A Canadian citizen is 100% shareholder
of an USA company. The company is a C corporation. The C corporation owns 50% of a USA partnership
. The partnership is engaged in restaurant business.. The Canadian shareholder also own a 100% business in Canada. Questions:
1. Can his USA company pay a consulting fee to his Canadian company?
2. If he pay the consulting fee to his 100% own Canadian company, does his Canadian company have to pay income tax
for the consulting in USA and does it subject to the 30% withholding
. Note that the consulting services was performed in Canada not in USA.
3. If so, does he need to issue a Form
1042s for consulting fee?
4. If so, does his Canadian company and the USA company need to have a consulting contract for the amount
5. Can he also issued W-2
wage or Form 1099 to himself beside the consulting fee even thought he hardly come to USA. He has a Social Security Card allowed him to work.
6. If issue W-2, does he subject to FICA taxes?
7. If issued 1099 to him, is he subject to Self- employment taxes? According to my research, nonresident alien
is not subjected to self-employment
8. Or do you have any other suggestion that can help him to save taxes