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.
Should I just hold the property until death for the step-up, or does the NRA estate tax wreck that plan?
I keep exchanging into bigger US properties and deferring gain. Someone said if I just hold until I die, the deferred gain disappears because of a basis step-up, so why ever pay the tax? But I'm a non...
Does spot crypto trading for my LLC's own account count as a US trade or business?
I trade spot BTC, ETH, and a few other large tokens from my home country, for my single-member US LLC's own account, mostly through a US exchange. I have read about a safe harbor that protects foreign...
New US resident, just received a large distribution from my family's foreign trust — how is it reported and taxed?
In my first year as a US tax resident, my parents' foreign trust (they funded it, not me) distributed about $300,000 to me to help buy a home. I assumed this was just a family gift. A CPA friend said ...
My disregarded LLC's only asset is a US rental condo — if I sell the LLC, is that a real estate sale for tax?
I'm a nonresident and my single-member LLC holds one Florida rental condo and a small bank account. A buyer offered to purchase the LLC itself — the agent says that way 'it's a company sale, not a pro...
How often must a brand-new employer deposit payroll taxes, and what is the 100k next-day rule?
German founder with a US LLC that just started paying two US employees. The payroll provider set us up as a 'monthly depositor' and I don't understand where that label comes from — we pay wages every ...
What are the economic-nexus thresholds, and when exactly do I have to register?
I keep seeing '$100,000 or 200 transactions' for sales tax economic nexus. Is that the rule everywhere? My foreign-owned LLC's US sales are growing and I want to know the actual numbers and the moment...
What is the branch profits tax and will my foreign corporation owe it?
I keep seeing 'branch profits tax' mentioned for foreign corporations operating in the US. I run my US business directly through my foreign corporation (no US subsidiary). What is this tax, how is it ...
YouTube is taking 24% of my worldwide earnings — how do I stop the backup withholding?
Something is wrong: YouTube is withholding 24% on my entire global channel revenue, not just the US-viewer part. I'm a foreign creator with a foreign-owned US LLC. This feels like way too much. How do...
I'm selling my US property on owner financing — why does everyone say start the FIRPTA certificate early?
I'm a foreign seller and I'm taking back a note: small down payment now, the rest over several years. My CPA keeps urging me to file the FIRPTA certificate before closing, but if I'm only collecting a...
Can my foreign parent charge my US LLC a 'management fee' for oversight and governance — or is some of that not chargeable at all?
My overseas holding company wants to bill my US LLC a flat annual 'management fee' that covers, among other things, my own time overseeing the investment, parent-level governance, and some legal/regul...
Can FBA inventory create state income or franchise tax, or does Public Law 86-272 protect me?
I keep reading that Public Law 86-272 protects out-of-state sellers of physical goods from state income tax as long as they only solicit orders. I sell tangible products through Amazon FBA, so my inve...
Does electing C-corp on Form 8832 help or hurt my tax treaty benefits as a foreign owner?
I'm a foreign owner of a US LLC in a country with a US tax treaty. Someone suggested electing C-corp status to 'use the treaty.' Does becoming a corporation actually help my treaty position, or could ...
How is the 5% Streamlined (SDOP) penalty actually calculated?
I think I fall under SDOP. People keep saying '5% penalty' but 5% of what, exactly? Is it 5% of every year's balance added together, or 5% of the highest balance I ever had? I want to estimate the cos...
What is the difference between Chapter 3 and Chapter 4 withholding, and does a treaty claim cover both?
I keep seeing 'Chapter 3' and 'Chapter 4' on withholding forms and the 1042-S, and both seem to be 30%. My foreign payee gave me a W-8 claiming a treaty rate. Does that single treaty claim take care o...
EIN already in hand — what is the exact federal setup sequence for my LLC's first US hire?
I'm in Brazil and my single-member LLC has had an EIN since formation (we use it for the annual Form 5472). We're hiring our first US employee in about three weeks. Is there a separate IRS registratio...
