Hi folks,
I am considering further purchases in the US and have a few questions, hoping you can give your two cents worth.
Is an EIN number also known as a Federal Tax ID number?
Can anyone recommend a company to setup an LLC for me?
Can the LLC borrow money to finance deals? If so, can anyone recommend a bank.broker?
If I lodge a tax return in the US do I need to pay the flat rate of witholding tax of 30% (I’ve read that expenses cannot be deducted in this instance) or do I pay the rate a normal LLC would and pay the difference to the ATO when I bring the money back to Oz?
Would it be wise to have my Oz Trust or my indiviual name as owner of the LLC?
Heavy stuff, I hope you can help!
Thanks
Tim
Hi there, I spoke to a tax expert today about CGT obligations on US property and she told me that I am only entitled to pay US taxes at the 15% rate
creativity is more valuable than your next IP purchase
Hey Tim,
glad things are going well for u!
An EIN is an Employers indentification no ,which is for yr company tax ID number not personal.
An LLc can borrow money to finance deals but often it is harder.You need to just ask the broker before using them.
You dont need to pay witholding tax ,just fill out the form and lodge it..(i cant find one here at the moment but from memory it is a w8?)I have an LLC I am thinking of selling but it is filed in Ny and i believe the filing fees are higher there so may be more costly for u as opposed to setting one up in texas (where yr investing)(pm me if u need)
all the best man
lukeLuke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
Thanks guys, your info is invaluable.
I have been advised that my LLC would be taxed at the rate of 15% which CANNOT be used as a tax credit when bringing the money back to Oz. I can otherwise elect to pay the flat rate of 30% witholding tax instead which would be a tax credit and then bring the money back and pay tax at the rate of Marginal Rate% minus 30%.
Luke, I assume that by completing a W8 form I would be acting with the intention of NOT bringing the money back to Oz, is this correct?
Tim
Tim
Any customer that is not a US legal resident or US citizen is considered a non-US person by the US Internal Revenue Service (IRS) and is required to complete a form W-8 certifying their country of tax residence.
The W-8 form must be updated every three years unless a customer has applied for a US Tax Payer ID from the IRS and has specified the tax payer ID on the W-8, in which case the W-8 does not need to be updated. Generally, tax withholding treaty rates are negotiated between each country for withholding on dividends. However, for those clients that do not update their W-8, or provide no W-8, an added withholding penalty will apply.
On the finance front you will find financing in an LLC a lot harder and more expensive than purchasing in your sole name and then deeding the property to the LLC after closing.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Thanks Richard,
Luke says that witholding tax is not payable with a W8 form but if a W8 form states I’m a non-US citizen then doesn’t this mean that witholding tax is payable as part of the tax treaty between Oz and the US?
Tim
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