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Taxation on LLC (single person owner non resident alien) holding investment property in USA and one investment property in Europe

To Whom It May Concern, A few facts before I ask. I'm non resident alien (NRA), don't have any social security number (SSN) or Individual taxpayer Identification nr (ITIN) in USA. I have one investment property in USA and other in Europe. I'm looking to establish LLC for investment purposes only and transfer both property deeds to LLC. I would be the only owner of LLC (sole proprietor or c corp). Does a.m. NRA LLC owner have to pay out any salary, workers comps, insurance, social or medicare fees? Do I need to report each year the financial statement to the secretary of state? How to report foreign operations. I know USA and European countries have signed double taxation treaty where income is taxed at source - effectively connected. As a US LLC having the investment property in Europe I would pay tax on generated income in Europe. And for investment property in the USA I would pay tax on any generated income in the USA. The main concern is how to bookkeep and produce one ballance sheet and one financial statement having 2 different properties with 2 different jurisdictions. Some business events will be connected with EU property and other connected with US property? At the moment I invest all the earnings form EU property into improvements in US property. May this investments expenses flow form one country into another and vice versa under one LLC? If the case would be that US property starts to produce income and this income which is further invested in Europe. How such event is treated since it wouldn't be spent for personal use but for further investment purposes outside USA? Do I need to file 1040 or 1040NR as NRA owner of US entity with the fact that one person company is by default pass through on federal level if not classified differently when establishing the company. Is such LLC obliged to file corporate state taxes or individulat state taxes on investment peoperty or is just taxed once on federal level? thank you Matt
Investment personal or business sale of property Rental Property
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Tax Professional Answers

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Dan Gordon
As a sole partner in an LLC generating income the chances are the the IRS will treat that income as self employment and SE tax would be required to be paid on all the income the LLC generates. A Sub-Chapter S corporation might be a better alternative.
Leave a Comment 94 weeks ago

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Question Owner
Dan, many thanks for your reply. As far as I know NRA is not allowed to form S - corp in the USA. Maybe another question - Is sole partner LLC with property that hasn't generated any income in the last year obliged to report financial statement to the Secretary Of State once per year (I have in mind State Of Florida and Washington)? Thank you
Reply 94 weeks ago


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