Discussion:US LLC for non-us citizen

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Discussion Forum Index --> Advanced Tax Questions --> US LLC for non-us citizen
Discussion Forum Index --> Tax Questions --> US LLC for non-us citizen

Miinmansae (talk|edits) said:

14 June 2009
Hello,

My client is a nonresident alien of the US and lives in Korea. A lawyer set up the single member LLC(education service business)in PA for my client. Someone will be working for the business while my client is in Korea. How is my client taxed ? does he file 1040NR or 1040 ? If he receives only dividend, dose he report only dividend received instead of schedule C ? I asekd some CPAs but they were not sure about it.

Riley2 (talk|edits) said:

14 June 2009
Unless the client has a green card, file Form 1040NR.

Miinmansae (talk|edits) said:

14 June 2009
thank you for your quick answer. dose he enter dividend income in1040nr or file schedule c ? The client does not working but invests on the business

Riley2 (talk|edits) said:

14 June 2009
Not sure what you are asking. Are you saying that he will be receiving a dividend from the LLC?

RoyDaleOne (talk|edits) said:

14 June 2009
Reg. 301.7701-2

The single member LLC is a disregarded entity and a Schedule C is filed. See Regulation 301.7701-X.

Miinmansae (talk|edits) said:

14 June 2009
Hi Riely2,

I really appreciate on your answer. Actullay he does not work but invest 100% portion on the business as a single memember and someone is hired for the business. In this case, how do we handle with gain/loss from the business ? Is it okay that he files 1040nr with sch-C even as he is not working for the company ?

RoyDaleOne (talk|edits) said:

14 June 2009
"Is it okay that he files 1040nr with sch-C even as he is not working for the company ?"

It is okay to file 1040NR with Schedule C.

It is required that a Schedule C be filed with the 1040NR to report the activities of an single member LLC, that is orgainized in the U. S., and that is engaged in a trade or business that is effectively connected to the United States of America.

Miinmansae (talk|edits) said:

14 June 2009
Hi Roydaleone, I appreciate on your advise.

Riley2 (talk|edits) said:

14 June 2009
Agree with Roy -- you must report this income on Schedule C (not subject to SE tax).

However, the income should be reported on Form 1120 if the taxpayer makes an election to be taxed as a corporation.

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