H1B Visa Holders and L1 Visa Holders

Ganesh Krishnamurthy on

Wanted to know if Green Card Holders, EAD Holders, H1B Visa
Holders, and L1 Visa are allowed to be part of an Investment
Club, and are there any special regulations while filing
taxes? Many in these categories have expressed interest to
join the club

John W Ranby Trustee PGM Cariboo Trust on

I can speak only about green card holders specifically, for
whom there would be no immigration-related issues to being a
partner. However, I doubt there would be any
immigration-related issues for individuals in the other
categories as well. Prudence would dictate that the
individual should understand the conditions and restrictions
of their specific immigration status.

Other than residents in countries that the US government has
put restrictions; e.g. Iran, Syria, etc, foreigners are
generally able to invest from their homeland in US
businesses and securities without any immigration status in
the US.

Obviously, the person will need a SSN or TIN to create a K-1
for US and state tax reporting.
What tax consequence the non-citizen partner would face from
their homeland would depend on the laws of that country and
any tax treaty between it and the USA.

Jack Ranby, Treasurer
Grants Partners Investment Club

ira smilovitz on

Unfortunately, Jack Ranby's answer is misleading in parts as it addresses immigration issues, not tax issues.

Green card holders are treated just like US citizens for tax purposes so there would be no problem having them as members of your club. That's the extent of the good news.

An EAD is an employment authorization document. It has no relevance to the issue of membership in an investment club or taxation.

All members of a club must have a US Tax Identification Number (SSN or ITIN). Visa holders (that is, non-citizens who do not have green card status) have distinct tax issues depending on their visa type, whether they are tax (not legal) residents of the US and/or whether their home country has a tax treaty with the US. These tax issues can impact the club as well as the members. In the absence of a tax treaty that specifies something different, the club will be required to withhold 30% tax on income it receives through its investments, regardless of whether any cash distribution is made to the member. The club will have to remit the withheld tax on a variable schedule based on the running total of the amount of tax withheld and file periodic reports with the IRS. Penalties for late payment/filing are as much as 5%/month. Understanding the intricacies of international taxation is a specialized area of tax practice. It is well beyond the scope of services that bivio can provide to its customers..

Ira Smilovitz, EA

On Thu, Jul 30, 2020 at 11:30 AM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:

I can speak only about green card holders specifically, for
whom there would be no immigration-related issues to being a
partner. However, I doubt there would be any
immigration-related issues for individuals in the other
categories as well. Prudence would dictate that the
individual should understand the conditions and restrictions
of their specific immigration status.

Other than residents in countries that the US government has
put restrictions; e.g. Iran, Syria, etc, foreigners are
generally able to invest from their homeland in US
businesses and securities without any immigration status in
the US.

Obviously, the person will need a SSN or TIN to create a K-1
for US and state tax reporting.
What tax consequence the non-citizen partner would face from
their homeland would depend on the laws of that country and
any tax treaty between it and the USA.

Jack Ranby, Treasurer
Grants Partners Investment Club

Larry Reno on

Ira,

It is GREAT to have you Club_Cafe!@!

Larry Reno

President

Georgia Chapter of BetterInvesting

-----Original Message-----
From: ira smilovitz via bivio.com <user*2883400001@bivio.com>
To: club_cafe@bivio.com
Sent: Fri, Jul 31, 2020 7:56 pm
Subject: Re: [club_cafe] Re: H1B Visa Holders and L1 Visa Holders

Unfortunately, Jack Ranby's answer is misleading in parts as it addresses immigration issues, not tax issues.

Green card holders are treated just like US citizens for tax purposes so there would be no problem having them as members of your club. That's the extent of the good news.

An EAD is an employment authorization document. It has no relevance to the issue of membership in an investment club or taxation.

All members of a club must have a US Tax Identification Number (SSN or ITIN). Visa holders (that is, non-citizens who do not have green card status) have distinct tax issues depending on their visa type, whether they are tax (not legal) residents of the US and/or whether their home country has a tax treaty with the US. These tax issues can impact the club as well as the members. In the absence of a tax treaty that specifies something different, the club will be required to withhold 30% tax on income it receives through its investments, regardless of whether any cash distribution is made to the member. The club will have to remit the withheld tax on a variable schedule based on the running total of the amount of tax withheld and file periodic reports with the IRS. Penalties for late payment/filing are as much as 5%/month. Understanding the intricacies of international taxation is a specialized area of tax practice. It is well beyond the scope of services that bivio can provide to its customers..

Ira Smilovitz, EA

On Thu, Jul 30, 2020 at 11:30 AM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:

I can speak only about green card holders specifically, for
whom there would be no immigration-related issues to being a
partner. However, I doubt there would be any
immigration-related issues for individuals in the other
categories as well. Prudence would dictate that the
individual should understand the conditions and restrictions
of their specific immigration status.

Other than residents in countries that the US government has
put restrictions; e.g. Iran, Syria, etc, foreigners are
generally able to invest from their homeland in US
businesses and securities without any immigration status in
the US.

Obviously, the person will need a SSN or TIN to create a K-1
for US and state tax reporting.
What tax consequence the non-citizen partner would face from
their homeland would depend on the laws of that country and
any tax treaty between it and the USA.

Jack Ranby, Treasurer
Grants Partners Investment Club

Ganesh Krishnamurthy on

Thanks, Ira for your response