CALIF LLC FEE & RENTAL PROPERTY SALE

Technical topics regarding tax preparation.
#1
cpalake  
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Location:
Arkansa & Calif
California LLC client sold a rental property for a million.
Is this million considered gross income for the LLC fee & it would owe $ 6,000?
 

#2
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WESTERN USA
California LLC client sold a rental property for a million.
Is this million considered gross income for the LLC fee & it would owe $ 6,000?


No, unless the LLC is considered a real estate dealer. If investor, then gross income would be the gain( sale less adjusted basis). See FTB Legal ruling 2016-01
 

#3
cpalake  
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Location:
Arkansa & Calif
Thank you.
Another client sold a rental for $ 2,450,000 less adjusted basis $ 594,684 = gain of $ 1,855,316.
The LLC is not a dealer. Is this gain considered gross income for the LLC fee?
 

#4
dave829  
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Here's a link to FTB Legal Ruling 2016-01:
https://www.ftb.ca.gov/tax-pros/law/leg ... 016-01.pdf
I believe that Situation 2 addresses your question.
 


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