22/05/2024

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Page 23This article explains the federal and California tax consequences of use of an LLC by a tax-exempt entity to hold belongings or keep it up an activity. The federal revenue tax implications and most of the California franchise and revenue tax implications of operating an LLC are relatively well known. Such an LLC may also be exempt from California property tax if all its members are exempt underneath Internal Revenue Code § 501 or California Revenue and Taxation Code § 23701d and satisfy the necessities of the welfare exemption. The LLC, nonetheless, might be obligated to pay particular California $800 annual franchise taxes and California annual fees unless it’s a qualifying title-holding entity that’s exempt underneath both Cal. Patrick Whaley is a Partner at Musick, Peeler & Garrett LLP in Los Angeles, whose apply is primarily focused on nonprofit, tax-exempt organizations. Historically, chapter judges have had the restricted powers …