Discussion:100% Foreign Owned Partnership
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Discussion Forum Index --> Advanced Tax Questions --> 100% Foreign Owned Partnership
Discussion Forum Index --> Tax Questions --> 100% Foreign Owned Partnership
Colorado29 (talk|edits) said: | 1 July 2009 |
| My client is a foreign corporation. They set up a California LLC to do business in the US...the LLC is 100% owned by the foreign corporation. The LLC is being treated as a partnership for tax purposes, no 8832 was filed.
I'm geting conflicting information on how to report this for tax purposes. Typically a single mbr LLC is a disregarded entity. Fine, I was not going to file a 1065...and instead my research said to file an 1120-F. Then I noticed schedule P which addresses/reconciles foreign partner interests in partnerships...which confused me. Made me think I need to do the partnerhsip return and "pass-through" the income to the 1120-F...whereas I was originally thinking I would report all income and expense directly on the 1120-F. Anyone familiar with this? My question is, do I file both the 1065 & 1120-F, or just the 1120-F? | |
| 1 July 2009 | |
| You indicate that "the LLC is being treated as a partnership for tax purposes." This is not accurate. It is treated as a disregarded entity if it only has one owner and has not elected to be treated as a corporation. You may believe that it is treated as a partnership because some IRS corresponded referred to it as a partnership. The IRS doesn't know how many owners the LLC has and the IRS assumes it has more than one owner.
Just file 1120-F. Also look at Form 5472. | |
| 3 July 2009 | |
| Most foreign countries do not recognize the disregarded entity and/or partnership status; and treat the entity as a corporation. Thus, filing an 1120-F is a Good Thing, as it gets a like-for-like treatment in the home country. | |
