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Hello David;
My son is a Canadian citizen married to a U.S. citizen and presently
awaitring his green card. He has the interim Employment Authorization
card and works in Houston.
My daughter is a Canadian citizen living and working in Canada.
I want to incorporate an active business in Canada to service the
International sales ( including the USA) of a product that I
manufacture in Canada and export Internationally.
What ramifications are there for accounting, income tax, and reporting
if my son and my daughter each own 50% of this company??
Thank you,
JXXXXXX
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david ingram replies:
If he is not working inthe company and not going to get anything out of it, you are complicating his tax return and that of his wife beyond comprehension.
He will have to file a form 5471 to repor the internal earnings of the corporation. We would charge a minimum of an extra $1,200 for this form which takes the internal earnmings and cash flow of the Canadian Corporation and converts it to the equivalent of a US "S" corporation and puts it on your son and his wife's joint tax return in the. It creates flow-through profits on his US tax return for Retained earnings in Canada.
DO NOT DO IT without you (and your son AND his wife) sitting down with Sonja Clark CPA CA LLB in our office in West Vancouver. Most of my questions come from thousands of miles away. You just live down the street from my office.
By the way, the penalty for your son owning 50% of the Canadian company and NOT filing form 5471 is ***** $10,000 for the first 90 days and $10,000 every month to a maximum of $50,000 per year of tax retrurn.****** That penalty is just for owning the shares and not filing the form. It does not matter if the company was active or made a profit or lost money.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from "ask an income tax and immigration and bankruptcy expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
income tax wizzard guru advisor specialist consultant taxman Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Taxman and Tax Guru Your name has been added to our email list because of an enquiry we have received, we may not answer your question but
another similar question will be as we lump them.
You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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