Posted by John CA on September 05, 2002 at 10:32:03:
>>>>First of all, can I have a NV corporation that
>>>>does business in CA, and what do I need to do to
>>>accomplish that?
I might be able to help here. I know for a fact you can’t “avoid” CA taxes if the property you bought was in CA, whether you are incorporated in NV or not. CA will still charge you the $800 and their state tax regardless to register as a “foreign corp”. In fact, if you had incorporated in CA to begin with you could have avoided the $800 franchise fee the first year (assuming you didn’t make enough to pay taxes).
BTW, the $800 is only a minimum. It IS part of the state tax (which is 8.89% of profits I think). So, technically, it really isn’t a “fee”.
C vs S Corp-& Taxes from flipping properties - Posted by Johnathan
Posted by Johnathan on September 01, 2002 at 09:04:55:
I (flip) property I have a Nevada S corp,I want to quit claim the title of the properties to my S corp to pay lower capital gains tax, Can you give me some advice on if I am going about this in the right manner, and would it be best to change my “S” corp to a “C” corp since the profits will flow through to me from my “S” corp, as oppposed to if I had a “C” corp. And what are the ramifications of changing the type of corporation I have.
Posted by JHyre in Ohio on September 02, 2002 at 08:43:33:
Putting properties into an S-corp will not change your capital gains or ordinary tax rates. Since you flip properties, you are in any event subject to ordinary rates. The S-corp can save you money on social security taxes. Whether you should use a C depends on a lot of personal facts…for example, your bracket, the number of C-corp specific perks you can use, the number of properties you will flip in the company, and when/if you personally need the profits…choice of entity is the most common question I get from clients. To answer it, I ask them to fill out a pretty detailed questionnaire, especially if C-corps are involved…this is not a question that should be answered “off the cuff”. Unless you live in NV, I question the utility of a NV entity for RE.
John, you said that you question the utility of a NV entity for doing RE if you don’t live in NV. Why is that? I thought that having a NV entity would save on state taxes in the state in which I live (CA). I guess it boils down to several questions:
First of all, can I have a NV corporation that does business in CA, and what do I need to do to accomplish that?
What would be the advantages of doing so vs. the disadvantages (i.e. why do you question the utility of it?)
Also, can you provide me information on your individualized consulting on entity structuring (fees, etc.)?
