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Old 07-19-2016, 06:32 AM
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Exclamation Transfer Long Term Liability to Working Capital with Overseas LLC's

The companies are LLC's. Company "A" is registered and located in the United States. Company A has two long term liability on its books from liability "B", supposedly the owner but not confirmed, and liability "C", a company from Taiwan not registered in the United States, or so I have been told. All companies are owned by the same person.

The manager wants me to change the liabilities with companies B & C to working capital. Is this possible? I know definitely that if company C is registered in the US with a different FEIN that this is not allowed. However, the manger says another CPA says it's possible.

Can you please tell me if this allowed or against IRS regulations? I am not familiar with overseas.



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Old 12-31-2017, 09:01 AM
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Old 01-01-2018, 03:32 AM
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The manager wants me to change the liabilities with companies B & C to working capital. Is this possible? ======>I guess you mean long term debt to total working capital ratio; then, basically, it is helpful/possible in determining the degree of reliance by a firm on long-term debt to finance its day-to-day operations by using Long-term debt ? Working capital.However as you said , the LLC owned by the same members is a company from Taiwan not registered in the US. Please read below.


I know definitely that if company C is registered in the US with a different FEIN that this is not allowed. ======>Agreed (In general, different FEIN means different entity.) UNLESS one LLC owns the other LLC from TAIWAN; Often in large commercial real estate transactions, not only will an LLC be a member of another LLC, but a corp may be a member of an LLC who is the member of another LLC. Your LLC can form subsidiaries that also have LLC status. You do this by listing your LLC as the owner of the sub LLC. Your subs with LLC status do not pay taxes. They pass all profits through to the parent LLC, which passes profits to you directly. The only tax paid on the money is your 1040. The consolidated balance sheet also includes foreign subsidiaries. However, it is sometimes difficult to convert the financial statements of a foreign subsidiary back into the parent company's currency. the parentLLC and the subsidiary LLCare separate entities. The sub is not considered a division of theLLC. A subsidiary of a LLC and its parent LLC also have separate tax identification numbers for federal tax purposes.

However, the manger says another CPA says it's possible. ==========>Agreed also UNLESS the US LLC and the TAIWANESE LLC are the two separate entities ,but in my opinion it depends as said.

Can you please tell me if this allowed or against IRS regulations? I am not familiar with overseas.==========>As mentioned above.



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