anepcar
Level 2
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I have a client who is converting his LLC in to a C Corp by checking the box for tax purposes only. New share holders will be foreign corporation . If the company does not have any dividends in the current year will the foreign shareholder need to file an 1120f?

They are under the US and MX treaty so their dividends would be taxed @5% instead of 30% once there are any dividends to report. The US Corp will be the withholding agent once there are any dividends to distribute, and file all 1042s forms as need.

We are currently applying for EIN for the foreign corporation that is the shareholder in the US Corp, and filing their 4-8BEN-E with the US Corp.

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