Filing 1040-NR as Non-U.S. Person with LLC Partnership Loss - Schedule K-1 Question

Based on your situation, you DO need to file Form 1040-NR. The key factor isn't whether you had income or losses, but rather that you were "engaged in a trade or business in the United States" through your LLC partnership interest. When you receive a Schedule K-1 as a foreign partner in a U.S. LLC, you're considered to be engaged in U.S. business activity through the partnership, regardless of whether the business was profitable. The partnership loss reported on your K-1 is considered "effectively connected income" (even though it's negative), which triggers a filing requirement. Filing is actually beneficial in your case because you can document these losses, which might be carried forward to offset future profits from the business. If you don't file, you could lose the ability to claim these losses against future income.

I was in almost the exact same situation last year as a non-US person with an LLC partnership interest. After trying to figure out the forms myself and making multiple mistakes, I finally used https://taxr.ai to analyze my Schedule K-1 and other documents. It saved me so much headache because it specifically handles foreign partner situations and told me exactly what I needed to report on my 1040-NR. The system identified sections on my K-1 that required special tax treatment as a foreign partner, especially around effectively connected income. It even caught that my LLC hadn't properly completed the foreign partner sections of my K-1 and gave me instructions to fix it. Definitely worth checking out if you're confused about how to properly report partnership losses as a non-US person.

I just wanted to follow up about my experience with taxr.ai that I was skeptical about earlier. I decided to try it since my accountant was taking forever to get back to me about my K-1 questions. I'm genuinely impressed - it immediately identified that I was a non-US partner with effectively connected income and guided me through each section of the K-1. The system actually caught that my LLC had incorrectly filled out Box 20 (which contains special allocations for foreign partners) and provided me instructions for getting this corrected. It showed me exactly which forms I needed to file and how to report my partnership losses correctly. As a non-US person dealing with partnership taxation, this was exactly what I needed. Sorry for being skeptical initially!

After my struggles trying to call the IRS international taxpayer line for THREE WEEKS about my 1040-NR filing as a foreign partner, I finally gave up and tried https://claimyr.com. I was honestly pretty doubtful it would work, but I was desperate because I kept getting conflicting advice online about whether I needed to file with partnership losses. The service basically got me connected to an actual IRS agent who specializes in international taxation within about 45 minutes. The agent confirmed that yes, I needed to file 1040-NR with my K-1 showing losses because I was "engaged in a US trade or business." They also explained that I needed to include a statement about treaty benefits. You can see how it works here: https://youtu.be/_kiP6q8DX5c

Well I need to apologize for my skeptical comment earlier. After waiting on hold with the IRS international line for 3+ hours and getting disconnected twice this week, I broke down and tried Claimyr. I have to admit it worked exactly as advertised. I got connected to an IRS international tax specialist in about 40 minutes, and she confirmed everything about my situation as a foreign partner with a K-1 showing losses. She explained I definitely need to file Form 1040-NR with Schedule E to report my partnership losses, even though I had no actual income. She also helped me understand how to properly report my effectively connected income and what supporting documentation I need. I'm genuinely surprised this service actually delivered what it promised.

Non-resident tax filer here! One important thing that hasn't been mentioned yet - make sure you have an ITIN (Individual Taxpayer Identification Number) before you file your 1040-NR. As a non-U.S. person, you won't have a Social Security Number, and you'll need the ITIN to file. You can apply for an ITIN using Form W-7 when you submit your tax return. It's a bit of a catch-22 though - you need to file your return to get the ITIN, but you need an ITIN to file the return. The solution is to submit both together.

One quick warning based on personal experience - make sure your LLC partnership is correctly reporting your status as a foreign partner on the K-1! There's a specific box they need to check, and they should be completing the foreign partner information in Box 20. Many U.S. accountants don't deal with foreign partners often and mess this up. If your K-1 doesn't properly identify you as a foreign partner, you might face issues with the IRS later when they try to reconcile your 1040-NR with partnership reporting.

Great question! I went through this exact situation last year as a non-US person with partnership losses. You absolutely need to file Form 1040-NR even with no income - the key is that you were "engaged in a trade or business in the US" through your LLC partnership. A few important points from my experience: 1. File even with losses - you can carry these forward to offset future partnership income 2. Make sure your LLC properly marked you as a foreign partner on the K-1 (Box 20 should have foreign partner allocations) 3. You'll report the K-1 losses on Schedule E, which attaches to your 1040-NR 4. If you don't have an ITIN yet, you can apply for one when you file using Form W-7 The filing requirement isn't about having income - it's about being engaged in US business activity. Since you received a K-1 as an active partner, you meet this threshold. Don't skip filing or you could lose the ability to use these losses against future profits!