CANADIAN OWNING US PROPERTY

[SLoMO Group]

Good Evening,

I am looking at purchasing US property (as a Canadian) and would like to set up the most efficient structure possible. Ideally I would like this structure to be conducive to outside investment for others that may want to partner on individual properties.

From what I have researched, it would seem the most popular option is a US LLC (with option to tax on net profit vs. 30% withholding), which would be wholly owned by a Canadian corporation.

I have a few questions:
- Is this the structure you would recommend?
- Would this structure be subject to double taxation (US tax on the LLC and then Canadian tax on the corporation)? Is there a way to avoid this?
- Is it possible to incorporate a US company and provide capital (to the US company) in the form of debt issued from the Canadian company. Specifically, I would like to avoid US tax if possible (as I'm hoping interest payments to the CDN company on the debt would be pre-tax)? If not, are there other options?
- Does Serbinski Accounting Firms offer services to create this structure complete necessary paperwork on an on-going basis?

Thanks,

Sean

[ND]

Some structures that are in use in the market (Morguard and Timbercreek ) carry a higher overall effective tax rate but should not create U.S. income tax payment or filing obligations for the Canadian Public Fund investors. As well, there are additional structures involving REITs.

One uses Cdn LP and GP and a US partnership. Canadian General Partnership elects to be treated as a corporation for U.S. tax purposes [Canadian “Blockerâ€￾ corporation - the U.S. tax payment and U.S. filings obligation would be with “Blockerâ€￾].