Any Canadians investing in U.S Real-Estate Syndicates?

[Ken Donnan]

Hi All,

I am a Canadian - recently I have been doing a fair bit of research on investing in an American real-estate syndicate through a LLC.

It seems like a good place to put some capital for a passive return, however, the tax implications on investing cross-border are very vague and at times, confusing - many articles I read on the tax laws state that there may be a "double-taxation" situation for Canadians on any income produced through an American LLC.

Obviously, the first being to pay the IRS a certain percentage on the gross amount and the second being to pay the Canadian government on the gross amount AS WELL - not the "after U.S tax" amount, from my limited understanding this has something to do with the fact that the Canadian government doesn't recognize an American LLC as a legal corporation and therefore any taxes paid on income produced through the LLC are not in any way recognized or credited after the income comes back to Canada.

Other articles claim that there are “work-arounds” to avoid this situation, but they are very vague in nature - I brought this to the attention of my CPA, unfortunately he doesn’t have much experience with cross-border investing and wasn’t much help.

I know most people here are Americans, however, if anyone has any experience with cross-border investing or any information that could help it would be much appreciated!

Thanks!