Canadian member of US LLC

[luna77]

Hello. Does anyone know how a Canadian (resident/citizen) member of a US partnership LLC should enter LLC income into their Canadian tax return?

Should the US LLC be withholding?

How should business expenses be handled? (office expenses, computer, technology etc)

If the Canadian member is also a sole proprietor (separate from the LLC) does this affect how the tax return is handled? And the handling of the expenses?

If the SP business has zero income for the year but is still active, does it figure into the tax return?

Thank you for any input. We've been given conflicting suggestions so far.

[JGCA]

The LLC in the US is deemed for Canadian purposed to be a corporation so the income you receive as a member is a dividend and yest there is supposed to be withholding tax at the reduced rate by treaty dividends. You can not claim any expense on this you must file a T2 in Canmada and take out the income as a dividend to you it flows through to you as a dividend. On the other hand if all the members in the US agree to check the box election then they will be treated as having received the income as business income and you then can do the same but this is not by default