LLC with rental out of state questions

[Bill Schrader]

Hi BP community. I am a newer member and this is my first post. I have a couple questions and hope someone can point me in the right direction. I have one property in NC that I finished renting to my first tenant and in the process of getting it ready to rent out again. I would like to have the property under a LLC to protect my personal assets. My primary residence is in PA.

Which state should I register the LLC with? Is there any differences?

If my wife and i are on the LLC, does this mean we have to do two tax returns? What is the tax implications and process?

Thanks in advanced!

[Eddie Brady]

Hey Bill. Personally, I created an LLC-S in the state I plan on investing it for a while. It's simpler that way. The reason is that if you were to create an LLC in PA, for example, you will still have to register that LLC in NC to do business there.

There are many differences between states when it comes to LLCs. Some are cheaper to form them, some more complicated, and some allow you to create Series LLCs which are beneficial as well. NC and PA do not allow Series LLCs. I'm not an attorney or CPA, but I recommend looking at forming it in the state you invest in as well. 

As for you and your wife being members of the LLC in partnership, you may want to discuss whether that is the best option for you after reading this: http://www.21stlawoffice.com/business-articles/married-with-llcs-when-one-or-both-spouses-are-llc-members/