How does IRC 882 tax a foreign corporation's effectively connected income differently from IRC 881?
I own a foreign corporation registered in Hong Kong that operates a retail business through a physical store in California. My tax preparer says the store income is 'effectively connected income' taxed under IRC 882, not IRC 881. She said this is actually better for me because I can take deductions. Can you explain the difference between IRC 882 and 881, and how my business income from the California store is taxed?
Related Questions
What is IRC 881 and when does the 30% withholding tax apply to foreign corporations with U.S. income?
My LLC elected to be taxed as a corporation using Form 8832. I'm the sole owner and I live in Singapore. My tax advisor mentioned IRC 881 and said there could be a 30% withholding tax on certain types...
What is GILTI and how does it affect U.S. shareholders of foreign corporations?
I keep hearing about GILTI in the context of international tax reform. I'm a U.S. person who owns a foreign company, and someone told me I might owe tax on income my foreign company earns even if I ne...
What exactly is 'effectively connected income' under IRC 864(c)? How do I know if my LLC income qualifies?
I'm a Brazilian business owner with a Florida LLC that sells digital products online. Some sales go to U.S. customers, some to international customers. My CPA says I need to figure out what income is ...
What does 'trade or business within the United States' mean under IRC 864(b)? My tax advisor says this determines everything.
I'm an Australian freelance developer with a Wyoming LLC. I do all my work remotely from Melbourne but have U.S. clients who pay my LLC. My tax advisor says whether I'm engaged in a 'trade or business...
My CPA said IRC 871 governs how I'm taxed as a nonresident alien — what does this section actually cover?
I'm a Japanese citizen running an online marketing agency through a U.S. LLC. I live in Tokyo and have never set foot in the U.S. My CPA said Section 871 of the IRC is the main section that determines...
What is Subpart F income and how does it apply to foreign-owned business structures?
I've been reading about Subpart F income in the context of CFC rules and I'm confused about how it fits in with GILTI. I'm a U.S. citizen running a business through a foreign corporation. Some of the ...
Does BEAT apply to my foreign-owned U.S. corporation that pays royalties to its parent?
I'm the tax director of a U.S. corporation wholly owned by a Japanese parent company. We pay substantial royalties and management fees to our parent — about $80 million per year. Our total deductions ...
Does the branch profits tax apply to a foreign-owned U.S. LLC treated as a disregarded entity?
I'm a non-U.S. individual operating a consulting business through a U.S. single-member LLC. I understand the LLC is a disregarded entity for tax purposes. Does the branch profits tax apply to me? I th...
What is the branch profits tax under IRC 884 and how does it apply to foreign corporations?
I'm a foreign corporation doing business in the U.S. through a branch (not a subsidiary). My U.S. tax advisor mentioned something called the 'branch profits tax' in addition to regular corporate incom...
My 1040-NR has ECI from U.S. consulting through an LLC. Can I actually claim QBI as a nonresident?
I am from Singapore and file Form 1040-NR because I am still a nonresident for U.S. tax purposes. My foreign-owned LLC had about $118,000 of income that my preparer says is effectively connected with ...
Have a similar question?
ForeignLLCTax members get expert answers with IRS citations. One CPA consultation costs $200+. Full access is $9.99/month.
Become a Member — $9.99/moDisclaimer: All content on ForeignLLCTax.com is created by a tax professional and is provided for general educational and informational purposes only. It does not constitute tax, legal, or accounting advice, and should not be relied upon as such. Every tax situation is different — for advice specific to your circumstances, please consult a licensed CPA, Enrolled Agent, or tax attorney. By using this website, purchasing a subscription, or accessing any tools or services, you acknowledge that no client-professional relationship is established between you and ForeignLLCTax.com or its operators. This website is not affiliated with the IRS.
