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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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My company, which is a LLC and a US company, owns a 66.7% interest

Resolved Question:

My company, which is a LLC and a US company, owns a 66.7% interest in a Central American company.
This foreign company paid more than $600 to a US individual for engineering consulting services which he performed in the foreign country for our Central American company.
I know he has to report this income on his US tax return.
Should my US LLC issue a 1099 since we own 66.7% of foreign company?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

Lev :

Hi and welcome to our site!
Central American company that performs no business activities in the US has no reporting obligations - and compensation paid to US citizens for services provided outside the US are not reportable.
The LLC however - must report the fact of the ownership interest in the Central American company. In case that is a single member LLC treated as disregarded entity - that reporting obligations are passed to you as a member.

Customer:

US LLC has more than one member and files a partnership return. It also files the forms reporting ownership interest in Central American company.

Customer:

Therefore, the US LLC does not have to issue a Form 1099 to the US consultant for payment of services performed in Central America for foreign company, and paid by foreign company, correct?

Lev :

That is correct. Because the US LLC made NO payments - it has no obligation to report.

Customer:

I don't see the "Accept" button, so I will tell you I accept Lev's answer.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22646
Experience: Taxes, Immigration, Labor Relations
Lev and 4 other Tax Specialists are ready to help you

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