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.
Form 8865 Introduction: Foreign Partnership Reporting (Ep. 43)
I have interests in a foreign partnership and need to understand: Form 8865 Introduction: Foreign Partnership Reporting. What are the filing thresholds and requirements?
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 ...
When do I file Form 940 for my foreign-owned LLC and what information do I need?
I just finished my first year of having employees in my foreign-owned LLC. I've been filing Form 941 quarterly but now I'm told I also need to file Form 940 for FUTA. How is this different from 941? W...
My bank mentioned 'Section 312 enhanced due diligence' for my LLC's international wire transfers — what is this?
I own a foreign-owned LLC that imports goods from Southeast Asia. My LLC receives wire transfers from my personal bank account in Singapore and also sends payments to suppliers in Vietnam and Thailand...
What are composite returns and when do states require them for nonresident LLC members?
My accountant mentioned 'composite returns' as a way to simplify state tax filing for my multi-member LLC with foreign members. We have members from three different countries and the LLC operates in f...
Form 6252 Calculation: How to Report Installment Sales (Ep. 35)
I'm considering an installment sale: Form 6252 Calculation: How to Report Installment Sales. How does Form 6252 work and how do I calculate the taxable gain?
TN visa (USMCA) and LLC ownership
I am a Canadian citizen working in the U.S. on a TN visa under the USMCA agreement. I work as a management consultant for my TN employer, but I also want to start my own consulting LLC on the side. Ca...
Section 179 Deduction Limits: Maximum Deduction and Phase-Out Rules (Ep. 29)
I have questions about tax deductions: Section 179 Deduction Limits: Maximum Deduction and Phase-Out Rules. What are the limits and rules I need to follow?
How do you calculate GILTI? What are tested income, QBAI, and net DTIR?
I understand GILTI at a high level but I'm struggling with the actual calculation. My CPA mentioned terms like 'tested income,' 'QBAI,' and 'net deemed tangible income return' and I got lost. I own a ...
QSS Eligibility: Not Remarried Requirement Explained (Ep. 72)
I need help with my filing status: QSS Eligibility: Not Remarried Requirement Explained. What are the rules and how do I determine what applies to my situation?
What is IRC 1441 withholding and when do my U.S. clients have to withhold 30% from payments to me?
I'm a South Korean graphic designer with a New Mexico LLC. A U.S. company I freelance for said they need to withhold 30% of my payments because I'm a foreign person and IRC 1441 requires it. Is this r...
My U.S. partnership has a foreign partner. Do we need to file Form 8804 for withholding?
I run a U.S. LLC taxed as a partnership with two partners — myself (a U.S. citizen) and a partner who lives in Germany and is not a U.S. person. The partnership earned about $200,000 in effectively co...
What is the SDN list and do I need to screen my LLC's clients against it?
I run a foreign-owned LLC that provides consulting services to small businesses. A colleague mentioned the 'SDN list' and said I could get in trouble if one of my clients is on it. I thought only bank...
My LLC changed registered agents. Do I need to file Form 8822-B with the IRS?
I'm a foreign owner of a Wyoming LLC and I recently switched registered agents from one provider to another. My mail forwarding address for the LLC has changed as a result. Do I need to notify the IRS...
Form 3800 Calculation Example: General Business Credit Step by Step (Ep. 27)
I'm trying to maximize my tax credits: Form 3800 Calculation Example: General Business Credit Step by Step. How do I calculate and claim these credits correctly?
Do Turkey's CFC rules tax my U.S. LLC's undistributed profits?
My Turkish tax advisor says Turkey has CFC rules that could force me to pay Turkish tax on LLC profits I haven't distributed. My LLC earns mostly active services income, not passive income. Does the p...
What are totalization agreements and can they reduce my LLC's payroll tax obligations?
I'm from Germany and I own a U.S. LLC. I'm considering moving to the U.S. temporarily to work in my own business. A friend mentioned totalization agreements could help me avoid paying Social Security ...
Can a foreign LLC owner do a 1031 exchange to defer FIRPTA tax? Or does FIRPTA block it?
I own a rental duplex in Arizona through my foreign-owned SMLLC and want to sell it and buy a larger property. I've heard about 1031 exchanges where you can defer capital gains tax by reinvesting in a...
Form 8832 asks about number of owners — how does that affect my classification options?
I'm filling out Form 8832 for my LLC and line 3 asks if I have more than one owner. I'm the only owner. How does answering 'No' change what classifications I can elect? Also, if I add a partner later,...
AMT Credit: How to Recover Your Alternative Minimum Tax (Ep. 20)
I'm worried about the Alternative Minimum Tax: AMT Credit: How to Recover Your Alternative Minimum Tax. How do I know if this affects me and what can I do about it?
What is the FDII deduction on Form 8993 and can my C corporation benefit from it?
My U.S. C corporation provides software services to foreign clients, generating about $500,000 in foreign-derived income. My CPA mentioned something called FDII — Foreign-Derived Intangible Income — t...
Form 8865 Category 3 Filers Explained (Ep. 46)
I have interests in a foreign partnership and need to understand: Form 8865 Category 3 Filers Explained. What are the filing thresholds and requirements?
How do passive activity loss rules affect foreign LLC owners?
I own a US LLC that invests in rental real estate and I also have a separate active business. I have heard that passive activity loss rules can limit my ability to deduct rental losses against my busi...
I gave my U.S. LLC an interest-free loan — what does IRC 7872 say about below-market loans between related parties?
I'm a French entrepreneur and I lent my Delaware LLC $200,000 at 0% interest to fund its operations. A friend who is a CPA told me this could create tax problems under IRC 7872 — something about the I...
Can I legally pay zero tax by combining UAE residency with a U.S. LLC?
I'm considering relocating from the UK to Dubai specifically to take advantage of zero personal income tax. I plan to keep my U.S. LLC and run my consulting business from Dubai. Is this legal? What ar...
What BIR forms do I need to file for my U.S. LLC income?
I earn income through my U.S. LLC and want to report it properly to the BIR. I'm registered as a self-employed professional. Do I file 1701Q quarterly? Do I need to register the LLC itself with the BI...
I contributed cash and equipment to my foreign partnership. Do I need Schedule O of Form 8865?
I'm a U.S. person and I contributed $100,000 in cash and some computer equipment (worth about $20,000) to a foreign partnership that I'm a 40% partner in. My tax advisor mentioned Schedule O of Form 8...
I'm buying a property from a foreign-owned LLC — what are MY obligations as the buyer for FIRPTA?
I'm a U.S. citizen buying a house from someone who I think is a foreign national (they have a foreign-sounding name and the property is in a Wyoming LLC). I'm not sure if FIRPTA applies or what I need...
What is the FinCEN whistleblower program and should I be worried about former employees reporting my LLC?
I recently had a disagreement with a contractor who worked for my foreign-owned LLC. He threatened to 'report me to FinCEN' for money laundering. My LLC is a legitimate software company and I have nev...
MFJ: Both Spouses Must Agree (Ep. 56)
I need help with my filing status: MFJ: Both Spouses Must Agree. What are the rules and how do I determine what applies to my situation?
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