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USTaxAdvising
USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1084
Experience:  US Taxation specialist.
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I am a UK resident with a Delaware registered LLC.

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I am a UK resident with a Delaware registered LLC. The company does not have employees only myself the owner. It has small registered capital of $1000 and the company has made some retail trades in the United States in the previous 12 month period and the revenue was deposited into the company bank account in the United States. The company has been issued an ITIN number (equivalent of EIN) number. I understand we have completed the state requirements for submitting returns and paid local state taxes.


 


What obligations does the company have to meet federal tax obligations?


 


When do any LLC tax returns need to be filled and how are they returned?


 


Also, are any other documents required to be submitted to the IRS and finally, does the company need to declare any non-US income?


 


Finally, could you recommend any tax lawyers/accountants who are able to assist the company to meet any legal obligations outlined above.

Submitted: 1 year ago.
Category: Tax
Expert:  USTaxAdvising replied 1 year ago.

Hello,

Thank you for using justanswer. I can assist you with your questions today.

 

What obligations does the company have to meet federal tax obligations? - Your company itself does not have any U.S. federal income tax obligations. It will be considered a "disregarded entity seperate from it's owner" under U.S. federal income tax principles. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Single-Member-Limited-Liability-Companies That is assuming you have not made an entity classification election via Form 8832 to elect corporate classification.

If a single-member LLC does not elect to be treated as a corporation, the LLC is a "disregarded entity," and the LLC's activities should be reflected on its owner's federal tax return. If the owner is an individual, the activities of the LLC will generally be reflected on:

Generally if your only source of U.S. income is from investment trading (as mentioned) above you would not have any U.S. source income and not have a federal tax return filing requirement. Note that under IRC 864(b)(2) there is a safe harbor for foreign people investing in the U.S. - this basically states that if you only use a U.S. broker and trade in securities it will not be considered a U.S. trade or business and the source of the income will be your personal domicile.

 

I do not see any U.S. federal income tax filing requirements for your personal self simply due to the trading activity. You should review Form 1040NR instructions here to determine if you have any other income subject to U.S. taxation: www.irs.gov/pub/irs-pdf/i1040nr.pdf

 

When do any LLC tax returns need to be filled and how are they returned?-as mentioned above there is no LLC federal tax return, it would be your individual return (Form 1040NR)(assuming you are not a U.S. citizen). The due date for this return is the generally April 15th (maybe 16 or 17th depending if the 15th falls on a weekend) and can be extended via Form 4868 till October 15th.

 

Also, are any other documents required to be submitted to the IRS and finally, does the company need to declare any non-US income? - I can't think of any other documents that needs to be submitted to the IRS. Generally speaking you would not declare any non U.S. source income unless you were deemed a resident for tax purposes in the U.S.

 

Finally, could you recommend any tax lawyers/accountants who are able to assist the company to meet any legal obligations outlined above. - Unfortunately we cannot promote any other businesses on the website. It is part of our expert agreement with JustAnswer.

 

I hope this provides the clarity you were looking for, please let me know if I can assist further.

 

Best regards,

 

Customer: replied 1 year ago.

Thank you so far. A couple of points for clarification.


 


1) As mentioned in the original question, the income is from 'retail trade' (sold physical products), rather from investment trading.


 


Would the same tax circumstances apply as per your answer based on investment trading?


 


2) From the answer provided, I understand that the income (and profit) present in the LLC bank account, is classed as the LLC's owner's income for Federal Tax purposes rather than belonging to the LLC, and that I personally (as the single non US resident owner of the LLC) would be required to submit a personal TAX return declaring income, profit and loss, for US based transactions, would this be correct?


 


Thank you

Expert:  USTaxAdvising replied 1 year ago.

Hello James,

 

Would the same tax circumstances apply as per your answer based on investment trading? - No, if you were actually selling goods (retail) in the U.S. then most likely the income would be subject to U.S. taxation.

 

2) From the answer provided, I understand that the income (and profit) present in the LLC bank account, is classed as the LLC's owner's income for Federal Tax purposes rather than belonging to the LLC, and that I personally (as the single non US resident owner of the LLC) would be required to submit a personal TAX return declaring income, profit and loss, for US based transactions, would this be correct? - yes correct.

 

US taxation for foreign persons doing business in the U.S. is somewhat complex. If you do not have a physical office in the U.S., are not marketing in the U.S., not physically present in the U.S., then there is a good chance that the income would not be "Effectively Connected Income" ("ECI"). If you have no ECI there is a good chance the income would not be taxable income by the U.S. I have attached a few articles for your "liesurly" review.

http://www.gdblaw.com/images/doc/BusinessUSA_Eng.pdf

http://www.irs.gov/Individuals/International-Taxpayers/Effectively-Connected-Income-(ECI)

 

Best regards,

USTaxAdvising, CPA
Category: Tax
Satisfied Customers: 1084
Experience: US Taxation specialist.
USTaxAdvising and 3 other Tax Specialists are ready to help you
Expert:  USTaxAdvising replied 11 months ago.
Just checking in. Do you have any further questions or did I answer them? Let me know if I can be of further assistance.

Looking forward to hearing from you.

Best regards

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