FAQs About Tax Responsibility When Set-up with KMAGB.com

Financial Crimes Enforcement Network (FinCEN) within the U.S. Department of Treasury has issued a final rule requiring certain entities to file with FinCEN reports that identify two categories of individuals: the beneficial owners of the entity, and individuals who have filed an application with specified governmental authorities to create the entity or register it to do business. These regulations implement Section 6403 of the Corporate Transparency Act (CTA), enacted into law as part of the National Defense Authorization Act for Fiscal Year 2021 (NDAA), and describe who must file a report, what information must be provided, and when a report is due. According to FinCEN, these requirements are intended to help prevent and combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activity, while minimizing the burden on entities doing business in the United States.

YES- you are responsible for and must register your WY LLC to keep it in good standing with the Department of Treasury. You must register your entity so you are not fined. You do not need an attorney nor CPA to register your LLC, you can do it on your own.
Check out the steps here: https://www.fincen.gov/boi

The rule is effective January 1, 2024. Reporting companies created or registered before January 1, 2024, will have one year (until January 1, 2025) to file their initial reports, while reporting companies created or registered after January 1, 2024, will have 90 days after creation or registration to file their initial reports. Once the initial report has been filed, both existing and new reporting companies will have to file updates within 30 days of a change in their beneficial ownership information.

For more information and resources related to this federal requirement, please visit FinCEN’s website.

Information: https://www.fincen.gov/boi
Fact Sheet: https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet
Contact: https://www.fincen.gov/contact

🚨Please note that with this structure we are not worried about playing games of anonymity. We don’t want to cause issues that a court may challenge because with this structure we can show all assets and there will be no equity for the plaintiffs to go after.

For tax purpose the LLC is usually set up as a disregarded entity. Meaning income and expenses flow through to the owner(s) for tax purpose. You make a periodic payment to the LLC as per the promissory note and you get a tax deduction. But the payment you made is now income to the LLC, which you own and it ends up flowing through to you, making the structure tax neutral. “Disregarded entity” is a legal and tax term meaning all income and expenses flow through to owner(s) of the LLC making it a tax neutral structure. In any state, any one person can own an LLC and it can be a disregarded entity for tax purposes. In a community state a husband and wife could own the LLC 50/50 and the LLC could be a disregarded entity. States in which community property laws apply: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington State and Wisconsin. (Additionally the state of Alaska and the US Territory of Puerto Rico give you a choice if you wish to hold assets in a community property). In non-community state a husband and wife could own the LLC 50/50 but the LLC would not be considered a disregarded entity, it would be a partnership. But even then, it is taxed as a pass through to the partners with a K1 to each of them. In any state if the owners are not married then the LLC would not be considered a disregarded entity, it would be a partnership, meaning the profit and loss would just flow through to each of the respective members via a K1. Each member would then report his/her share of profit or loss on their respective annual personal tax returns in their respective state. Ideally in non-community states and in non-marital partnerships, each of the husband and wife or each of the Partners should set up his/her own LLC. Hence each LLC entity would then be considered a disregarded entity and income as well as expenses would flow through to each owner of each LLC making it a hassle free, tax neutral entity.