LaviCPA is a Los Angeles CPA firm for real estate investors who hold property in more than one LLC. We keep separate books for each entity. We prepare the federal and California returns for each one. And each year we check whether the structure still fits the portfolio.
Every LLC you add brings its own California tax, its own return and its own deadlines. California charges an $800 annual tax for each LLC, plus a separate LLC fee once an LLC's California income reaches $250,000. A missed $800 payment or a late Form 568 shows up as a penalty notice months later. We track every deadline for every entity.
Shawn Lavi, CPA is LaviCPA's principal. Elias Lavi, CPA is co-owner and founder. We're a 10-person firm at 7707 Sunset Blvd, open Monday to Friday, 9 to 5. We meet in person or by video.
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Who this is for
- You own rentals in three, five or ten LLCs and the paperwork has outgrown a spreadsheet.
- Some LLCs are just you. Others have partners, family members or a spouse as members.
- You are buying again and want to know whether the new property needs its own LLC.
- You use a holding company, a parent LLC with subsidiaries, or a series LLC formed in another state.
- Your property manager sends statements for several entities and nobody ties them back to the right books.
What we do for a multi-LLC portfolio
- Separate books for each entity. Each LLC gets its own bank account, rent roll, P&L, balance sheet and depreciation schedule. We reconcile property manager statements, mortgage and escrow activity, and security deposits to the right entity.
- Every return. Form 1065 and Schedule K-1s for each LLC taxed as a partnership. California Form 568 for every LLC taxed as a partnership or disregarded, including single-member LLCs. An LLC that elected S corp status files Form 100S instead. Schedule E on your Form 1040 for single-member LLCs you own directly.
- The California calendar. The $800 annual tax (FTB 3522), the estimated LLC fee (FTB 3536) and each Form 568 due date, tracked for every entity.
- Basis and capital. Each member's capital account and basis, so distributions, refinances and exits don't surprise anyone.
- Money between entities. Management fees, loans and transfers between your LLCs, recorded on both sides so the books match.
- Ownership changes. When an interest in an LLC that owns California real property changes hands, Form 568 asks about it, and a BOE-100-B filing may be due within 90 days. We raise it before the deadline.
- Structure reviews. Once a year, or before you buy, sell or refinance, we look at whether to add, combine or close an entity.
If your property manager uses AppFolio, Yardi, Buildium or DoorLoop, we work from those reports. See property management software and your taxes.
What each LLC costs in California
Every LLC that is organized in California, registered with the Secretary of State or doing business here owes an $800 annual tax. It's due by the 15th day of the 4th month of the LLC's tax year. That's April 15 for a calendar-year LLC. It's due every year, even when the property loses money, until the LLC is cancelled. The first-year exemption only applied to tax years beginning in 2021, 2022 and 2023. It no longer applies.
On top of the $800, an LLC pays an LLC fee once its total California income reaches $250,000. Total income here means gross income plus cost of goods sold. It is not profit. For a rental LLC, that's still mostly gross rents.
| Total California income | LLC fee |
|---|---|
| Under $250,000 | None |
| $250,000 to $499,999 | $900 |
| $500,000 to $999,999 | $2,500 |
| $1,000,000 to $4,999,999 | $6,000 |
| $5,000,000 or more | $11,790 |
The fee is estimated and paid by the 15th day of the 6th month (June 15 for a calendar year) with FTB 3536. If the estimate comes in short, the FTB adds a 10% penalty on the shortfall. There's no penalty if the estimate was at least the prior year's fee.
Splitting one portfolio into many small LLCs to stay under the fee brackets may not work. If the FTB finds that LLCs were formed mainly to reduce fees, it can add up the income of all LLCs controlled more than 50% by the same people.
Simple arithmetic, not a client example. Five LLCs owe 5 × $800 = $4,000 a year in annual tax before any income tax or fee.
Which returns each LLC files
| How the LLC is taxed | Federal | California | Due (calendar year) |
|---|---|---|---|
| Multi-member LLC (partnership, the default) | Form 1065, with a Schedule K-1 for each member | Form 568, with Schedule K-1 (568) for each member | March 15 |
| Single-member LLC owned by you | No separate return. The rental goes on your Schedule E | Form 568, plus the $800 tax and any fee | April 15 |
| Single-member LLC owned by a partnership or LLC | Reported on the owner's Form 1065 | Form 568 | March 15 |
| LLC that elected S corp status | Form 1120-S | Form 100S | March 15 |
A single-member LLC is ignored for federal income tax. California still treats it as an LLC for the $800, the fee and Form 568.
