I was reading this link and they suggest not to use a Nevada LLC if you’re in CA.

My mom’s attorney who she hired for doing estate work said;

article is correct in some assumptions, but not in others. It is right that we will be filing a foreign filing with the state and will transact business in CA while the shopping center is still in existence. The reasons for the NV LLC is that we will ultimately liquidate the real estate, and it won’t affect yor brother in AK with the tax situation. You will pay the same amount of tax no matter what. There is no difference.

Any comments or opinions?



The article is correct. An LLC that does business in CA must register in CA and pay CA taxes. It doesn’t matter if it is formed in NV, OK, DE, or any other state. It is still subject to CA law and pays CA taxes. CA law applies whenever there is a dispute between the LLC and a CA company or person. The organizing state’s laws only apply to disputes among LLC members.

There is no reason to organize in one state and conduct all the business in another state. You will pay registration fees in both states. The only reason to have an LLC in one state and organized in another is if the LLC does business in several states.

I would add to BLL comments that Calif is extremely aggressive about collecting “their share” of taxes due.

Looking to hear comments re:
“. . . . the reasons for the NV LLC is that we will ultimately liquidate the real estate. . .”

If my Mom is not sure if she wants to sell the Strip Center which is one of her primary source of income (and doing well CAP wise) or do a TIC/1031 Exch. does it make sense to follow her tax & estate attorney’s advice with the NV LLC? The Atty. seems adamant about the tax saving for doing this for while in operation and after liquidation, but hasn’t given any detail.


NV laws don’t apply to CA. CA will gets it’s income and capital gains taxes for CA property whether the LLC is a NV LLC registered in CA or CA LLC. Exactly how does this attorney say there is a tax saving? I must be missing something.

I believe taxes will be avoided through by setting up a SCIN inside the LLC and then its suppose to be able to transfer without taxes.

Those are very advanced topics and they need to be set up perfectly in order to get the benefit. Make sure the attorney explains the whys and hows so that you understand it and are comfortable with it.

my experience is that if the property is in CA, you will be taxed.

I can’t think of any entity structure that would avoid this.

I agree with Mark and BLL