{"id":4103,"date":"2017-05-23T12:02:12","date_gmt":"2017-05-23T12:02:12","guid":{"rendered":"http:\/\/legalbytes.com\/?p=4103"},"modified":"2022-04-28T20:31:39","modified_gmt":"2022-04-28T20:31:39","slug":"us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs","status":"publish","type":"post","link":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/","title":{"rendered":"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs"},"content":{"rendered":"

– Melinda Fellner Bramwit<\/a>, Partner, Rimon, P.C.<\/p>\n

Changes to US Treasury Regulations Under Section 6038<\/a> of the Internal Revenue Code<\/a> could affect filings for single member LLCs owned by non-US individuals or entities.<\/p>\n

Many non-resident individuals and non-resident entities maintain title to real estate and other assets in single member limited liability companies incorporated under state law in the United States, for a variety of reasons.\u00a0 Under Federal tax law, such an entity is disregarded for tax purposes unless the owner elects otherwise.\u00a0 From a corporate perspective, these limited liability companies can be used to harness assets in an entity separate from the owner, providing a layer of corporate protection and perhaps anonymity for the ultimate owner.\u00a0 These entities are also reasonably simple to form and maintain.<\/p>\n

Changes to U.S. Treasury Regulations effective December 13, 2016, throw a wrinkle into the use of this malleable entity in some circumstances, which can be managed with some planning.<\/p>\n

These changes require that a non-resident owning 100% of a United States limited liability company (\u201cLLC\u201d) file a Form 5472<\/a>, an information return, when certain transactions occur between certain parties (\u201crelated\u201d parties) and the LLC.<\/p>\n

The following example from the regulations illustrates a scenario where this filing would be triggered:<\/p>\n

In year 1, F, a foreign corporation forms and contributes assets to US-LLC, a U.S. limited liability company that is a disregarded entity for US Federal tax purposes.\u00a0 In year 2, F contributes funds to US-LLC, and in year 3, US-LLC makes a payment to F.<\/p>\n

Under the modified regulations, F\u2019s payment to US-LLC as well as US-LLC\u2019s payment back to F are both reportable transactions for which a Form 5472 would be required with respect to US-LLC.<\/p>\n

This is a simple, yet common situation which triggers the filing requirement. It is important to note that this requirement is applicable to tax years of entities beginning on or after January 1, 2017 and ending on or after December 13, 2017 (Note: This is not a typo. The date is the 13th, not the 31st<\/em>).\u00a0 As such, there is a window of opportunity for tax planning to avoid the requirement of this form and if you want to know more or need help, don\u2019t hesitate to contact me, Melinda Fellner Bramwit<\/a>, a partner here at Rimon, P.C.<\/a><\/p>\n

Of course, if you need assistance, you may always contact me, Joe Rosenbaum<\/a>, or any of the lawyers with whom you routinely work at Rimon Law<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

