We provide here a written summary of answers provided by the Department of Revenue to the committee at periodic question and answer sessions. These documents are classified as Revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on a specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.
Q&A with the Pennsylvania Department of Revenue
Scenario: An IRA holds 100% of the interests in a LLC, which in turn holds rental / investment property in Pennsylvania.
An individual has a self-directed Individual Retirement Account. The IRA holds 100% of the interests in a limited liability company, which in turn holds rental / investment property in Pennsylvania. For Federal purposes, the LLC is disregarded as an entity and the rental / investment property is deemed to be owned directly by the IRA. Would the LLC be subject to Capital Stock / Foreign Franchise Tax?
Yes, the LLC would be subject to the Capital Stock/Franchise Tax.