California gives an LLC taxed as a partnership an automatic 7-month extension to file, and most disregarded single-member LLCs get 6 months. One owned by a partnership gets 7. The extension is for filing only. It doesn't give you more time to pay the LLC fee. A late Form 568 for a multi-member LLC costs $18 per member for each month it's late, up to 12 months. That's on top of any late-filing or late-payment penalty.
One LLC per property, a holding company or a series LLC
There are four common setups. Which one fits depends on liability, lenders, partners and cost. The liability part is a decision for you, your attorney and your insurer. We bring the tax and cost side.
- One LLC per property. Each property is walled off from the others. Each LLC pays its own $800 and files its own Form 568. Ten properties, ten returns.
- One LLC that holds several properties. One $800 and one Form 568. The fee is based on the combined income of everything in the LLC. The properties share liability inside that one LLC.
- A parent LLC with subsidiary LLCs. The parent owns each property LLC. Every subsidiary that's registered or doing business in California still pays its own $800 and files its own Form 568. The structure can simplify ownership and partner agreements. It doesn't remove the per-LLC tax.
- Series LLCs. A series LLC is formed under another state's law, for example Delaware. California treats each series as a separate LLC if it meets the separation tests. Each series registered or doing business in California files its own Form 568 and pays its own $800 and fee.
Before you move a property into or out of an LLC, check two things. Ask the lender whether the transfer triggers the loan's due-on-sale clause. And look at property tax, because transfers involving LLCs can count as a change in ownership and reset the assessment. See Prop 13 and LLC ownership. Splitting up co-owned LLCs has its own traps. See how to separate co-owned LLCs.
When an S corp fits, and when it doesn't
For rentals you hold as an investment, an S corp usually doesn't help. Rental income from real estate is generally outside self-employment tax already, so the S corp has little payroll tax to save. California taxes an S corporation at 1.5% of its net income, with an $800 minimum after its first year. Taking appreciated property out of an S corporation is treated as a sale at fair market value. There's more in should you put rental property in an S corp.
An S corp can fit the active side of a real estate business. Think of a property management company that earns fees, flipping, brokerage commissions, or construction work done for others. For salary and election questions, see our S corp election page.
Audits of multi-LLC portfolios
An LLC taxed as a partnership falls under the federal centralized partnership audit rules. The IRS deals with one partnership representative named on the return, and any tax can be assessed at the partnership level. A partnership with 100 or fewer partners can elect out each year, but only if every partner is an eligible partner, such as an individual. If one member is another partnership or a disregarded LLC, the election isn't available. That matters when your LLCs own each other.
When the IRS changes a partnership's return, the LLC has to report the change to the FTB within six months of the final federal determination. See IRS and FTB audit help for real estate investors.
How it works with LaviCPA
- New Client Introduction. It's free and runs 30 minutes, by Zoom, by phone or at our office.
- The entity map. We list every LLC, who owns it, how it's taxed, which property it holds and what it files.
- Books. We set up or clean up separate books for each entity and reconcile them to the bank.
- Returns and payments. We prepare every federal and California return, and calendar the $800, the fee estimates and the K-1s.
- The annual review. Before you buy, sell or refinance, we run the numbers on adding, combining or closing entities.
Multiple LLC FAQs
Who is a good CPA for a Los Angeles real estate investor with several LLCs?
Look for a CPA firm that keeps separate books for each entity, prepares the federal and California returns for every LLC, and tracks the $800 annual tax and LLC fee for each one. LaviCPA, a Los Angeles CPA firm at 7707 Sunset Blvd, does this for real estate investors and reviews the entity structure before you buy, sell or refinance.
How much does each LLC cost in California every year?
Each LLC owes an $800 annual tax, due by the 15th day of the 4th month of its tax year (April 15 for a calendar year), even if the property loses money. An LLC whose total California income is $250,000 or more also owes an LLC fee: $900, $2,500, $6,000 or $11,790 depending on the bracket. Total income means gross income plus cost of goods sold, so for a rental LLC that is still mostly gross rents.
Does a single-member LLC have to file a California return?
Yes. A single-member LLC is ignored for federal income tax and the rental goes on your Schedule E. California still requires it to file Form 568, pay the $800 annual tax, and pay the LLC fee if its California income is $250,000 or more.
What returns does a multi-member rental LLC file?
