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foreign-LLC-question
New Member

I own foreign LLC. LLC made profit in 2017 and paid tax on it abroad. However I didn't receive dividend nor increased my share. Do I have any tax responsibility in US?

The bigger picture is, I own 99% of shares in LLC, my wife owns remaining 1%. We are both US residents for tax purposes. LLC made all revenue by renting properties abroad. LLC is a foreign entity and falls under foreign country laws. I understand that I have to file form 5471 to report that I OWN THE LLC. My question is, however, about income/expenses part. Should I add LLC income to Schedule E form maybe?

Again, I didn't transfer any money from LLC to any of my private bank accounts (US and foreign) and I am not eligible for dividends (as company did not pay dividends). I have not increased number of shares I own. All of the profit LLC incured in 2017 is stored on LLC's bank account.

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edit:
I might have used wrong term. The foreign entity seems to be Corporation, not LLC. It has CEO and board of directors structure and all its financials are totally separate to any individual.
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Accepted Solutions
pk
Level 12
Level 12

I own foreign LLC. LLC made profit in 2017 and paid tax on it abroad. However I didn't receive dividend nor increased my share. Do I have any tax responsibility in US?

If the entity is an independent entity i.e.a corporation that exists  independent of  the owner(s), then at the individual level the only tax reponsibility is  on all the income you receive ( whether distributed and/or re-invested). Since per your post you did not receive anything, there is nothing to report.   However, I would strongly suggest that you make sure that this is a corporation ( has a life outside of you  and  can exist even when you are not ), as the rules for LLCs/ Partnerships/ S-Corp are very different  from C-Corps-- for US taxation.  Also note that you may still be subject to FBAR and/ or FATCA requirements.

What country and what is the type of entity called in that country ( what type   GmbH, Ltd., Company, SA etc. etc. ) ?

View solution in original post

2 Replies
pk
Level 12
Level 12

I own foreign LLC. LLC made profit in 2017 and paid tax on it abroad. However I didn't receive dividend nor increased my share. Do I have any tax responsibility in US?

If the entity is an independent entity i.e.a corporation that exists  independent of  the owner(s), then at the individual level the only tax reponsibility is  on all the income you receive ( whether distributed and/or re-invested). Since per your post you did not receive anything, there is nothing to report.   However, I would strongly suggest that you make sure that this is a corporation ( has a life outside of you  and  can exist even when you are not ), as the rules for LLCs/ Partnerships/ S-Corp are very different  from C-Corps-- for US taxation.  Also note that you may still be subject to FBAR and/ or FATCA requirements.

What country and what is the type of entity called in that country ( what type   GmbH, Ltd., Company, SA etc. etc. ) ?

View solution in original post

foreign-LLC-question
New Member

I own foreign LLC. LLC made profit in 2017 and paid tax on it abroad. However I didn't receive dividend nor increased my share. Do I have any tax responsibility in US?

Hey, thanks for taking time to answer my question. Country is Poland, type of entity is called sp. z o.o. - <a rel="nofollow" target="_blank" href="https://en.wikipedia.org/wiki/Sp%C3%B3%C5%82ka_z_ograniczon%C4%85_odpowiedzialno%C5%9Bci%C4%85">http...>. I am subject to FBAR, I will e-file it here: <a rel="nofollow" target="_blank" href="https://bsaefiling.fincen.treas.gov/main.html">https://bsaefiling.fincen.treas.gov/main.html</a>
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