Us Llc non resident

[Xshore]

Kind of not...the dividends would be profit distribution on a members share (but for an LLC it is not fixed parts like stock, it is a fixed part of the entire profit (profit share - not really a dividend). From an IRS point of view they will treat the profit distribution as part of your income. Which means you may jump up in tax bracket and so paying a lot more in tax compared to the capital gains on "regular" stock dividends which has it's own tax percentage. This was not always the case, but now it is, thank you IRS.

I understand your point, but I dont think the wording "dividends" is to be used with LLC's, but rather profit share...well, tomatoe, tomato...anyway the mechanism (profit share vs stock) is differently taxed. But if you ask a CPA in the US they will tell you the C-Corp has share holders that make income through stock dividends vs an LLC that has members that make income on their share of the LLC with other members.

But what hell, there are for sure probably some way to issue dividends from an LLC in this wonderfully blessed country called USA, just as much as there is the possiblity to use campaign funding to pay for embarrasing stories...or wait, that is perhaps not possible anymore...damn it, IRS strikes again.

If you're not aware, you can file form 8832 to have a LLC treated as a corporation for tax in the US. Then it becomes the same as an inc for tax treatment in the view of IRS. Similarly, if the LLC is not tax anywhere then you could also decide to have it issue dividends if that suits your situation/operation. And in the owner live in some countries, they will treat distributions from the LLC as dividends in any case, no matter how IRS looks at it.

 

[22kay]

If you're not aware, you can file form 8832 to have a LLC treated as a corporation for tax in the US. Then it becomes the same as an inc for tax treatment in the view of IRS. Similarly, if the LLC is not tax anywhere then you could also decide to have it issue dividends if that suits your situation/operation. And in the owner live in some countries, they will treat distributions from the LLC as dividends in any case, no matter how IRS looks at it.

I am very much aware (personal experience) of the LLC elected as a C-Corp for tax purposes, I thought I already made that clear in my posts?

What is also clear is that an LLC does not issue stocks and distribute dividends. An LLC is owned by members and they make income on shares of the profit, not dividends.

Just because an LLC files to be elected as a C-Corp for tax purposes does not make it a C-Corp. The legal entity and the selected choice of taxing is not the same in USA, two different things.

 

[Xshore]

I am very much aware (personal experience) of the LLC elected as a C-Corp for tax purposes, I thought I already made that clear in my posts?

What is also clear is that an LLC does not issue stocks and distribute dividends. An LLC is owned by members and they make income on shares of the profit, not dividends.

Just because an LLC files to be elected as a C-Corp for tax purposes does not make it a C-Corp. The legal entity and the selected choice of taxing is not the same in USA, two different things.

Yes, so we do agree. The US can consider the distributions from a llc as dividends, and so will some other countries.

 

[22kay]

Yes, so we do agree. The US can consider the distributions from a llc as dividends, and so will some other countries.

Yes, this we do agree on . Just don't call it a dividend when it comes to LLC's, not to confuse the wording and meaning of a dividend from a "stock company", corporation.

Regarding LLC distributions to other countries I've never done it this way and I have no idea if that works. Perhaps it's easier managed if the both countries do have similar legal entity models, eg. both have LLC's and thus would be recognized as such. Not sure. But since you could tax it this way, maybe a country would just treat it as a regular dividend. I have no idea.

But again, what is the point of having an LLC, taxed as a C-Corp to achieve the distribution of profit in the same way as a C-Corp? Just register the C-Corp and be done with it.

 

[Xshore]

But again, what is the point of having an LLC, taxed as a C-Corp to achieve the distribution of profit in the same way as a C-Corp? Just register the C-Corp and be done with it.

The point is that it can be disregarded in the US (no tax) and still considered as dividends in another country.

 

[22kay]

How can it be disregarded? If an LLC elects to be taxed as a C-corp it is not a disregarded entity. It will be taxed twice, first on the federal level and then on the individual level. Still don't understand why you would do this...?

 

[Xshore]

How can it be disregarded? If an LLC elects to be taxed as a C-corp it is not a disregarded entity. It will be taxed twice, first on the federal level and then on the individual level. Still don't understand why you would do this...?

It can be disregarded in the US, as it is by default. And some other countries will still consider it as a corporation for tax (with dividends and not personal income).

 

[22kay]

"For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and affirmatively elects to be treated as a corporation."

Link to IRS:

Single Member Limited Liability Companies | Internal Revenue Service

Review information about the Limited Liability Company (LLC) structure and the entity classification rules related to filing as a single-member limited liability company.

www.irs.gov

Once you elect the LLC to be taxed as a C-Corp it is not treated as disregarded by the IRS, even though it would only be a Single Member LLC (eg. have only 1 member).

Maybe I'm missing something here?

 

[Xshore]

"For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and affirmatively elects to be treated as a corporation."

Link to IRS:

Single Member Limited Liability Companies | Internal Revenue Service

Review information about the Limited Liability Company (LLC) structure and the entity classification rules related to filing as a single-member limited liability company.

www.irs.gov

Once you elect the LLC to be taxed as a C-Corp it is not treated as disregarded by the IRS, even though it would only be a Single Member LLC (eg. have only 1 member).

Maybe I'm missing something here?

If you don't file the form them t's disregarded in the US. It can still be treated as a corporation in another country.

Ok, now I've made my point many times and will leave it here.