International Tax Attorney/CPA

[Joshua Davies]

Are there any tax attorneys/CPA’s on BP with international experience? I am setting up an LLC for rental property investing with 2 partners from the UK. I am under the impression that the LLC must withhold 35% as it has foreign members. However, what happens if we show a passive loss on our balance sheet after deductions and depreciation? Also, how would the members be able to take their draw from the LLC in this scenario? Will the IRS allow members to take draws from an LLC that shows a loss? Would the members also then be taxed again on the draw? I know there is an existing tax treaty between the US and UK but I do not have any detailed knowledge on this. If anybody can help out on this that would be great! Thanks!

[Basit Siddiqi]

@Joshua Davies

You should have the UK investors consult with a CPA to protect yourself. You don't want to provide incorrect advice.

Distributions from a partnership are normally not a taxable event unless the distribution is in excess of the partner's basis in the partnership.

Another thing to be wary about is how the UK will tax their income generated through the US LLC.