All, 

Most of our portfolio is in single family homes. We are trying to diversify and have been looking in to syndications and Red D funds. I believe the syndications would be standard multi family and industrial investments that provide a K-1. The Reg D fund is an unsecured fund where a turnkey provider is using funds to purchase more homes for investors. In this case there is no K-1 and instead there is just a 1099 issued at year end.

I wonder if we could trouble you all for a bit of knowledge:

1. Is there any liability risk associated with these and consequently should we go to the trouble of holding these investments in a or multiple LLCs?

2. If so do you have to have an LLC in the state where the syndicator resides.

3. If I live in Texas and invest in a California syndication to I have to file a California tax return?

Thanks in advance for your help - I apologize if these questions are rudimentary,