Foreign Partner

Domestic partnership with foreign partners invests in rental real estate.
According to the IRS web page dealing with Effectively Connected Income, for a foreign individual, "Income from the rental of real
property may be treated as ECI if the taxpayer elects to do so."
I assume that means the individual has the option to call the income ECI as opposed to FDAP income, which is taxed at 30% or 37%.
First, how wrong am I?
Second, if an individual can elect to have what would be considered rental FDAP income to be ECI, can a foreign partner in a domestic partnership do that too?
Thanks for any clarification you can give me.
--
Stu
http://DownToEarthLawyer.com
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Simple explanation of eci for rental
If not eci, tax withholding is on gross, no expenses.
If eci, schedule e with expenses and uses 1040nr tax table.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Yes, I understand that. I don't care about withholding.
The question is whether a foreign partner of a domestic partnership can elect that income from real estate rental be considered ECI. An individual can, but I can't find any authority on this point.
--
Stu
http://DownToEarthLawyer.com
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 10/17/18 11:46 AM, Stuart O. Bronstein wrote:

Section 871(d) & 882(d) and their regulations allow for the election to any nonresident alien or foreign corporation

I don't see why not as long as the foreign partner is a nonresident alien or foreign corporation.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Thanks, Alan. I appreciate the information.
--
Stu
http://DownToEarthLawyer.com
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

BeanSmart.com is a site by and for consumers of financial services and advice. We are not affiliated with any of the banks, financial services or software manufacturers discussed here. All logos and trade names are the property of their respective owners.

Tax and financial advice you come across on this site is freely given by your peers and professionals on their own time and out of the kindness of their hearts. We can guarantee neither accuracy of such advice nor its applicability for your situation. Simply put, you are fully responsible for the results of using information from this site in real life situations.