The states in which your rental properties are located have jurisdiction over the income generated from such properties -- so your business may have income tax liability in these other states. Since it appears that you own the properties in your own name, then you may have to file personal income tax returns in such other states. This is a tricky situation because you may be subject to penalties and interest in such other states for failing to file a tax return with their state tax authority. I also note that your plan to use a C corp may be inefficient from a tax perspective as well and there are other alternative structures that you may want to consider.
With respect to California, consider filing amended returns to accurately reflect any income taxes paid to other states. Note that you may not be entitled to a refund of California income taxes for the earliest years since you would be filing an amended tax return for a tax year that is 4 to 5 years old (there are statutes of limitations that may apply to your situation that would prevent the state from paying/crediting you a tax refund). This is not a DIY situation. Consider hiring an attorney to guide you through the process to appropriately structure your real estate investments.
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Oscar Javier Ornelas
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I agree with my colleague .
There are many issues that need to be consider and evaluate by an attorney that assist you in order not to be liable for tax evasion or even fraud by the tax authorities of different states.
You need a lawyer that is a Fraud Examiner and can assist you to protect yourself from potential state tax fraud.Some of spas in avvo are fraud examiners that can assist with those issues
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