QUESTION: As an owner of a foreign owned U.S single member LLC, I understand that as I do not conduct any business in the US, I am not required to report income and expenses on the proforma Form 1120 and Form 5472. Is this correct?
EXPERTS ANSWER:
Yes, your understanding is correct. As the owner of a foreign-owned U.S. single-member LLC that does not conduct any business in the U.S., you are not required to report income and expenses on the proforma Form 1120 or Form 5472. These forms are designed primarily to report transactions with related parties, not to detail regular income and expenses.
However, should any of your income be potentially subject to U.S. tax, different forms need to be utilized:
- For foreign individuals: The appropriate form is Form 1040-NR.
- For foreign corporations: The correct form is Form 1120-F.
It’s crucial to consult with a local accountant in your country of residence to verify your tax responsibilities. Additionally, consider the tax implications at the state level in the U.S., as each of the 50 states may have different requirements concerning sales tax, use tax, franchise tax, state income tax, and gross receipts tax.
For comprehensive insights and to ensure all your tax obligations are met accurately, explore premium options available through expert consultations. Speak directly with a CPA to clarify any specific concerns or complex situations regarding your tax status.
