Hi everyone,
I had a question regarding taxes...
I'm a Canadian citizen living in Canada and I have a Delaware based LLC. I was wondering, how would taxes work for stocks and options? From what I've researched, intangibles aren't taxed in the state of Delaware. Is that correct?
I'm also aware that LLCs are taxed as corporations for Canadian tax purposes, but will I be paying US [i]and[/i] Canadian tax? If the above paragraph is correct, am I only paying Canadian tax then?
My thoughts were to file form 8832 and 1120 so it's taxed as corporation, and then withdraw accordingly whenever I need the capital (and once I withdraw, I will be hit with Canadian taxes... so pretty much I'll have control over when I get taxed). Is my understanding correct?
Question 2... is it possible to take out a loan from a private Canadian creditor (e.g.: family, friends, etc.) under the LLC? If so, how will taxes work for them?
Any help would be immensely appreciated. I've been trying to look for the answer for a while now. Thanks in advanced!
Canadian with a US LLC as a Holding Company
Moderator: Mark T Serbinski CA CPA
YOur CND with a US LLC, so the LLC can elect to be treated in teh US as a corp it makes no difference if you pay no tax to Delaware your still taxable Federally in the US. If you elect to be taxed as corp in the US tehn any tax paid in US get credited on your CND T2 corp tax return. You can defer pers tax until you personally pull out the money and you will be taxed on it in Canada personally. Loans form private sources to teh LLC are no problem there is no tax due on teh donors side. If you pay interest to them however its taxed to the donor and deductible to the corp.
JG
It would make life easier to elect as a corp so CND and US are taxed the same way, now if you elect flow through it will be taxed in the US as a partnership have to file a 1040 and then in order to get credit in Canada you have to pull out the money personally in the same year to match the tax. Do yourself a favor elect as a corp
JG