Do foreign limited partners in LP have to pay capital gain tax?

Discussion in 'Taxes and Accounting' started by bigmonkey, Jan 18, 2010.

  1. bigmonkey



    If I setup a onshore fund(LP) which trades stock only and some of the limited partners(investors) are foreign citizens, do they have to pay capital gain tax?

  2. I guess the client only needs to pay his home country if his country has tax treaty with US. but I am not a CPA, my opinion does not count anyway.

  3. heech


    Keep in mind foreign citizens with US residency are still "US persons", and pay the same taxes all US citizens do.

    Non-US persons, however, wouldn't even have a social security number or EIN. They certainly would not pay capital gains tax to the United States government. However, I believe your LP still has to report their gains in your annual filings... and this is why many foreign investors prefer off-shore funds, where no one has any reporting responsibilities at all recording their gains.