Hello, I have a puzzling question that I cannot solve.

Situation: LLC single owner.

Should file form 1040NR for ECI or non ECI that is U.S. derived, with certain exceptions.

Product is book publishing (intellectual rights). Everything is digitally manufactured outside the U.S. and the publishing takes place in Canada (Canadian ISBN).

The product is sold to a U.S. printer and distributor for the U.S. market.

Can this be considered foreign source income or is it ECI, as it is sold to a U.S. company?

From what I gather from Publication 519, rent properties/royalties/etc. are subject to tax where they are used. But, as the ISBN is Canadian... I think the place where the intellectual right is used/registered is Canada.

Does anybody have a clue?

Thanks

ECI UNLESS you/your SMLLC are physically present in US and the product is SOLD overseas. So since you own and operate a business, SMLLC, in the US selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the US. You said that The product is sold to a U.S. printer and distributor for the U.S. market, so it is US spruce income , ECI. you need to file 1040NR and the Sch C and you do not need to file Sch SE as you are NOT subject to US soc sec benefits . effectively connected income, after allowable deductions, is taxed at graduated rates. These are the same rates that apply to U.S. citizens and residents.

Thank you, that was the clear explanation I needed!