Foreign investors tax liability in a syndicate or a fund.

Tax, SDIRAs & Cost Segregation
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Foreign investors tax liability in a syndicate or a fund.

Victor Lee
Member since 2020 · 33 posts · 10 votes

I have two friends living abroad who want to invest with me. One of them has a green card, and the other does not.

Both are in India now but used to live in the USA.

Assuming I follow all the securities law and regulations, from taxes standpoint, do either one of them have any US tax liability?

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Greg O'BrienBusiness Member
Accountant · Boston, MA · Member since 2019 · 386 posts · 336 votes
4y

@Victor Lee the compliance is a pain. The partnership will have Quarterly withholding requirements at 37% of Effectively Connected US income plus 8804/8805 filings.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
    4y

    The partnership has to do foreign tax withholding for non-residents. They can file a return in the US to get refunds if they don't owe anything. 

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  • Victor Lee
    OP
    Member since 2020 · 33 posts · 10 votes
    4y

    Thanks @Ashish Acharya. Can you say more about the second statement? In what case would they owe something?

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Victor Lee:

    I have two friends living abroad who want to invest with me. One of them has a green card, and the other does not.

    Both are in India now but used to live in the USA.

    Assuming I follow all the securities law and regulations, from taxes standpoint, do either one of them have any US tax liability?

     Of course they both have US tax liability (owe). The green card holder has to file taxes as a resident. 

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  • Victor Lee
    OP
    Member since 2020 · 33 posts · 10 votes
    4y

    Thanks, that makes sense. I figured they are pumping capital into the country so might be excused but that is me being a noob about it. 

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  • Greg O'BrienBusiness Member
    Accountant · Boston, MA · Member since 2019 · 386 posts · 336 votes
    4y

    @Victor Lee the compliance is a pain. The partnership will have Quarterly withholding requirements at 37% of Effectively Connected US income plus 8804/8805 filings.

    1Reply
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