First time poster here, I am looking to start virtual wholesaling properties in Seattle and I am currently based in Toronto. I was wondering if anyone knows if it would be best practice to set up a sole proprietorship or corporation for this. Also would wholesaling in the US be allowed without being a US citizen? Would I have to pay a US tax and Canadian tax on my profits?
Please let me know if anyone has some experience with this.
Note that CRA does not recognize LLC as a legal entity. Setting up any business opens you to a liability. I would suggest a C-corp in your case from both protection and taxation perspectives. Canada will tax you on income that you make world-wide. However if income is earned within a Corporation and does not get paid out to you as an owner, then CRA and IRS won't be taxing you on a personal level at all. You can re-invest that money in the business.
Lots of personal details to consider in matters like this. Better talk to a couple of cross-boarder lawyers and accountants to figure out what works best for you. Bigger Pockets is just a forum for directional recommendations, its not a place to get legal and financial advice on your own personal level.
(LLC, S-Corp or C-Corp) Corporation with EIN number. US bank account for the Corporation in that state. Canada and US have a free trade agreement plus International citizens and corps just need to pay any state (depending on company formation) and federal taxes each year. Make sure to do your research on fees and cost. No need to be a US citizen. I would use an online banking platform (Mercury, Relay, Brex, Novo, etc...) for the company bank account. United States and Eritrea are the only countries on the planet that tax their citizens where ever they make income so you might not have to worry about double taxation being a Canadian Citizen. Hope this helps you out but do your homework. I heard you can also wholesale in Canada. No need to cross the border. @D Kirk
I'm the same boat as you. I started recently wholesaling properties in US based in Toronto. I didn't conclude any deals yet but you can wholesale anywhere as long as it allows you to do it. Some states require a real estate license to do. I've seen people wholesaling US properties from Brazil, Africa, London... About taxes, I'm not so sure but I believe we will pay the taxes in Canada since we reside here and this will be a source of income as an entrepreneur.
I opened a LLC on legalzoom.com the price will depend on where you want your business located. I believe Florida is cheaper.
Note that CRA does not recognize LLC as a legal entity. Setting up any business opens you to a liability. I would suggest a C-corp in your case from both protection and taxation perspectives. Canada will tax you on income that you make world-wide. However if income is earned within a Corporation and does not get paid out to you as an owner, then CRA and IRS won't be taxing you on a personal level at all. You can re-invest that money in the business.
Lots of personal details to consider in matters like this. Better talk to a couple of cross-boarder lawyers and accountants to figure out what works best for you. Bigger Pockets is just a forum for directional recommendations, its not a place to get legal and financial advice on your own personal level.