LLC owned by an Australian Family Trust - tax return questions

3 Replies

Hi BP Community.  I have a CPA but there seem to be a few questions around which tax return forms to file regarding my particular situation.  So I thought I'd put it out there to see if the BP community could bring some clarity to the situation, especially if your an Aussie with the same setup or a tax specialist who understands non-resident requirements.  

We have a LLC which is owned by our Australian family trust. I'm the LLC member/manager. The LLC has an EIN. Our primary business is real estate investing.

Come tax time our understanding is that we'd file a 1040NR.  Also believe we have to complete the 1040 schedule E for the RE investing.  Is it correct that given we've got an EIN we don't need to submit the W-8ECI? Do we also need to complete a 1041 for our Australian trust or is that only for US trusts?

Thanks in advance.

  

In your post, you say the LLC is owned by an Australian Family Trust (foreign trust), but that you, individually are the member of the LLC? I presume this is a multi-member LLC, with the foreign trust and you, individually as members? The LLC may be subject to partnership withholding, depending on the ownership structuring.

At any rate, the Foreign Trust is likely subject to an annual IRS Filing, Form 3520. Form 1041 is generally not filed for Foreign Trusts. A full set of the facts would be needed to make an accurate determination.

Sounds like you might be in need of a new CPA who can advise you accordingly.

Hi Lance. Thanks for the reply. Sorry I made a mistake in my description of the structure. I'm the manager of the LLC while the Trust is the only member and owner of the LLC. I'm the director of the trustee of the trust. Thanks re confirming that the 1041 is not filed for foreign trusts. That's what I thought.

The 3520 seems to only be for US persons interacting with a foreign trust so that won't apply to us.

Lance do you know where the 871 (d) exemption is entered?  I heard from another Aussie investor that this was missed on their return but don't remember which form this is on.

We have another LLC which has myself and my wife as members/managers/owners. Again I believe we'll have to do a 1040NR and 1040 with sched E. But I take it there will also be a 1065 required, is that right?

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