SMLLC 568 filing

[user17617622314]

I live in CA, and have a CA SMLLC. I did some joint ventures with out of state investors on flipping homes in their states. My CA LLC provided some capital for the flips. Since I'm in CA and used my CA LLC, are the profits from these out of state joint ventures still considered sourced in CA? I'm not on the flipper's LLC, which are in the state they are flipping the homes. I assume I would get a 1099-NEC for any profits from the flipper's LLC. 

If these profits are considered sourced in CA, does this mean I do not have to file the out of state income taxes? 

Thanks,

[Mike9241]

you indicate you did joint ventures with other entities in flipping houses. Under the tax laws, it would seem that there was a partnership formed between your SMLLC and the other entity. This would require each venture to file a partnership return and issue your SMLLC a k-1 and a state k-1 if that state has an income tax. in other words based since it seems you shared in the profits of these ventures you will owe income taxes in these other states. 

on the other hand, if the funds advance to these ventures was in the nature of a loan, then the income would be interest income and not taxable in the other states. however, based on how you phrased your question, my opinion is that that the funds suppled was not in the nature of a loan. have you contacted these other venture s to see what they will do for income tax purposes, though what they do and what is proper from an income tax standpoint mat be different?