USA Corporate structure for US/CA Citizen


Joined
Dec 23, 2018
Messages
2
Reaction score
0
Country
Canada
Current scenario:
•$150,000 CAD yr taxable sole-prop income (Canadian sourced)
•US/CA citizen
•Canadian resident

Wishful scenario:
•Canadian Corp (SBD) tax rate (15%)
•$47,630 Non-Eligible Dividend Salary (6.87%)

Not sure if Canadian Corp is viable because CFC and Subpart F / GILTI tax. With "current scenario" whats the most economical tax strategy? Is a Canadian Corp still advantageous tax wise?
 

kirby

VIP Member
Joined
May 12, 2011
Messages
1,538
Reaction score
212
Country
United States
The good news is at your income level you can afford to hire a tax person to give you tax advice based on your own unique situation.
 
Ad

Advertisements

Joined
Dec 23, 2018
Messages
2
Reaction score
0
Country
Canada
$150,000 is not my income. This is a scenario im asking for advice on potential future income. All I want is to create dialogue on this scenario.

It appears I can deduct Canadian Corp tax (15%) from US subpart F tax liability which would be ordinary dividends. This "works" for lower incomes but gets bad as income increases. Between ~$38,000 - $500,000 USD tax brackets ill be paying 7% - 20% in additional taxes after deducing the 15% Canadian corp FTC.

Subpart F "High Tax Exemption" is 18.9%. Decline the Small Business Deduction for Federal corp taxes the corps tax rate would be 18.5%. If I could increase that >18.9% this could be one solution.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top