How does a out of country investor get a tax ID

Question

Hi,

I am in the process of purchasing property in Atlanta and I am an out of country investor. I am purchasing a rental investment SFH.  I have 3 questions:

1) How do I acquire a US tax ID as an individual ?

2) For only one SFH in which I will rent do you recommend an LLC or safe to keep in individual name?  What exactly is my liability as an owner? Might be a long list...

3) Can I use my online brokerage account as my account to send rent payments and wire money to Property manager? It is the Bank of Omaha that is used  throuh them.

Thanks
Peter

Bill Walston · Answer

Your LLC will need its own EIN.

In order to obtain your personal ITIN number, file Form W-7 Application for IRS Individual Taxpayer Identification Number.  (Get a copy here http://www.irs.gov/pub/irs-pdf/fw7.pdf.)

The registered agent for your LLC should be able to open up a checking account for you.  That being said, are your planning to use a property manager?  If so, do you actually need a US bank account?

Alex Hart · Answer

Hi Peter,

It would be in your best interest to contact a real estate attorney in the Atlanta area and ask them these questions. They would be able to help you out and make sure you're protected. Sorry I cant be more help.

Steven Hamilton II · Answer

James Hutchinson,

That would depend upon your situation; however, typically it is not too bad in most situations.

James Hutchinson · Answer

Interesting topic. It's not too hard to get a US tax ID.

Mike Jakobczak · Answer

register your LLC and get your EIN number well doing this.

With your EIN number you can set up all your business bank accounts.

Once you are collecting rent, you can apply for your ITIN number, by filling out w-& forms.  You can get that form off of IRS.com

You want to get ur ITIN paper work started since it may take several weeks to process.  Just in case you sell your properties, you want to make sure you have all your paperwork organize so your money doesn't get tied up.

But consult an professional with all of this. But hope it helps!

Ivan Munoz · Answer

Peter,

No problem, always glad to help. Yes, that is a good idea, those were just the steps to follow in Illinois for a Mexican couple. Maybe there is something simpler between Canada-U.S.

If you can keep us updated so we can all know how it works.

Best,

Ivan Munoz

Chris Martin · Answer

Canadians buy Myrtle Beach, SC property all the time. I'm sure they buy in Savannah, GA too. They can and do hold title in their name. I don't think this is a big issue. Shouldn't cost a dime more from an attorney because you are out of the country.

Peter Seely · Answer

Hi Ivan,

Thank you for providing the steps.  I think I need to get some professional help regardless, i just wanted to have an idea what I need when I go in there.

Great tips.

Peter

Ivan Munoz · Answer

Peter,

Here is what a friend of mine did in Illinois in regards of this matter.

It is usually in your best interest to have a Manager Managed LLC, that way the company carries with all responsibility. As well as being your best option instead of the S corp(you cannot open an S corporation in Illinois being a non citizen)

-First you open your LLC
-Once you registered your LLC you will receive it's ID number (You will need this further on to open the acct)
-After this you need to get your ITIN (file taxes for this) or you can partner with a citizen.
-The previous step is for you to obtain the comany's EIN.
-after obtaining the EIN you can open the bank acct, with the company's ID number as well as the EIN

All of this was in Illinois, I do not know if these apply in any way to GA, but I hope it helps. Maybe you will have some more solid questions to ask for the Attorney/Accountant (they did all this with an accountant)

Best,

Ivan Munoz

Peter Seely · Answer

Hi Chris,

Thanks for the tips, great help.  So to confirm, If I open an LLC I need an IEN but will I still need an ITIN for myself and my wife who the income will be passed to or is it wise just to file as an S corp?

Also, How do I open up a US bank account for my LLC when I am out of country?  I thought about trying HSBC since we bacnk with them here.

My final thought was scrap the LLC and just purchase the appropriate insurance and Umbrella and use my online brokerage account that is based in the US to collect rents etc.

Thoughts?

Peter

How does a out of country investor get a tax ID

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