Wednesday, April 11, 2007

Seed Money

Douglass Belkin of The Wall Street Journal reports that Canada is changing its tax rules to extend a tax break to limited-liability corporations.

Because LLCs are excluded from a 1980 U.S.-Canada tax treaty the profits they generate are subject to taxation in both countries. As a result, the partners in LLCs are generally unwilling to invest in Canada. Canadian Prime Minister Stephen Harper is now seeking to amend the treaty to include LLCs and grant them tax relief in Canada.
U.S. private equity firms often partner with LLCs or are formed as LLCs -- or Limited Liability Corporations.

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