Question

State tax help

Forum|Forum|4 years ago
March 3, 2022
1 reply
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I am an LP in a Delaware LLC that owns property in Nevada (no state income tax). This is through a crowdfunding site (RealtyMogul). The K-1 that I received has a physical address in California and included a CA K-1 state tax form. I am a nonresident of California living in Tennessee (also no state income tax). Do I have to file state income taxes for California? If so, can you please explain why?

My understanding is that the rental income is taxed in the state where the property resides (Nevada) or taxed in the owner state of residence (Tennessee). If I do have to pay CA state taxes, I would just say buyer beware about crowdfunding real estate.

S

Statetaxhelp77Author

BTW - After entering the K-1 information, Turbotax doesn't recommend filing a CA state return. It does for the other states that I have to do returns for.

DMarkM1

It does not appear that you have a business nexus in CA that would require filing in CA. The income is from a NV property so you are not doing business in CA. The crowdfunding company is a CA company and thus required to send the CA K1 to it's partners/shareholders so that they may determine, if they have to file CA state taxes.

Here is a CA reference. See the section on Partnerships, LLCs, and S-Corps.

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