I'm starting a new business in California. Will be setting it up as an LLC.
Part of the initial capital contributions will be coming from family members (not immediate family, but uncles, aunts, godparents, etc.) overseas (Taiwan, specifically). They are not U.S. citizens or permanent residents - all Chinese citizens (of Taiwan, Republic of China).
I am now a U.S. citizen. I originally came to America as an immigrant during my childhood. I have lived in the U.S. now for the majority of my adult life, in excess of 40 years. I have always worked & earned my income & filed my personal income tax
returns in the U.S. - have never lived or worked overseas.
My company will be set up as an LLC, for example, Cal-Pacific Trading, LLC (note: this is NOT the real name of my LLC to be), and then there will also be a DBA. So, the actual business will reflect something similar to: XXXXX XXXXX LLC, dba Super Discount Electronics (once again, the DBA is just a made up name for this example only).
Once all legal / regulatory details have been completed and the LLC & DBA's are properly established, I will open up a business checking account in the name of the DBA. At that time, my relatives/family will wire funds into the business checking account. The anticipated funds that will be wired in will be somewhere in the range of $25,000 to $50,000 in U.S. dollars.
To be exact, the funds will be wired from an overseas bank in Taiwan to my local
U.S. bank. However, at this time, I am not sure whether the overseas bank will be a **COMPLETELY** foreign bank, ie, The Bank of Taiwan, or whether it will be from the local Taiwan branch of a U.S. bank, such as Citibank Taiwan. Most likely, it will be from a Taiwan based bank.
At the current time, the optimistic forecast is tht the **INITIAL** capital contribution of $25k - $50K will be the only capital contribution from my relatives. The funds are meant to supply my working capital during the start-up phase of my business operations and the hope is that this amount will suffice.
However, in the event that additional capital is needed before the operating cash flows of this new venture is adequate to sustain this new business, it is possible that there will be additional capital contributions in the future.
My questions / concerns relate to the what must be done after these overseas wired funds are received in my domestic U.S. business checking account.
That is, what are the **CORRECT / PROPER** regulatory / legal steps I must take & complete so that I do **NOT** run afoul of the U.S. Government / IRS.
That is - given the political environment / reality that we live in post-9/11, I definitely want to know **EXACTLY** the **CORRECT** way to do this so that I and my overseas relatives do **NOT** run afoul of any rules
& regulations or laws
in any area that might by mistake, give us problems in the areas of money-laundering, etc.
Also, for tax
purposes, I want to make sure that I do the **CORRECT & PROPER** reporting to **DOCUMENT** that these funds are meant to be the capital contribution from my relatives/family as their investment in my business, and not to be mistaken or misconstrued in any way as income.
So, the answer I'm seeking is an explanation of **ANY and ALL** relevant information and considerations about the rules, regulations & laws that pertain to what I've described above.
Most importantly, I need to know **WHAT** are the **CORRECT/PROPER** IRS tax forms that I must file and what are the filing requirements (amount of time from date the funds are wired in, etc.) so that I can properly document that the funds wired in are **MEMBER CAPITAL CONTRIBUTIONS** to the LLC, and **NOT INCOME**.