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Question
As the single non-resident alien owner of a single member LLC selling digital products online, is my income considered as Effectively Connected Income?
AI accountant’s answer:

As a non-resident alien, your income from a U.S. business (like a single-member LLC) can be considered Effectively Connected Income (ECI) if you are engaged in a trade or business in the United States. Selling digital products online to U.S. customers could potentially be considered as conducting a trade or business in the U.S., especially if your LLC is based in the U.S.

However, the specifics of your situation can greatly impact this. Factors such as where the digital products are created, where the business decisions are made, and how involved you are in the business operations can all play a role.

Remember, ECI is taxed differently than Fixed, Determinable, Annual, or Periodical (FDAP) income, which is another type of income non-resident aliens might receive from U.S. sources.

This is a complex area of tax law, and the IRS has specific rules and exceptions. So, while I strive to provide accurate information, it's crucial to understand that your specific circumstances could change the interpretation.

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