Real Tax Questions, Expert Answers
Get answers to your foreign-owned LLC tax questions from ForeignLLCTax. Every answer includes IRS source citations and step-by-step guidance.
My LLC sale includes an earnout based on future revenue — is that still capital gain from abroad?
I'm selling my US LLC (it owns a software product and the brand). The deal is a fixed payment at closing plus an earnout: a percentage of the product's revenue for the next three years. I assumed the ...
I picked an AFR rate for my owner loan — but could the IRS still say it's really equity, and does section 163(j) limit my interest deduction?
I set my owner-loan interest inside the AFR safe-haven, so I assumed the interest question was settled. Then I read that even with a good rate the IRS can recharacterize the 'loan' as equity, and that...
I fund my factory's tooling and packaging — does that increase my customs value (assists)?
I buy private-label goods from my own foreign factory. I also pay for the molds, the custom packaging design, and some artwork the factory uses to make my product. On the customs entry we only declare...
Should I file a protective Form 1120-F if a treaty means $0 US tax?
My foreign corporation has very limited US activity, and I'm fairly confident a treaty means we owe $0 US tax (no permanent establishment). Filing a full 1120-F sounds like a lot of work for a zero re...
After Bittner, is the non-willful FBAR penalty per account or per year?
I had several foreign accounts and missed a few years of FBARs. I've read scary things about $10,000 per account adding up fast. Did the Bittner Supreme Court case change that for non-willful cases, a...
I don't have a US tax number yet and I'm selling — does FIRPTA filing just stop?
Foreign seller here, closing soon, and I've never had a US tax ID. The title company says they still have to send the FIRPTA money to the IRS, but without my number I'm worried the paperwork can't be ...
How does FBA compare with dropshipping and merchant-fulfilled for US tax risk?
I'm choosing a fulfillment model for my foreign-owned US LLC and I want to understand the tax-risk trade-offs before I commit. How do Amazon FBA, dropshipping from abroad, and merchant-fulfilled selli...
After I withhold, when do I actually have to deposit the tax, and when are Form 1042 and 1042-S due?
Say my LLC withholds tax on a payment to a foreign payee. What is the timeline after that? Do I send the money to the IRS immediately, monthly, or just once a year with the return? And when are Form 1...
What Social Security and Medicare amounts do I withhold and match for 2026 wages?
I'm an Indian founder and my US LLC just hired an engineer at 95,000 dollars a year, with a chance her total comp crosses 200,000 with bonuses. The payroll provider obviously does the math, but I sign...
Real-estate-heavy partnership LLC: buyer's counsel says FIRPTA and 1446(f) both apply — do we stack 15% plus 10%?
I'm a foreign member selling my interest in a US LLC taxed as a partnership. Most of its value is a commercial building. The buyer's lawyer flagged that a FIRPTA rule for partnership interests AND the...
Where are my LLC's crypto gains sourced — and what is the US office trap I keep hearing about?
Following up on the trade-or-business debate: assume the safe-harbor question for spot crypto never gets resolved. As a nonresident owner of a disregarded US LLC, are my crypto gains US-source or fore...
My mother sent $75,000 and my aunt $40,000 in the same year — each under $100,000, so no Form 3520, right?
I became a US resident last year. This year my mother (not a US person) wired me $75,000 and her sister added another $40,000, both to help me settle in and fund my company. Neither transfer crosses t...
Foreign-corp blocker vs single-member LLC for doing exchanges — which structure is better?
I'm deciding how to hold US rental real estate that I plan to exchange over time. Some people use a foreign corporation 'blocker', others just a single-member US LLC. How do the two compare for doing ...
I'm Canadian (or UK / French / German) — does a treaty lower the US estate tax on my US assets?
I'm a Canadian citizen with a US brokerage account and some US shares. I've heard there are estate-tax treaties that give nonresidents a bigger credit than the default $13,000. Does the Canada treaty ...
I couldn't use all my foreign tax credit this year — can I carry it forward?
