LLC of a US/CA citizen operating in Canada

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taxquestions
Posts: 42
Joined: Tue Dec 18, 2018 6:31 pm

LLC of a US/CA citizen operating in Canada

Post by taxquestions »

Im a dual US/CA citizen. Im a resident of Ontario, Canada. I would like to see how this scenario would be taxed.

1) If I open a US LLC and sell / operate in Canada (while a Canadian resident) how would I be taxed? Would this result in double taxation? Who would have first rights to tax me and would I be able to use this as a credit to offset taxes owed to the other country? Would I be hit with both US Self-employment tax (SS/Medicare) and Canadian CPP? Any way to circumvent this?

2) How would the same scenario play out if I was to sell / operate in the USA?
taxquestions
Posts: 42
Joined: Tue Dec 18, 2018 6:31 pm

Re: LLC of a US/CA citizen operating in Canada

Post by taxquestions »

Allan explains it well here, but hes assuming the income is from the USA only (ill mostly be selling in Canada using Amazon.ca FBA): https://www.youtube.com/watch?v=kAFt6DCFX3k

Summary: CRA recognizes an LLC as a separate corporation, not as a pass through entity and therefore I am double taxed. He recommends a limited partnership

Im going to do more reading on limited partnerships. Basically what I want is a seperate US legal entity so I can open an Amazon.ca seller account using this entity and not be double-taxed by Canada and the USA. Suggestions?
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