– Melinda Fellner Bramwit, Partner, Rimon, P.C. Changes to US Treasury Regulations Under Section 6038 of the Internal Revenue Code could affect filings for single member LLCs owned by non-US individuals or entities. Many non-resident individuals and non-resident entities maintain title to real estate and other assets in single member limited liability companies incorporated under…<\/p>\n","protected":false},"author":168,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26,50],"tags":[121,227,290,299,321],"acf":[],"yoast_head":"\nUS Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs - Legal Bytes<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs - Legal Bytes\" \/>\n<meta property=\"og:description\" content=\"– Melinda Fellner Bramwit, Partner, Rimon, P.C. Changes to US Treasury Regulations Under Section 6038 of the Internal Revenue Code could affect filings for single member LLCs owned by non-US individuals or entities. Many non-resident individuals and non-resident entities maintain title to real estate and other assets in single member limited liability companies incorporated under...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/\" \/>\n<meta property=\"og:site_name\" content=\"Legal Bytes\" \/>\n<meta property=\"article:published_time\" content=\"2017-05-23T12:02:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-04-28T20:31:39+00:00\" \/>\n<meta name=\"author\" content=\"Joe Rosenbaum\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@JIRLaw\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Joe Rosenbaum\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/\"},\"author\":{\"name\":\"Joe Rosenbaum\",\"@id\":\"https:\/\/legalbytes.com\/#\/schema\/person\/514fe136895b91adcb6ea3ccada80296\"},\"headline\":\"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs\",\"datePublished\":\"2017-05-23T12:02:12+00:00\",\"dateModified\":\"2022-04-28T20:31:39+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/\"},\"wordCount\":413,\"publisher\":{\"@id\":\"https:\/\/legalbytes.com\/#organization\"},\"keywords\":[\"Compliance\",\"Foreign\",\"International\",\"IRS\",\"LLC\"],\"articleSection\":[\"International\",\"Tax\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/\",\"url\":\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/\",\"name\":\"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs - Legal Bytes\",\"isPartOf\":{\"@id\":\"https:\/\/legalbytes.com\/#website\"},\"datePublished\":\"2017-05-23T12:02:12+00:00\",\"dateModified\":\"2022-04-28T20:31:39+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/legalbytes.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/legalbytes.com\/#website\",\"url\":\"https:\/\/legalbytes.com\/\",\"name\":\"Legal Bytes\",\"description\":\"Insights at the intersection of digital and mobile technology, innovation and the law\",\"publisher\":{\"@id\":\"https:\/\/legalbytes.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/legalbytes.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/legalbytes.com\/#organization\",\"name\":\"Rimon, P.C.\",\"url\":\"https:\/\/legalbytes.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/legalbytes.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/legalbytes.com\/wp-content\/uploads\/sites\/3\/2022\/04\/Rimon-O.jpg\",\"contentUrl\":\"https:\/\/legalbytes.com\/wp-content\/uploads\/sites\/3\/2022\/04\/Rimon-O.jpg\",\"width\":200,\"height\":200,\"caption\":\"Rimon, P.C.\"},\"image\":{\"@id\":\"https:\/\/legalbytes.com\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.linkedin.com\/in\/joerosenbaum\/\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/legalbytes.com\/#\/schema\/person\/514fe136895b91adcb6ea3ccada80296\",\"name\":\"Joe Rosenbaum\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/legalbytes.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/14c61c6fa3596a623ff8f34905e9f850?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/14c61c6fa3596a623ff8f34905e9f850?s=96&d=mm&r=g\",\"caption\":\"Joe Rosenbaum\"},\"sameAs\":[\"http:\/\/www.legalbytes.com\",\"https:\/\/www.linkedin.com\/in\/joerosenbaum\/\",\"https:\/\/twitter.com\/JIRLaw\"],\"url\":\"https:\/\/legalbytes.com\/author\/jrosenbaum\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs - Legal Bytes","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/","og_locale":"en_US","og_type":"article","og_title":"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs - Legal Bytes","og_description":"– Melinda Fellner Bramwit, Partner, Rimon, P.C. Changes to US Treasury Regulations Under Section 6038 of the Internal Revenue Code could affect filings for single member LLCs owned by non-US individuals or entities. Many non-resident individuals and non-resident entities maintain title to real estate and other assets in single member limited liability companies incorporated under...","og_url":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/","og_site_name":"Legal Bytes","article_published_time":"2017-05-23T12:02:12+00:00","article_modified_time":"2022-04-28T20:31:39+00:00","author":"Joe Rosenbaum","twitter_card":"summary_large_image","twitter_creator":"@JIRLaw","twitter_misc":{"Written by":"Joe Rosenbaum","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/#article","isPartOf":{"@id":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/"},"author":{"name":"Joe Rosenbaum","@id":"https:\/\/legalbytes.com\/#\/schema\/person\/514fe136895b91adcb6ea3ccada80296"},"headline":"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs","datePublished":"2017-05-23T12:02:12+00:00","dateModified":"2022-04-28T20:31:39+00:00","mainEntityOfPage":{"@id":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/"},"wordCount":413,"publisher":{"@id":"https:\/\/legalbytes.com\/#organization"},"keywords":["Compliance","Foreign","International","IRS","LLC"],"articleSection":["International","Tax"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/","url":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/","name":"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs - Legal Bytes","isPartOf":{"@id":"https:\/\/legalbytes.com\/#website"},"datePublished":"2017-05-23T12:02:12+00:00","dateModified":"2022-04-28T20:31:39+00:00","breadcrumb":{"@id":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/legalbytes.com\/2017\/05\/23\/us-treasury-regulation-changes-impact-foreign-owned-single-member-llcs\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/legalbytes.com\/"},{"@type":"ListItem","position":2,"name":"US Treasury Regulation Changes Could Impact Foreign Owned Single Member LLCs"}]},{"@type":"WebSite","@id":"https:\/\/legalbytes.com\/#website","url":"https:\/\/legalbytes.com\/","name":"Legal Bytes","description":"Insights at the intersection of digital and mobile technology, innovation and the law","publisher":{"@id":"https:\/\/legalbytes.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/legalbytes.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/legalbytes.com\/#organization","name":"Rimon, P.C.","url":"https:\/\/legalbytes.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/legalbytes.com\/#\/schema\/logo\/image\/","url":"https:\/\/legalbytes.com\/wp-content\/uploads\/sites\/3\/2022\/04\/Rimon-O.jpg","contentUrl":"https:\/\/legalbytes.com\/wp-content\/uploads\/sites\/3\/2022\/04\/Rimon-O.jpg","width":200,"height":200,"caption":"Rimon, P.C."},"image":{"@id":"https:\/\/legalbytes.com\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.linkedin.com\/in\/joerosenbaum\/"]},{"@type":"Person","@id":"https:\/\/legalbytes.com\/#\/schema\/person\/514fe136895b91adcb6ea3ccada80296","name":"Joe Rosenbaum","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/legalbytes.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/14c61c6fa3596a623ff8f34905e9f850?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/14c61c6fa3596a623ff8f34905e9f850?s=96&d=mm&r=g","caption":"Joe Rosenbaum"},"sameAs":["http:\/\/www.legalbytes.com","https:\/\/www.linkedin.com\/in\/joerosenbaum\/","https:\/\/twitter.com\/JIRLaw"],"url":"https:\/\/legalbytes.com\/author\/jrosenbaum\/"}]}},"_links":{"self":[{"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/posts\/4103"}],"collection":[{"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/users\/168"}],"replies":[{"embeddable":true,"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/comments?post=4103"}],"version-history":[{"count":1,"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/posts\/4103\/revisions"}],"predecessor-version":[{"id":9370,"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/posts\/4103\/revisions\/9370"}],"wp:attachment":[{"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/media?parent=4103"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/categories?post=4103"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalbytes.com\/wp-json\/wp\/v2\/tags?post=4103"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}