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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13339
Experience:  15years with H & R Block. Divisional leader, Instructor
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Is income from an LLC nonresident Mexican exempt from US tax

Customer Question

Is income from an LLC for a nonresident Mexican exempt from US tax by way of a tax treaty and if so what is the specific reference (paragraph, etc.) to the treaty?
Submitted: 10 months ago.
Category: Tax
Expert:  Robin D. replied 10 months ago.

Hello

If the LLC is a single member LLC and the nonresident is not physically in the US doing business in the US the income would be self employment. The sourcing rules say that for Business income: Personal services the income is sourced where the services are performed. If Business income: Sale of inventory -purchased then the factor determining source is Where sold. If Business income: Sale of inventory -produced then where produced determines the source.

The LLC would need to be under the sourcing rule that shows not sourced in US.

ARTICLE 7 Business Profits of the US mexico Tax Treaty covers business profits and tax.

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Expert:  Robin D. replied 10 months ago.

You started another question. Please make sure to stay in this thread for follow ups.