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UK/US tax question on US rental propery in an LLC

If UK Res buys a rental property in an LLC and opts for it to be taxed as a C Corp

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My client wants to buy a rental property in Florida (good returns).

He is planning on buying it over there via an LLC. Normally the profits would pass through to the individual. In which case there wouldn't be much tax to pay because of the mortgage interest relief rules and depreciation is allowable over there. Hence he would pay tax in the UK and take a credit for any US taxes (small).

My questions is: it is poossible to elect in the US for an LLC to be taxed as a corporation, so the profits do not flow through to the owner. I am guessing if after tax profits stays within the LLC, there is nothing to report in the UK.

I intend to send him to a UK based US tax specialist, but has anyone had a similar situation?


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By Vile Nortin Naipaan
26th Jun 2019 15:17

The US "checkbox" regime treatment is irrelevant to the UK treatment of whether the LLC is opaque or transparent, and LLCs are a complicated subject, since there are potentially 52 different variants.

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By Matrix
26th Jun 2019 23:27

Conversely, if the LLC is treated as a corporation in the US but transparent in the UK then you get no DTR.

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