Non-Resident Required to File A Return?

[equinecpa]

A client of mine has business dealings with her Dad who is a Canadian.

My client operates a horse business. Her Dad will partner up with her or buy horses as an investment and then they sell them splitting the profits.

I'm currently reviewing her Dad's tax implications with his Canadian accountant to determine if this is a business or hobby for him or simply an investment. At the same time we are wondering if there are any US reporting requirement for either my client (she writes checks tor her Dad on sale of horses and some of them are large) or her father (non-resident return?). I don't belive my client has any reporting requirements as she is basically acting as an agent ie.she might receive 100% of the sales proceeds from the purchaser of the horse but then she is turning around and writing her Dad his half.

Does anyone have knowledge of non-resident reporting requirements? Her Dad is passive, doesn't materially participate in this venture so I would consider this an investment on his part.

Thanks for any help you can provide

Carolyn

[JoshinNC]

Are any of the sales occurring in Canada?

I have a client who recently began selling products in Canada through a distributor. It has been determined that even though they work through a distributor they are still required to file a Canadian tax return. I know this doesn't answer you initial question, but does bring up one more thing that you might want to address with your client.

[Snaggletoof]

Investment Income

Equine, as I understand it, your question is whether Dad should file a US return even though he is a resident of Canada.

U.S. Investment income is taxable to a non-US resident.

I'm assuming his Candian accountant can tell him if he is entitled to a credit against his Canadian taxes.