My foreign tax was higher than the Form 1116 limitation allowed, so part of my credit went unused. Is that lost, or can I carry it to another year? And how long do I have to use it?
I have one isolated short project in a state — does a single job force me to register?
My out-of-state LLC landed one short consulting project that requires me to do a bit of work in another state for a few weeks, then I'm done there with no plans to return. It's a true one-off, not a r...
My LLC's books are in euros — how do I reconcile that with a US-dollar Form 5472, and what are sections 985-988 about?
My single-member LLC bills clients in euros and my accounting software is denominated in euros. Form 5472 obviously wants US dollars. Can I even keep my books in a foreign currency? How do I bridge to...
My LLC is disregarded — does the W-8BEN-E go in the LLC's name or mine as the foreign owner?
I have a US single-member LLC that's disregarded for tax, and I'm the foreign owner. A platform wants a W-8BEN-E. Do I put the LLC as the beneficial owner because the LLC has the EIN and gets paid, or...
I elected corporate status two years ago and regret it — can I change my LLC's classification back?
About two years ago my US LLC filed Form 8832 to be taxed as a corporation. It hasn't worked out and I want to go back to pass-through. Can I just file a new Form 8832, or is there a waiting period? W...
I'm selling shares of a US company, not real estate — can FIRPTA still hit me?
I'm a foreign investor selling my stock in a US C-corporation. No deed, no closing on a building — just a stock transfer. The buyer's counsel raised FIRPTA and wants some kind of certification from th...
I missed Form 5472 for my foreign-owned LLC for years — can Streamlined fix that too?
My single-member US LLC is owned by me, a non-resident. I never filed Form 5472 with the pro forma 1120. I'm also behind on FBARs. Can I bundle the missing 5472s into a Streamlined submission, or is t...
When does FBA push me from just filing 5472 into having to file a 1040-NR or 1120-F?
Right now my foreign-owned US LLC files only Form 5472 with the pro forma 1120 each year. At what point does Amazon FBA actually push me into also filing a Form 1040-NR (I'm an individual owner) or a ...
Which W-8 form do I collect from each kind of foreign payee — BEN, BEN-E, ECI, or IMY?
Before I pay my various foreign payees I know I'm supposed to get a W-8 on file, but there are several versions and I can't tell which goes with which payee. I have a foreign individual, a foreign com...
A CP2000 reported income that isn't mine — it was issued to the wrong TIN. How do I fix it?
I got a CP2000 for income I never received. It looks like a payer issued a 1099 to my ITIN by mistake — the money actually went to a different person/entity. How do I tell the IRS this income isn't mi...
Do I need a customs broker, and if I use one am I still liable for mistakes?
Everyone tells me to hire a customs broker to handle my entries. Do I legally have to use one? And if the broker classifies my product wrong or undervalues it, is that on the broker or on me? I'd feel...
My only contact with California is a business bank account — am I safe from foreign qualification?
I opened a US business bank account that happens to be with a California-based bank, and that's literally my only California connection. No customers there to speak of, no office, no inventory, no emp...
I got an IRS penalty notice on my LLC — is it a CP15 or a CP215, and how do I respond?
My foreign-owned LLC just got an IRS notice assessing a penalty tied to Form 5472. A forum post called it a CP15, but my notice header looks different. Does the notice type actually matter, and what i...
Does the FIRPTA buyer really withhold 15% of the whole price at the first payment?
I'm selling US real estate to a US buyer on installments. My buyer's attorney says they have to withhold 15% of the entire sale price out of the first payment, but my down payment is small and that wi...
How do the $25,000 + $25,000-per-30-day section 6038A penalties for failing to keep records actually work?
I understand the famous $25,000 Form 5472 penalty, but I'm fuzzy on how it stacks when the problem is recordkeeping rather than a missed form, and how the extra per-period penalty kicks in. Is failing...
My foreign-owned US LLC missed FBARs — who is even supposed to file, me or the LLC?
I'm a non-resident and my single-member US LLC opened a business account abroad that went over $10,000. We never filed FBARs. I'm confused about who the filer is — the LLC, me personally, or both? I'm...
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