IRA LLCs

If my home state is not Colorado, do I need to register the default Colorado LLC as a foreign entity in my home state?

You do not need to automatically register your LLC as a foreign entity unless you are running a business activity, such as renting and purchasing a property from a separate state. Further exceptions and descriptions below.

You do not always need to automatically register your LLC as a foreign LLC. For example:

Situation 1

A customer from Texas opens a Rocket Dollar account to invest in a limited partnership in Texas as a passive investor. Their Colorado LLC is opened.

This customer does NOT have to register their LLC as a foreign entity.

Situation 2

A customer from Texas opens a Rocket Dollar account to invest in a limited partnership in Arizona as a passive investor. Their Colorado LLC is opened.

This customer does NOT have to register their LLC as a foreign entity.

Situation 3

A customer from Texas opens a Rocket Dollar account to invest in a real estate property in Arizona. Their Colorado LLC is opened.

A: This customer does NOT have to register their LLC as a foreign entity as long as the property is not rented.

B: This customer should register their LLC as a foreign entity before they start renting it out to tenets. You can read more here. Most states have a grace period between 30-90 days as a registration deadline. It's best to complete this before or ASAP right after starting to intake rental income from a property.

C: For business purposes, the investor wants an Arizona LLC to represent the property, the investor opens up an Arizona LLC directly AFTER their Rocket Dollar IRA LLC is created. The Colorado LLC funds the Arizona LLC, and then Arizona LLC buys the property.

Situation 4

A customer from California buys a few private placements and real estate property but does not rent out the property.

This customer MUST register their Colorado LLC as a foreign entity in the state of California due to local regulations. It does not matter if the property is being rented or not. You can read more about a California Self-Directed IRA here.

 

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