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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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I just formed a single member LLC sole purpose of investing

Customer Question

I just formed a single member LLC for the sole purpose of investing with a builder on a custom home which will be built at his cost, used as a model for a short time, and the profits split after sale. I am opening a separate LLC bank account to hold the funds for draws during construction. I own the lot. I am filling out Vanguard's new acct forms and have a new EIN. Am I subject to backup withholding? If exempt, Under what organizational exemption? Thanks!
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.
Hi from Just Answer. I'mCustomer and can assist. If you use an EIN for your LLC, you are not subject to backup withholding. You escape backup withholding by providing your EIN, or TIN, to vendors, including Vanguard. You are exempt because you should not be receiving Form 1099-MISC (the form is only for individuals). Thanks for asking at Just Answer. Positive feedback is appreciated. I'mCustomer