Sole foreign proprietor of an LLC in the US? The Obama administration has left a surprise for you! Starting fiscal year 2017, a foreign (non-American entity) sole owner of an LLC will have to provide the US tax authorities with form 5472, an informative form reporting ownership of an...
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EIN – Employer Identification Number An EIN (Employer Identification Number) identifies entities for tax purposes. You may use Form SS-4 to apply for an EIN. The EIN is a nine-digit number (for example, 12-3456789) which assigned to: Sole proprietors, corporations, partnerships, estates, trusts, and other entities for tax filing...
Like-Kind Exchange – IRS Sec 1031 Section 1031 of the IRC allows the exchange of similar asset held for investment purposes. It is imposed upon real estate investments and may be used as a means of postponing capital gains tax. The section is void in case the investor is...
Taxation in Different States in the USA Most US states employ tax systems that slightly vary in single percentages of the net profit. Sums may be deducted according to the federal tax, and are also recognized for offset with Israeli income tax. In addition, several cities may impose municipal...
ITIN – Individual Tax Identification Number An ITIN (Individual Tax Identification Number) is issued to any individual in order to identify him or her when facing the US tax authorities. The US tax authorities view the individual as an “unrecognized”. In order to obtain this number, form W-7 must be submitted....
Foreign Companies Taxation – Form 1120F A foreign company investing in the US, either directly or via American entities, is subject to the US company tax; It is progressive, and changes according to income level. The company is subject to taxation from the “first earned dollar”, unlike an individual...
Partnership Taxation – Form 1065 & K1 A partnership is considered a pass-through entity for tax purposes, meaning that the liability is transferred to the holding partners. Partners are categorized as either “general” or “limited” according to their role in the partnership. In most cases, the partnership is required...
Taxation of Individuals – Form 1040NR Unlike Israel, where tax for passive income is imposed at predetermined rates for each type of income, In the US such income will be taxed according to progressive tax rates. Moreover, the US exempts net profits of up to $4,050, according to the...
FIRPTA withholding In 1980 the US initiated FIRPTA (Foreign Investment in Real Property Tax Act). It states that the US will enforce a capital gains tax on sales of properties within its boundaries. Additionally, the US will not sign a tax treaty with any country disregarding this section. This act...
Forming an LLC in United States Each US state has its own LLC laws. In order to form an LLC entity, an Article of Organization must be submitted along with payment. The article will include full details such as: business name, address, representatives, and members. More complex structures require...