Dual Citizen reporting corp. dividend income on US Return

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Rampant
Posts: 2
Joined: Tue Feb 26, 2019 9:47 am

Dual Citizen reporting corp. dividend income on US Return

Post by Rampant »

Hello,

I'm a dual citizen living in Canada looking to create a Canadian professional services corporation in which I'll have 50% ownership/shares. I'll be receiving dividend income from the corporation, and I'm wondering if that would be considered under the foreign earned income exclusion, or if the dividends would be subject to both Canadian and US taxes?

I know I'll have to submit form 5471, but are there any other concerns or considerations in foreign corporate structure I need to worry about when submitting or reporting?
ND
Posts: 223
Joined: Thu Feb 21, 2013 5:28 pm

Re: Dual Citizen reporting corp. dividend income on US Return

Post by ND »

would be considered under the foreign earned income exclusion, or if the dividends would be subject to both Canadian and US taxes?
the dividends would be subject to both Canadian and US taxes, dividend income is not 'earned income'

I know I'll have to submit form 5471,
If your other 50% partner isn't a US person, the corp may not be a CFC, this affects your 5471 reporting and other tax areas

but are there any other concerns or considerations in foreign corporate structure I need to worry about when submitting or reporting?
Sec 965, GUILTI, PFIC, Subpart F, Accumulated Earnings Tax, transfers to foreign corps, taxes listed at https://www.irs.gov/publications/p542

also, it's likely the dividend planning you're employing for Cdn tax purposes will not be effective planning cross-border for a dual.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Dual Citizen reporting corp. dividend income on US Return

Post by nelsona »

ND, I like the use of the acronym GUILTI for GILTI. Nice touch.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
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