An American LLC will be deemed a corporation and it can be chosen whether it will be “transparent” in Israel for tax purposes

An Israeli held an American LLC dealing with sale of medical insurance policies in the United States of America and held employees and offices in the United States of America with the management and control of the corporation from the USA.  The corporation purchased a number of rental apartments in the USA and because the LLC is transparent for tax purposes requested to recognize such purchases as an expense.

Because the Israeli did not choose to have the corporation as a transparent entity in Israel, it will be treated as a company.  Because the LLC paid tax in the USA on the real estate as income from business and is not subject to Israeli taxation and because the Israeli did not choose to see the corporation as transparent in Israel, one cannot recognize the tax expenses in Israel.  Similarity, the Israeli Court did not recognize depreciation on the apartments despite the argument that the US law recognizes that because the taxing of the LLC in Israeli will be pursuant to Israeli law.