Setting up an LLC in CA

[Luis Torrico]

Hello,

I’m buying my first rental property in OH.

I set up an LLC in California but now I hear it's best if I set up the LLC in the state I'm buying my property.

Has anyone bought a property in another state being from CA, if so please share your experience.

Thank You

[Edward Liu]

If you live in CA, then simply set up LLC in CA and purchase out of state property using the LLC(s). For many non CA residents, it is better to set up Ohio LLC only.

CA tax code is different. Even if you use Ohio LLC, but given you live in CA (operate Ohio LLC from CA), you will be taxed CA Franchise tax on the Ohio LLC (plus whatever you pay for Ohio LLC). You can not avoid the CA franchise tax as long as you live in CA. For non CA residents, they only pay Ohio LLC money, nothing at their home state, thus better to set up LLC at property state.