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Can an LLC taxed as an s-Corp have members that are not us citizens/us residents?

cherylgolich
Level 2

I have found documentation than an LLC can have non-US resident members but its also documented that non-US residents can not be members of an s-Corp.

What are the rules for an LLC taxed as an s-Corp?

Appreciate any insight that an be provided.  

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4 Comments 4
sjrcpa
Level 15

LLC taxed as an S Corp has to follow S Corp rules . For income tax purposes it is an S Corp.


Ex-AllStar
cherylgolich
Level 2

thanks - that's what I thought but their previous CPA filed to have the LLC taxed as an s-Corp with 4 of the 7 members as non residents. 

TaxGuyBill
Level 15

@cherylgolich wrote:

thanks - that's what I thought but their previous CPA filed to have the LLC taxed as an s-Corp with 4 of the 7 members as non residents. 


Which pretty much voids the S-election, so it is now taxed as a C-corporation.

I think there is a provision to keep the S-election if immediate action is taken to correct the situation, but seeing as how 4/7ths of the members are affected, that doesn't seem like it will work for your clients.

sjrcpa
Level 15

They can live outside the US, but they cannot be Nonresident Aliens. They must be US citizens or Resident Aliens.

"nonresidents" doesn't tell us which you mean.


Ex-AllStar