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What do you do for non u.s. citizens that reside outside the USA when they are investing in your U.S. , LLC? The form 1065 K-1 form has a place to designate that the partners is a "foreign partner" but the K-1 also asks for the "Partner Identifying Number" or "tax id#". The foreign partner has no US Tax id. The 1042-S is not needed to be filled out. How do i handle this? What will happen if i submit the K-1 with no "Partner Identifying Number"?...the 1042-S Form does not apply here. Thanks

Submitted: 120 days and 4 hours ago.

Category: Tax

Value: $30

Status: CLOSED

Posted by Anne 120 days and 3 hours ago.

Answer

Hi XXXXXXXXXXX

Thank you for using justanswer. All foreign investors that have Federal tax reporting requirements (such as your K1) should apply for an ITIN number. ITINs are for federal tax reporting only, and are not intended to serve any other purpose. Your foreign investor will need to attach a Form W-7 (Rev. March 2009) Application for IRS Individual Taxpayer Identification Number and mail his return with the W7 attached to:
IRS
ITIN Operation
Po Box 149342
Austin TX XXXXX-XXXX

See below for more information:

Individual Taxpayer Identification Number (ITIN)

I hope this helps

120 days and 3 hours ago.

Reply

Hi,
Thanks for the quick reply. I want to make sure i understand correctly. It is my understanding that the foreign investor (in this case it's a foreign corporation) is part of a tax treaty and pays no U.S. Income tax but instead pays it to their country where the corporation is incorporated. My LLC is the U.S. corporation that has the tax reporting requirement. We need to get the LLC taxes filed and have to issue K-1's. Do i issue the K-1 to the foreign corporation, file the LLC tax return and K-1's and leave line Part 2 line E of the K-1 for this Foreign Partners' identifying number blank? Or will this present a problem with the IRS? Thanks

Accepted Answer

You have it correct, except you should write "applied" on the line where the identifying number should be.

Accepts:
Expert:	Anne
Pos. Feedback:	100.0 %
Answered:	7/25/2009

Master Tax Preparer

Enrolled Agent with 20 Years Experience specializing Individual and Small Businesses

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