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Updated over 3 years ago on .

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Correct address when filing for tax ID with out of state property

Posted

Many people create passive income through rentals in states outside of where they live. They create LLCs in the state where the property is located while maintaining an office at their home in a different state. If this were the case, when creating a tax ID for an LLC would you list the physical address of the business as your home office / mailing address even though the property was located in another state, or would you create the ID at the address of say the registered agent for the LLC in the state where the property is located?

When generating the tax ID from the IRS website the form has a separate area for mailing address... but for passive income for say rentals...if you don't office in that state, it is not always easy to have an associated physical address in another state.  Assuming the income generated flows to your schedule E and gets sorted out in the end it may not matter.  But at the same time, I have realized when you trigger an address by filing something it usually sends up a flag to the local tax commissions or authorities for the address listed which will sometimes trigger more back and forth explanations where everyone is looking for their share of any income produced.  

Here is my understanding and I am not giving tax advice but asking questions. Assume the state where the income is produced should get any state tax. Additionally assumption is the state where the income is generated may trigger a tax return for the LLC or other entity in that state. No problem with that. Just asking in the interest of avoiding false signals to your local tax commission, should the physical address be the home office or in the state where the activity is generating the income.

What have others done?