multi-member LLC adding US citizen living abroad

SideShowBob · Jun 13, 2009

I run a multi-member LLC used for trading (currently with a whopping total of 2 members) and would like to add a third member. However, that member lives in London although they are a US citizen. My thought was simply to add them to the LLC, and they get a standard K-1 form like the other members at the end of the year.

Are there any issues with adding the member because they currently live outside the US?

Ken More · Jun 13, 2009

Quote from SideShowBob:

I run a multi-member LLC used for trading (currently with a whopping total of 2 members) and would like to add a third member. However, that member lives in London although they are a US citizen. My thought was simply to add them to the LLC, and they get a standard K-1 form like the other members at the end of the year.

Are there any issues with adding the member because they currently live outside the US?

This is where you ask that question and expect a reliable reply?
Don't you have an accountant/lawyer ?

SideShowBob · Jun 13, 2009

Quote from Ken More:

This is where you ask that question and expect a reliable reply?
Don't you have an accountant/lawyer ?

I was hoping for people to point me to some resources. Isn't this the free legal advice forum????

RifffRafff · Jun 13, 2009

Quote from SideShowBob:

I run a multi-member LLC used for trading (currently with a whopping total of 2 members) and would like to add a third member. However, that member lives in London although they are a US citizen. My thought was simply to add them to the LLC, and they get a standard K-1 form like the other members at the end of the year.

Are there any issues with adding the member because they currently live outside the US?

US citizens are taxed worldwide. Doesn't matter. IANAL, so check with yours first.

TraderZones · Jun 13, 2009

Quote from SideShowBob:

I was hoping for people to point me to some resources. Isn't this the free legal advice forum????

he just did. he gave you free advice to talk to the right people. Don't you grasp that he is correct? Doing it on the cheap is a poor way to plan or structure an LLC, especially crossing borders.

SideShowBob · Jun 13, 2009

Quote from TraderZones:

he just did. he gave you free advice to talk to the right people. Don't you grasp that he is correct? Doing it on the cheap is a poor way to plan or structure an LLC, especially crossing borders.

Maybe, maybe not. I can't count the number of people who have told me how badly their accountants have f**cked up their taxes over the past few years. Even if you get advice from a lawyer or accountant you should still double check, just because they have a degree/certification or whatever that doesn't mean they know what they're talking about.

Ever hear the one "What do you call the guy who finished last in his class in medical school barely squeaking by with a C- GPA?" You call him doctor.

TraderZones · Jun 13, 2009

Quote from SideShowBob:

Maybe, maybe not. I can't count the number of people who have told me how badly their accountants have f**cked up their taxes over the past few years. Even if you get advice from a lawyer or accountant you should still double check, just because they have a degree/certification or whatever that doesn't mean they know what they're talking about.

Ever hear the one "What do you call the guy who finished last in his class in medical school barely squeaking by with a C- GPA?" You call him doctor.

I have used accountants without any issues. You start with ensuring they are a CPA, you have an intial contact, and get some references. and you check the BBB to see if there complaints.

But any accountant is far better than anonymous posts on a board. It is like someone charged with armed robbery, who so mistrusts lawyers, that he hires someone off the street to represent him.

Ms Varima-Garch · Jun 13, 2009

Quote from SideShowBob:

I run a multi-member LLC used for trading (currently with a whopping total of 2 members) and would like to add a third member. However, that member lives in London although they are a US citizen. My thought was simply to add them to the LLC, and they get a standard K-1 form like the other members at the end of the year.

Are there any issues with adding the member because they currently live outside the US?

your starting point should probably be - go to the secretary of state/corporations web site, where the llc is registered and send them an e-mail, look up any info on that site.

propseeker · Jun 13, 2009

Quote from SideShowBob:

Are there any issues with adding the member because they currently live outside the US?

no, there are no issues.

if he was a foreigner there might be some issues tax wise for him, but since they're a US citizen, there is no problem.

Diamond Geezer · Jun 13, 2009

why not ask the Brights, they must have encountered this.

A second line of enquiry would be to Bob Green of Green Trader Tax. He will definitely know the answers (for a fee).

My understanding is that in any LLC, trading or otherwise that the tax flows through to the members by dint of their K-1.

You just issue your offshore guy a K-1 like you would if he was US based. His taxes are his concern thereafter no the LLC's.

By the way, the UK guy will be liable just as if he were resident in the US but he may ned to pay the UK taxes too and then look to the UK-US tax treaty for offset/relief. But this is his concern not yours.