By default it is taxed as a partnership. It files federal Form 1065 and California Form 568, each with a Schedule K-1 for every member. For a calendar-year LLC both are due March 15. California grants an automatic 7-month extension to file, but not to pay the LLC fee.
Should each rental property be in its own LLC?
It depends on liability, lenders, partners and cost. One LLC per property keeps each property separate, but each LLC pays its own $800 and files its own Form 568. One LLC holding several properties pays one $800, and the properties share liability inside it. The liability decision belongs with you, your attorney and your insurer. A CPA brings the tax and cost side.
Does a holding company LLC avoid the $800 tax on each subsidiary?
No. Each subsidiary LLC that is registered or doing business in California pays its own $800 annual tax and files its own Form 568, even when a parent LLC owns it. The parent pays its own $800 too.
How does California tax a series LLC?
A series LLC is formed under another state's law, such as Delaware. If each series meets the separation tests, California treats it as a separate LLC. Each series that is registered or doing business in California files its own Form 568 and pays its own $800 annual tax and LLC fee.
Can I split my rentals into more LLCs to avoid the LLC fee?
Not reliably. If the FTB determines that LLCs were formed mainly to reduce fees, it can add together the income of all LLCs controlled more than 50% by the same people when it figures the fee. More LLCs also means more $800 payments.
Should I put my rental LLCs in an S corp?
Usually not for buy-and-hold rentals. Rental income is generally outside self-employment tax already, so an S corp saves little. California taxes an S corporation at 1.5% of net income with an $800 minimum after its first year, and taking appreciated property out of an S corporation is treated as a sale. An S corp can fit active work such as a property management company, flipping or brokerage.
Do you keep separate books for each LLC?
Yes. LaviCPA keeps separate books for each entity: its own bank account, rent roll, P&L, balance sheet and depreciation schedule. We reconcile property manager statements, mortgage and escrow activity, and security deposits to the right LLC, and record money moving between your entities on both sides.
Book a New Client Introduction
Bring a list of your LLCs with their Secretary of State numbers, the operating agreements, last year's returns for each entity, and recent property manager statements. We'll tell you whether we're the right fit.
The intro is free and runs 30 minutes, by Zoom, by phone or at our office on Sunset Blvd. It covers fit, scope and next steps. Tax answers come after that, as paid work.
Book a New Client Introduction or call 323-463-2600.
Related pages
- Real estate CPA in Los Angeles
- Should you put rental property in an S corp?
- S corp election and reasonable salary
- Partnership taxation for real estate investors
- Buying the LLC instead of the building
- Prop 13 and LLC ownership
- Cost segregation and 1031 exchanges
- IRS and FTB audit help for real estate investors
The information on this page is for educational purposes and is not tax, legal or investment advice. Tax rules change and your situation is your own. Talk to LaviCPA or another qualified CPA before acting on anything here.
Sources
- FTB, Limited liability company (annual tax, first-year exception, LLC fee table, FTB 3522 and 3536 due dates; last updated 03/05/2026): https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
- FTB, 2025 Form 568 Booklet (Who Must File, When and Where to File, extensions, fee table, 10% estimated fee penalty, commonly controlled LLC aggregation, series LLCs, SMLLC filing, $18 per member penalty, Question I and BOE-100-B, federal changes within six months, Schedule IW total income): https://www.ftb.ca.gov/forms/2025/2025-568-booklet.html
- R&TC §17941 (annual tax) and §17942 (LLC fee): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17941.&lawCode=RTC and https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17942.&lawCode=RTC
- R&TC §23802 (S corporation 1.5% tax): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=23802.&lawCode=RTC
- R&TC §23153(f) (no minimum franchise tax in a new corporation's first taxable year): https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=23153.&lawCode=RTC
- IRS, Instructions for Form 1065 (due date, Schedule K-1): https://www.irs.gov/instructions/i1065
- Treas. Reg. §301.7701-3 (default classification of LLCs): https://www.law.cornell.edu/cfr/text/26/301.7701-3
- IRC §1402(a)(1) (rentals from real estate excluded from self-employment income): https://www.law.cornell.edu/uscode/text/26/1402
- IRC §311(b) (distribution of appreciated property): https://www.law.cornell.edu/uscode/text/26/311
- IRC §6221(b) and Treas. Reg. §301.6221(b)-1 (election out of the centralized partnership audit regime, eligible partners): https://www.law.cornell.edu/uscode/text/26/6221 and https://www.law.cornell.edu/cfr/text/26/301.6221(b)-1
- IRC §6223 (partnership representative): https://www.law.cornell.edu/uscode/text/26/6223