I live and work in Canada (self-employed). I would like to invest in a U.S. company and receive profits in the form of dividends (or other). What type of company (S-Corp, etc.) should I request my U.S. associates to set up to receive my Canadian investment (would be made in U.S. dollars but coming from Canada, obviously).
Is there a better structure that I am not yet considering?
Thank you.
Canadian (in Canada) receiving dividends in the U.S.
Moderator: Mark T Serbinski CA CPA
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- Posts: 20
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Re: Canadian (in Canada) receiving dividends in the U.S.
I found this...
"To receive pass-through profit distributions, a foreign citizen may form a limited liability company. In contrast, all profit distributions (called dividends) made by a C corporation are subject to double taxation. (Under US tax law, a nonresident alien may own shares in a C corporation, but may not own any shares in an S corporation.) For this reason, many foreign citizens form a limited liability company (LLC) instead of a corporation."
It sounds like the only options would be 1) invest in a C-Corporation or 2) invest in an LLC instead of a corporation.
Are dividends in Canada received from a US C-Corporation (subject to double taxation) able to claim a foreign tax credit?
Are dividends in Canada received from a US LLC taxed in the U.S. or Canada?
"To receive pass-through profit distributions, a foreign citizen may form a limited liability company. In contrast, all profit distributions (called dividends) made by a C corporation are subject to double taxation. (Under US tax law, a nonresident alien may own shares in a C corporation, but may not own any shares in an S corporation.) For this reason, many foreign citizens form a limited liability company (LLC) instead of a corporation."
It sounds like the only options would be 1) invest in a C-Corporation or 2) invest in an LLC instead of a corporation.
Are dividends in Canada received from a US C-Corporation (subject to double taxation) able to claim a foreign tax credit?
Are dividends in Canada received from a US LLC taxed in the U.S. or Canada?