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socrateaser
socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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Can an LLC with a single member that is a foreign

Customer Question

Can an LLC with a single member that is a foreign corporation still elect to be treated as a partnership and file a FORM 1065. Normally, single-member entities are disregarded entities, but if owned by a foreign corporation don't they still file FORM 1065? As an LLC with a single-member, a foreign corporation, are they required to file FORM 5472 too?
Submitted: 1 month ago.
Category: Tax
Expert:  socrateaser replied 1 month ago.

Hello,

An LLC that was a partnership and loses its last partner, so that it has only a single owner becomes a disregarded entity. Treas. Reg.(###) ###-####3(f)(2). The LLC owner would report its income on the foreign corporation's IRS Form 1120-F.

At this time the foreign corporation is not required to file form 5472. However, the IRS has issued proposed regulations (IRB 2016-21), which when published as final, will require filing of the form.

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Customer: replied 1 month ago.
I will read. So it's absolute they cannot file a 1065 as a partnership and file October 17th like other partnerships. If 1120F, then for this year they would be late???
Expert:  socrateaser replied 1 month ago.

No they cannot file as a partnership, and yes, they will be late. See 1120-F Instructions -- When to File (page 4).

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Customer: replied 1 month ago.
a U.S. LLC formed in Nevada would be deemed a foreign corp and have to file a 1120-F just because it is owned by a foreign corp.
Expert:  socrateaser replied 1 month ago.

No, the foreign corporation that is receiving the income would have to file the 1120-F.

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Expert:  socrateaser replied 1 month ago.

Hello again,

I see that you have reviewed my answer, but that you have not provided a rating. Do you need any further clarification concerning my answer, or is everything satisfactory?

If you need further clarification, concerning this matter, please feel free to ask. If not, I would greatly appreciate a positive feedback rating for my answer (click 3, 4 or 5 stars) – otherwise, I receive nothing for my efforts in your behalf.
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Customer: replied 1 month ago.
I've been reading Form 8832 to determine if I can still elect to be treated as a partnershipb with a foreign member as the foreign owner can't file a 1120F
Expert:  socrateaser replied 1 month ago.

I believe that you are looking for the proverbial "pot-o-gold at the end of the rainbow."

No law exists to support your desired outcome. I wish it were otherwise, because there is no benefit to my delivering bad news to you.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer (click 3, 4 or 5 stars) -- otherwise, I receive nothing for my efforts in your behalf.

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