QUESTION: As a foreign owner of a U.S. single member LLC, I’m considering investing some of the LLC’s profits in cryptocurrencies. Given that this LLC is a disregarded entity, I’m a non-resident alien (NRA), and I have no effectively connected income (ECI) in the U.S., would any potential profits from these investments be exempt from U.S. taxation?
EXPERTS ANSWER:
As a foreign owner of a U.S. single-member LLC and a non-resident alien without effectively connected income (ECI) in the U.S., your investment in cryptocurrencies presents specific tax considerations. According to U.S. tax law, non-resident aliens who do not spend 183 days or more in the U.S. within the tax year are generally exempt from U.S. taxes on capital gains, which would include profits from cryptocurrency investments.
This exemption means that any capital gains your LLC earns from cryptocurrencies are not subject to U.S. taxation. Instead, these gains may typically be taxed only in your country of residence, depending on local tax laws. It’s important to consult with a tax professional to understand how these laws might apply to your specific situation and to ensure compliance with all relevant tax obligations.
For further clarification and to make informed decisions on your investments, it is advisable to speak with a Certified Public Accountant (CPA) who specializes in international tax law and cryptocurrency investments. Our firm offers expert consultations that can help you navigate these complex tax regulations effectively.