US owner of a foreign grantor trust with zero transactions this year — do I still file Form 3520 and 3520-A?
After moving to the US, I'm treated as the owner of my foreign trust under the grantor rules. This year the trust did absolutely nothing — no contributions, no distributions, no asset sales. My foreig...
Selling my partnership-LLC interest at a loss — can I stop the buyer from withholding 10%?
I'm exiting a US partnership-taxed LLC and will actually realize a small loss on the sale. The buyer's attorney still wants to withhold 10% of the price 'to be safe' under section 1446(f). Tying up th...
I only trade through DeFi front-ends — does any of the 1099-DA reporting reach me in 2025 or 2026?
My LLC does all of its swaps through decentralized protocols using a front-end website and a self-custody wallet. No centralized exchange account at all. A friend claims DeFi platforms are now brokers...
If I can't produce my records in an IRS exam, can they really disallow my deductions and cost of goods sold?
I've always thought the worst case for a missing Form 5472 or bad records was the $25,000 penalty. But a friend said the IRS can actually throw out my deductions and even my cost of goods sold if I ca...
I bought a rental property in Florida through my out-of-state LLC — does that alone require foreign qualification?
My LLC is formed in Wyoming and I just bought a single-family rental house in Florida that I rent out for income. I don't have an office or employees in Florida — the only Florida connection is this i...
I don't have an SSN — how do I get the ITIN I need for Form 8288-B?
I'm filing Form 8288-B to reduce FIRPTA withholding on my exchange, but the form wants a US taxpayer ID for every party and I'm a nonresident with no SSN. How do I actually get a number in time? Can I...
Are import duties deductible right away, or do they go into inventory under section 263A?
I paid a lot of customs duties this year on inventory that's still mostly sitting in the Amazon warehouse unsold. Can I deduct all those duties now as an expense, or do they have to be capitalized int...
A foreign country withheld more than the treaty rate — can I credit the full amount?
A foreign payer withheld 25% on a royalty paid to me, but the tax treaty rate should have been 10%. I never claimed the treaty rate or asked for a refund. Can I just take a foreign tax credit for the ...
Does holding US property through an LLC protect me from estate tax?
I keep reading that a US LLC gives liability protection. If I move my US real estate into a single-member LLC, or into a multi-member LLC with a partner, does that take it out of the US estate-tax net...
Best state for a foreign-owned holding company: New Mexico or Wyoming?
I want to set up a passive holding LLC to hold equity in two of my operating businesses. I want the cheapest recurring cost while keeping privacy. New Mexico looks like the obvious pick at $50 to form...
Best state for a foreign-owned bootstrapped SaaS — Wyoming or Delaware?
I'm a non-resident planning to launch a B2B SaaS product. I'm bootstrapping — no investor plans, just product revenue. Should I form in Delaware to look professional to US customers, or in Wyoming for...
New Mexico LLC — when is the $20 triennial report actually due?
I keep reading that New Mexico LLCs have no annual report, then I read that they have a $20 triennial report under the revised act. I formed my New Mexico LLC in February 2024. When is my first report...
What is the section 6038A(e) 'authorization of agent' requirement and why is the 30-day deadline a trap?
Someone warned me that as a foreign owner of a US LLC, I might have to sign something making my LLC my 'agent' if the IRS examines us, and that there's a tight 30-day deadline. I don't fully understan...
Florida LLC annual report — what does the $400 late fee actually cost me if I miss May 1?
I formed a Florida LLC last year and my registered agent reminded me the annual report is due by May 1. I almost certainly cannot get it filed in time — I am abroad and the documents I need are still ...
Wyoming LLC online filing — how fast is 'immediate activation' really?
Every formation service tells me Wyoming LLCs are 'instant' — file online and you're done. Is that actually true for a foreign owner using a registered agent service? I want to file Monday and have a ...
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