Ouch! I think we'll stick with the management company as a C
corp.

Linda

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Katie" <katiej_1958[at]yahoo.com> wrote:

- quote -

Thanks. I didn't know that.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Stuart A. Bronstein wrote:
- quote -

And the appreciation in value of the real estate will
accumulate in a C corporation, with the attendant double
taxation difficulties on its ultimate disposition.

However, an LLC that elects to be taxed as a corporation is
not subject to the California LLC fee.

Katie in San Diego

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

<< General Disclaimer: > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It cannot be used by any taxpayer for the purpose of > << avoiding penalties that may be imposed on the taxpayer. > << ================================================== ===== >
"DORFMONT[at]aol.com" <DORFMONT[at]aol.com> wrote:

- quote -

Yes. But I think they'll still pay the additional LLC gross
receipts tax.

But if it's taxed as a corporation, it is for all purposes.
So they can't get personal use of depreciation of the real
estate - it goes to the entity.

Stu

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"California conforms to the federal "check-the-box" rules,
so the numer of corporate characteristics from the old 7701
regs is not relevant. As long as the LLC has not elected C
corporation status, it is taxed as a flowthrough entity for
California purposes as well as federal."

Does this mean that my clients who have rental properties in
LLCs could elect to have the LLC taxed as a C Corp and take
the usual employee benefits from the entity without forming
a separate C corp to act as a management company?

We would like to provide medical insurance and other
benefits out of the management fees paid to the
owner/managers from the rental properties held in LLCs.

Now I assume that the taxpayers would have to form a C Corp
to manage the properties and provide benefits. If this
separate entity could be avoided and the LLC used directly,
they would save another $800 franchise fee as well as my fee
for preparing another return.

Linda Dorfmont E.A. CFP, CSA

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streetfilm[at]charter.net wrote:

- quote -

California conforms to the federal "check-the-box" rules, so
the numer of corporate characteristics from the old 7701
regs is not relevant. As long as the LLC has not elected C
corporation status, it is taxed as a flowthrough entity for
California purposes as well as federal.

Changing to manager-managed form will not have any tax
consequences.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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My dad and I have an LLC in California. We are bringing in
an investor and want to convert our LLC to a Manager-managed
LLC so I may be the sole manager. Any problems doing this
in California? We understand that our Operating Agreement
will have to be amended to reflect this change, but anything
else? Does California still have the "lacking two"
requirements for pass-through taxation qualification? I ask
because we do not have an end date for the business. Thank
you.

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