Best US Structure for Syndicated Canadian Investments without IRS Filing for Canadian Investors

[Thomas Beyer]

We need some assistance in structuring or re-structuring a US multi-family investment sourced from Canadian investors, without subjecting the Canadian investors to IRS filings.



Is a US LLP, US C Corp or LLC with a Canadian corporation or LP as the parent the best structure without IRS filings ?



What are the pro's and con's of each of these 3 options?



What about variable rate return bonds issued by US entity ?



The goal here is to minimize US taxes and shift the tax burden to Canada on exit of the US asset with a sizable gain, as US corporate income and capital gains are taxed at over 40%, while in Canada a capital gain is taxed only at half, around 20%.



My understanding is that we either re-structure to an LLP/LLC type of flow-through structure and thus file with the IRS for all Canadian investors, or bite the higher US tax bullet.



Any insight is appreciated.

 

[housingrental]

Thomas: Please explain why you aren't taking this question to an accountant that specializes in this?

 

[jeffjas]

[quote user=ThomasBeyer]US corporate income and capital gains are taxed at over 40%, while in Canada a capital gain is taxed only at half, around 20%


.............Not likely ! Capital gains in the US are taxed at zero percent, 15%, or 20%, depending on your marginal tax bracket.

 

[flyingsquirrel]

On the contrary of what you plan, Canadian investors should file tax return with IRS.

Without US filing, Canadians are subjected to 20% withholding tax regardless of your margin!



Also, when you invest in US, consider more than just returns. Think about liabilities. Definitely go for LLC, not LLP.



It is good to understand more about LLC and LLP here.

Canadian invest in US