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California Individual vs. California Limited Liability

MGC94
Level 5

My client normally files from NJ. 

They have a sch C LLC. 

They moved from NJ to CA. 

Which state do I do or both? California Individual vs. California Limited Liability. I am not proficient in CA. Any insight would be helpful   

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12 Comments 12
sjrcpa
Level 15

Part year CA and part year NJ.

CA has a special LLC tax and form. This is in addition to the normal Schedule C reporting.

If the LLC was formed in NJ there is probably a continuing legal filing in NJ to keep the LLC alive.

After the move to CA, where was the work being performed and where were the LLC's customers? NJ may still want some nonresident income tax.


Ex-AllStar
abctax55
Level 15

California's form for an LLC is F.568.

If the entity wasn't 'formed' in CA, the great state of CA might not want the F.568 or the $ 800, or the LLC fee that's based on gross receipts.  Or, it might (given the inherent greediness of CA).  And CA does have 'wording' about doing business in CA, even if an entity hasn't registered or received a SOS number.

Spidell (caltax.com) is a great source for CA information.

"Tax software is no substitute for a professional tax preparer"
sjrcpa
Level 15

@MGC94  Anna (abc) is in California so she does a lot more of these than I do. Listen to her.


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abctax55
Level 15

"I'm not an attorney, and I didn't stay at a Holiday Inn last night"....

As an LLC provides legal protection of assets (supposedly), I would also wonder if an LLC registered in NJ, but now moved to CA and doing business there (right?) needs to think about said protection.

(paging @BobKamman

"Tax software is no substitute for a professional tax preparer"
MGC94
Level 5

So, they had an attorney form the LLC in CA. No work done in NJ. 

They moved on 1/2/2023 so not even really NJ residents for last tax year. 

Do I do California limited liability only? 

 

 

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BobKamman
Level 15

The first piece of information needed here is what kind of business the Lemmings Leeping Cliffs is conducting, and where.  My guess is that the taxpayers attended a seminar and put their Garden State rental into an LLC based on advice from someone who stayed at a Holiday Inn that night.  But it could be anything.  And do Californians with an out-of-state LLC have to pay that annual fee to the state anyway? Or only if there is a California business involved?  

BobKamman_0-1707761213661.jpg

 

sjrcpa
Level 15

"they had an attorney form the LLC in CA"

What is the formation date of the California LLC?

 

FYI - setting forth all of the details in the original post is helpful.


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sjrcpa
Level 15

"do Californians with an out-of-state LLC have to pay that annual fee to the state anyway? Or only if there is a California business involved? "

Yes if the LLC is "doing business in California" CA has a broad definition.


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BobKamman
Level 15

So if I'm managing my apartment building in Atlantic City from my home office in Newport Beach, is that considered doing business in California?

abctax55
Level 15

"....Yes if the LLC is "doing business in California" CA has a broad definition."

And very 'un-defined'.

Now that *we* know it was registered in CA - I can guarantee CA will be looking for F.568, and the $ 800.   Fighting that presumption by CA that they are entitled to the $ 800 would cost way more than the $ 800.  Especially since the 'owner' now has a CA address.

"Tax software is no substitute for a professional tax preparer"
sjrcpa
Level 15

@BobKamman Yes


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MGC94
Level 5

Do they also do the CA Individual? 

 

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