QUESTION: I have just established a new foreign-owned single member LLC and there are no reportable transactions yet, nor have I opened a bank account for it. Do I still need to file the Proforma 1120 and Form 5472?
EXPERTS ANSWER:
If you have recently established a foreign-owned single-member LLC in the United States and there appear to be no business transactions yet, you are still obligated to file specific forms with the IRS. For the first year, the IRS requires that you submit a Proforma 1120 along with Form 5472. This requirement exists because the initial funding of the LLC, typically derived from personal funds of the owner to cover formation costs, is recognized as a reportable transaction. This investment demonstrates the economic activity necessary to establish your business presence, which must be documented.
It’s crucial to understand that these forms are not primarily used for tax assessment on any income but are required for informational purposes to disclose transactions between the foreign owner and the LLC. Even if no revenue has been generated or no bank account has been opened, this initial contribution forms the basis for these filings.
For detailed guidance and to ensure compliance with all U.S. tax regulations, particularly if this is your first venture into establishing an LLC in the U.S., consider consulting with a CPA who specializes in international business operations. They can offer you personalized advice and help navigate the complexities of tax obligations effectively.
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