Legal Question in Real Estate Law in California

I am a california resident who is about to convey title of his properties, (held in my own name), to each separate wyoming llc. Let's say for the sake of discussion, none of my property are rented. Do i need to qualify them in california regardless? What I decide to rent some or all of my properties which now become rental properties, would I need to qualify my wyoming llc in california. Does my residency in california makes a difference or not? Does transfering one's tile from their personal name to an llc (wyoming), does such event constitute a reason to be treated a business and therefore be subject to the qualification requirement and to the california franchise tax board?


Asked on 12/19/10, 2:01 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Renting a property in California is carrying on a business activity, and even if you lived in Cheyenne the Wyoming LLC would be subject to California's registration and franchise-tax requirements. If you are wealthy enough to own multiple rentable properties, you can afford to get competent legal and tax advice, which I think will include debunking of whatever gave you the idea of forming multiple out-of-state entities. Also, if you have loans on thes properties, make sure the lender(s) give you written approval to transfer ownership from yourself to any other person or entity; this is customarily an act of default or triggers a due on sale clause.

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Answered on 12/27/10, 11:22 am


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