Help me complete Form 5472, Foreign Owned Sole Member, Delaware LLC

[joystickstar]

Hello, I have an LLC in Delaware (I am the sole owner and foreigner). I do affiliate marketing. The LLC is not US engaged. The only US payer I have is Amazon INC (Amazon affiliates USA).

I've been watching this video about filling out the 5472 form

and I'm not clear on how to fill out fields 1f and 1h of Part I

nor the attachment referred to in Parts V and VI.

I use my LLC as my personal bank account. I make cash withdrawals and personal expenses with the card. I never transfer money to another bank account.

What should I put in capital contributions and capital distributions? And in fields 1f and 1h?

Thank you.

 

[JackAlabama]

Hello, I have an LLC in Delaware (I am the sole owner and foreigner). I do affiliate marketing. The LLC is not US engaged. The only US payer I have is Amazon INC (Amazon affiliates USA).

I've been watching this video about filling out the 5472 form

and I'm not clear on how to fill out fields 1f and 1h of Part I
View attachment 6254

nor the attachment referred to in Parts V and VI.
View attachment 6255

I use my LLC as my personal bank account. I make cash withdrawals and personal expenses with the card. I never transfer money to another bank account.

What should I put in capital contributions and capital distributions? And in fields 1f and 1h?

Thank you.

cumulated expenses as distribution unless these have been business expenses.

 

[joystickstar]

cumulated expenses as distribution unless these have been business expenses.

So, for example:

+$2000 affiliate program commission -> business income
-$80 hosting -> business expense
-$20 postal address for the LLC -> business expense

Total net income: $1900

---

$400 cash withdrawal for personal expenses -> capital distribution
$100 purchase of personal clothing -> capital distribution
Left $1400 in the bank account as of December 31st -> capital distribution

$400 + $100 + $1400 = $1900 of capital distribution

The result will be:

Capital contributions: $0
Capital distributions: $1900

Is this correct?

 

[JackAlabama]

So, for example:

+$2000 affiliate program commission -> business income
-$80 hosting -> business expense
-$20 postal address for the LLC -> business expense

Total net income: $1900

---

$400 cash withdrawal for personal expenses -> capital distribution
$100 purchase of personal clothing -> capital distribution
Left $1400 in the bank account as of December 31st -> capital distribution

$400 + $100 + $1400 = $1900 of capital distribution

The result will be:

Capital contributions: $0
Capital distributions: $1900

Is this correct?

looks good to me.

 

[Roo]

@joystickstar is it ok to use the LLC account as a personal account? Asking because I would be interested in doing the same.

 

[Sols]

It is generally a bad idea to commingle personal and company money.

For example, if you ever get audited or something like that, it's going to be a huge pain to determine what was a business transaction and what was personal. It can also be a problem in case you or the company gets sued or faces other legal trouble. With the funds commingled, you might end up in a situation where both the company's and your personal assets are considered the same pot of money.

 

[MarkusCostigan]

What could be the best bank/EMI to receive money from US LLC without too many problems?

 

[daniels27]

@joystickstar is it ok to use the LLC account as a personal account? Asking because I would be interested in doing the same.

As mentioned before, I do not recommend using a Business Bank Account for personal spending. Using a personal account for business is less risky but if you do, I would recommend you to use a dedicated account for it.

I would look into Airwallex, OFX, et.

 

[Roo]

For example, if you ever get audited or something like that, it's going to be a huge pain to determine what was a business transaction and what was personal.

Considering it's a foreign-owned LLC that doesn't pay tax is there a need to distinguish things as you won't claim tax deductions on any of the money?

 

[Sols]

Considering it's a foreign-owned LLC that doesn't pay tax is there a need to distinguish things as you won't claim tax deductions on any of the money?

The IRS might not care but what about your local tax office?

Just get a separate account for your business.

 

[Roo]

@Sols due to territorial taxation no reporting to local tax office (I assume).
The idea was to get a separate business account but to use the card from that account for personal/whatever expenses. That way no transferring to personal account which does not support my current location so it's still with an EU address and it could trigger headaches.