LLC PROBLEMS

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
bigrandy
Posts: 16
Joined: Mon Jan 23, 2006 11:45 am
Location: vancouver

LLC PROBLEMS

Post by bigrandy »

I received some bad advice and purchased shares in a US LLC within a Cdn resident Corporation. My Corp & I are both Cdn resident with no U.S. permanent residence.

I "now" think I understand the problem with the double taxation issue.

I believe I will be taxed on the dividends paid to my Cdn Corp as well as being taxes in the US on the income with no ability to claim a foreign tax credit. Am I correct? If so, are there any solutions at this time. There is quite a large gain accumulated in the investment so a transfer to me is not feasible.

Can I pay reasonable managment fees to myself (Cdn) and have them be deductible on the US 1120-F filing? Would I have to file a US individual return on these fees if I reside in Canada and earn the fees here?

T
Post Reply