Wyoming LLC and residence in Paraguay - getting paid

[acidman]

Hi there,

I managed to furnish myself with a residence in Paraguay, and have since opened a US WY single-owner LLC.
The LLC had a contract with a company and got paid in USDT.
Now, it is my understanding that as a foreign-owner single-owner LLC (no ETBUS) the company does not exist for tax purposes and that the income then should be taxed as part of the owning entity's taxes.

My questions are as follows:
- Assuming the payment was in USDT (aka crypto), what is the exact mechanics of cashing out such that I fall into the tax loophole? If the company simply transfers USDT to my exchange account, can it be said that the company paid me a dividend? i.e. what would be the action on the company side ledger movement? Or is it not even a ledger movement since crypto is an asset and the company simply gave control/gifted me the asset?
- Assuming I'd like to switch over to getting paid to a bank account (i.e. the company would have a normal bank account wherever and would get paid there from clients), how would the ledger movement be labelled such that again I land in the loophole?

Clarification: when I mention the term loophole I mean that the income is labelled non-taxable by both the US (since the company "doesn't exist for tax purposes") and PY (since it is not a locally sourced income).

Thanks!

 

[phatoz]

There's multiple parts to this. First of all generally an LLC cannot pay dividends. HOWEVER, that depends on how the tax treaty is setup (if any) and how the country you are resident in sees LLC's. Not everywhere sees an LLC the same. So check that first. Second, do not make the mistake so many do that territorial tax means no tax ever....there are many nuances. If you attempt to transfer large amounts into PY they'll ask where the tax was paid. if you can't answer, then they may treat it as income and tax you accordingly.

Regarding what I think are accounting/book keeping Questions..
So, the USDT is classed as an asset. You cannot log an asset as income (that I know of). I suspect it will be treated as if one received gold or seashells. The value on the day is added to the income/bank ledger then the bank/asset ledger to effectively transfer it immediately to the balance sheet. Then again another set of entries to transfer it from the balance sheet into fiat in the trading account then back out to yourself as drawing or salary.

So, if I'd sent 1000USDT to the exchange, I'd take a screen shot valuations, and log that, then send it on to your personal wallet.

If you're a big fish your accountant or book keeper will do it all for you. If you are a small fish then just keep ledger entries and accurate clear notes so that if you were ever called to audit, someone else could easily understand how you'd structured the payments.



Sorry, but without knowing alot more, hard to give more detailed feedback.

 

[acidman]

If you attempt to transfer large amounts into PY

I'm not planning to do that, but I'm actually facing a similar question wherever I go (unless I do the swap-payout solely on US banks).

The value on the day is added to the income/bank ledger then the bank/asset ledger to effectively transfer it immediately to the balance sheet. Then again another set of entries to transfer it from the balance sheet into fiat in the trading account then back out to yourself as drawing or salary

"Salary" means I need to be employed by the company? Since I'm not a US resident does the "salary" part even relevant? To my understanding usually salary infers employment which has another set of imperatives

I suspect it will be treated as if one received gold or seashells.

What would be the procedure if an LLC wanted to transfer seashells to its owner? Do they have to be converted to fiat? I've read somewhere that assets can also be drawn.

 

[Carl Thomas]

Hi there,

I managed to furnish myself with a residence in Paraguay, and have since opened a US WY single-owner LLC.
The LLC had a contract with a company and got paid in USDT.
Now, it is my understanding that as a foreign-owner single-owner LLC (no ETBUS) the company does not exist for tax purposes and that the income then should be taxed as part of the owning entity's taxes.

My questions are as follows:
- Assuming the payment was in USDT (aka crypto), what is the exact mechanics of cashing out such that I fall into the tax loophole? If the company simply transfers USDT to my exchange account, can it be said that the company paid me a dividend? i.e. what would be the action on the company side ledger movement? Or is it not even a ledger movement since crypto is an asset and the company simply gave control/gifted me the asset?
- Assuming I'd like to switch over to getting paid to a bank account (i.e. the company would have a normal bank account wherever and would get paid there from clients), how would the ledger movement be labelled such that again I land in the loophole?

Clarification: when I mention the term loophole I mean that the income is labelled non-taxable by both the US (since the company "doesn't exist for tax purposes") and PY (since it is not a locally sourced income).

Thanks!

Bear with me on this and hopefully you'll see how you can live free without being taxed.

UCC 9-307(h) “[Location of United States] The United States is located in the District of Columbia.”

“United States” as it is defined in 28 USC 3002 (15) (A): “A Federal corporation” [which means District of Columbia]

Wyoming is not part of the UNITED STATES (US)

Wyoming is part of the united States of America (uSA)

This is the same for all the 50 states, not just Wyoming.

Only entities organised and incorporated in the UNITED STATES are subject to the UNITED STATES CODES which includes Title 26 - INTERNAL REVENUE CODE.

Can you follow the legal breadcrumbs?

There is no 'LAW' you have to pay a % of everything you Create/Earn to anyone.

You are already FREE

But YOU would like to pay a % to someone, just to make sure your protected from .........

This is the MATRIX - Govern Minds.

 

[phatoz]

I'm not planning to do that, but I'm actually facing a similar question wherever I go (unless I do the swap-payout solely on US banks).


"Salary" means I need to be employed by the company? Since I'm not a US resident does the "salary" part even relevant? To my understanding usually salary infers employment which has another set of imperatives

It only becomes relevant if your circumstances need it to be. The whole point of having a LLC or company structure is optimisation...whether that be tax, security or otherwise. And all that depends where you live and your goals. How to take money out of the LLC or Company is down to what the objective is.

What would be the procedure if an LLC wanted to transfer seashells to its owner? Do they have to be converted to fiat? I've read somewhere that assets can also be drawn.

You can put sea shells in and take seashells out. What's important is the accounting of that. Regardless of the asset you need to account for it in a fiat value. Let's say you have some land and you setup a company to make nails...so you put the land into the company structure because you want to build a factory on it. You therefore have placed an asset (land) into the company. You cannot simply write on the account ledger ..'one bit of land'!!! You have to enter it into the accounts at the value on the day it was transferred in. In that case it would effect the Capital and Asset accounts on the balance sheet. However what you are proposing will effect both the Income sheet and Asset sheet because you are receiving an asset as payment which should be relfected in your sales ledger. Then that (because it's an asset and not fiat) should be moved to the asset ledger. Then, if it is used as payment to you, it is then withdrawn from the asset ledger with a value on the date added to the payments/capital/dividend account (depending how you classify the payment).

BTW if you take money/asset out of the LLC, this has to be reported annually or the IRS will fine you heftily.

If you are truly lost, I suggest investing in a book keeper for six months to setup your accounting ledger and start it off with entries, then you'll see how the transactions are handled from an accounting perspective and can do it yourself. The best investments are often in our own education.