Question on LLC with partners out of state

[Mark Hill]

Hello,

I recently formed an LLC (in CA) for my rental property investments (just closed on my 1st one). However, I am also going to be partnering with a friend in Colorado. We are planning to form a separate LLC for our partnership deals, but my question is since I since I live in CA, will I still be responsible for the $800 franchise tax fee? How does these out of state partnerships/LLC's get handled at tax time?

Thanks in advance for any comments. 

Mark

[Bill S.]

@Mark Hill "like family" doesn't really mean much. Sorry but is your friendship worth the money. Far too many stories of friendships ending over real estate deals. At a bare minimum, every little detail should be spelled out and memorialized in a document and signed by both parties. People have poor memory so the likelihood of remembering things the same is slim. Having similar values is helpful but why not write them down ahead of time. Spend lots of time getting things in writing and be absolutely sure the agreement addresses how to undo the agreement. Circumstances change, a kid gets sick or heads off to a fancy private school. Figure out every detail you can think of ask lots of people what is missing, read lots of forum posts about partnerships and make sure incorporate what you learn. It may well save your friendship. Wouldn't you take the time to write things down if you didn't know them? What does knowing them "like family" eliminate from the equation.