Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I have a sole member LLC started in UTAH, live in TN. This

Customer Question
I have a sole member...
I have a sole member LLC started in UTAH, live in TN. This is a small real estate investing business. I flip homes in TN. I was told to open an LLC in Utah to save $. I've heard that there is a "foreign" tax with this arrangement. I was never told about this when I opened the LLC. Can you tell me a little about it?
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: no
Submitted: 1 year ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 5 minutes by:
10/3/2016
Tax Professional: Dr. Fiona Chen, Certified Public Accountant (CPA) replied 1 year ago
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 509
Experience: Former IRS Revenue Agent
Verified

Hello! My name is***** to JustAnswer. I'm reviewing your question now, and will post back with your reply momentarily.

Ask Your Own Tax Question
Tax Professional: Dr. Fiona Chen, Certified Public Accountant (CPA) replied 1 year ago

Dear Customer,

The foreign tax referred to in the Utah LLC income tax return is the foreign country tax and not foreign corporation tax. Would you please tell me more on the statements you heard?

Below quotations and website links are for your references. I will follow up.

Regards,

Fiona

Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP

The Utah LLC is a foreign company in TN. A foreign corporation must obtain a certificate of authority from the Tennessee Secretary of State before it transacts business in Tennessee. Failure to do so will subject the foreign corporation to liability for triple the amount of taxes, fees, and penalties plus interest and other charges that it would have paid had it registered.

A corporation must pay a state's corporate income tax, while LLC members can typically avoid double taxation by paying income tax on the profits earned in the state and receiving a tax credit from the resident state.

Usually state follows what the federal filing is. When you file for the LLC tax return to the federal,

http://www.tn.gov/sos/bus_svc/corpFAQs.htm

http://www.bassberry.com/~/media/Files/Publications/2012/02/Guide_to_Doing_Business_TN.pdf

Ask Your Own Tax Question
Tax Professional: Dr. Fiona Chen, Certified Public Accountant (CPA) replied 1 year ago

Dear Customer,

I called both the Department of Revenue of State of Utah and State of Tennessee. The answer should be a sort of trustworthy and official. They are answered by technical research unit of Utah and tax specialist of Tennessee.

1) The State of Utah has a sort of "foreign tax" for foreign corporation. That is a non-domestic, foreign corporation, including LLC has to pay a minimum amount of tax in Utah. And that has been referred to as "foreign tax" by some.

2) The State of Tennessee does not have such a minimum tax. A foreign LLC or corporation get to do apportionment. That is, how much is TN income and how much is other state's income. That is it. For a TN corporation of LLC, all income is included as TN income.

TN does require all businesses report Franchise and Exercise tax. There are two sections which are the taxes on net worth and net income. TN also requires filing of Business Tax which is based on gross income. The State of Tennessee, Secretary of the State does charge a fee for foreign corporation registration.

Please feel free to follow up.

Regards,

Fiona

Ask Your Own Tax Question
Ask Dr. Fiona Chen Your Own Question
Dr. Fiona Chen
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 509
509 Satisfied Customers
Experience: Former IRS Revenue Agent

Dr. Fiona Chen is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
My question is: Is the foreign tax credit 100% Offset to the
Hi, my question is: Is the foreign tax credit 100% Offset to the Alternative Minimum Tax, if there are only foreign income? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
If my sole propiertorship makes 50,000 net income. How much
If my sole propiertorship makes 50,000 net income. How much can I contribute to my solo 401k? Max Employee and employer contribution amounts?… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have over $300K of foreign tax credits available for me to
I have over $300K of foreign tax credits available for me to use while I was an XPAT outside the U.S. I am now back in the U.S. and only spend a few days working overseas. I am looking for tax strateg… read more
TaxWhisperer
TaxWhisperer
Principal
Master's Degree
24 satisfied customers
I received notice from my state department of revenue they
I received notice from my state department of revenue they are reviewing my past two years of income tax filing. Upon further review I realize I have messed up terribly. I claimed for deductions for m… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
Under the new tax plan if my federal adjusted gross income
Under the new tax plan if my federal adjusted gross income is $77,230.00 how much are my federal taxes? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
If my gross income is 30000, not married and no dependents,
If my gross income is 30000, not married and no dependents, can you tell me approximately how much I would expect to pay in federal tax, state tax and SS? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
A law firm (which is a Schedule C filer) has gross income of
A law firm (which is a Schedule C filer) has gross income of 1,000,000 & Net Income 0f 280,000. In the tax reform just passed, there is a 20% deduction for law firms that have income less than 315,000… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
My gross income is $17,105.64. Do I have to file a tax
My gross income is $17,105.64. Do I have to file a tax return? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
Penalty for late filing of partnership LLC tax return, not
Penalty for late filing of partnership LLC tax return, not eligible for Rev Proc 84-35 relief because one of the partners is a foriegner… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
Is income from an LLC passed through to personal tax return
Is income from an LLC passed through to personal tax return considered earned income, enabling me to contribute to a traditional IRA?… read more
abci168
abci168
Principal
27 satisfied customers
Self employed, Im wondering if inmigration uses gross income
Self employed, Im wondering if inmigration uses gross income or net income for their figures... I make about 70,000 gross income on 1099 but after deductions net income is about 32,000.. we are a fami… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
EFLA question - net income from EFLA partnership was
EFLA question - net income from EFLA partnership was reported on Line K-1, Line 11 as $50,000 and is made up of interest, cap gains, section 988, expenses, etc. Of that amount, $30,000 is recharacteri… read more
Carter McBride
Carter McBride
LLM
247 satisfied customers
For a ny state partnership tax return, if you file an
For a ny state partnership tax return, if you file an extension but don't pay anything and then end up owing a lot. Do they still recognize the extension or do they charge a failure to pay penalty (fo… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
RE: FOREIGN TAX CREDIT We're filing a married joint filing
RE: FOREIGN TAX CREDIT We're filing a married joint filing tax return and have come up against some problems on form 1116. 1) Do we add both our names on the form? 2) On line 3a, it asks for certain i… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
I am trying to figure out the net income from the following
Hi. I am trying to figure out the net income from the following part-time jobs in MARYLAND and then the total net income. If possible, will you please send me how you arrived at the figures (the calcu… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
The NC Department of Revenue has filed an assessment against
The NC Department of Revenue has filed an assessment against me for failing to file my 2013 return. I thought I had filed it and had a copy in my files, so I re-filed the 2013 return. Now two months l… read more
abci168
abci168
Principal
27 satisfied customers
International attorney that can help with double Taxation
International attorney that can help with double Taxation treaty between US and Germany. A US Green card holder in the year 2014 worked in Germany more than 183 days as a doctor, but less than 330 day… read more
taxmanrog
taxmanrog
Master\u0027s Degree
775 satisfied customers
I filed a tax return with the department of revenue in
I filed a tax return with the department of revenue in Oregon. They have filed a tax lied on me. The return was 2013 and I think I have audit protection from you. … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x