Cross state investing

[Jimmy H.]

Looking to potentially invest in other states for commercial REI. I was wondering about the proper entity structure and potential tax or other implications of doing so. Is this a situation where I could incorporate as a Delaware LLC or something, or should I keep the LLC filed in my home state, or file one in each state in which I plan to invest. What other considerations am I overlooking?

Or for example, if I plan to seek financing from a local bank in the area of investment as opposed to seeking financing in my home state, with this affect deal structure. I would assume it would be easier to get financing in the state in which I will be investing, and if I am incorporated in my home state what complications might this cause?

[Account Closed]

Investing in other states means that you may have various taxes and income to report to that state. Physical presence will mean you are subject to any sales tax, property tax, income tax or other excise taxes of that particular state as well as reporting the income and expenses to your state.

Forming an LLC can be done anywhere, but there are some advantages to having it formed in the state where the property is.

You may find it difficult to file a suit in the state the property is located as foreign company unless you are reporting taxes properly. If the LLC was formed in the state it is not foreign and your rights are the same as any other domestic business. Including the right to pay taxes.