If the box on line F is checked, enter the applicable code from the list provided below. Certain filers may be able to use alternative information (as defined in section 3.01 of Rev. If the sum of foreign base company income (determined without regard to section 954(b)(5)) and gross insurance income for the tax year exceeds 70% of gross income for income tax purposes, the entire gross income for the tax year must (subject to the high-tax exception described below, the section 952(b) exclusion, and the deductions to be taken into account under section 954(b)(5)) be treated as foreign base company income or insurance income, whichever is appropriate. See Regulations section 1.245A-5(d) for further guidance on tiered extraordinary disposition amounts. A negative $4 will be recorded on line 11, column (e)(x), and a positive $4 will be recorded on line 11, column (e)(iii). Line 22. In subsequent years, the Form 5471 filer may continue to enter both the EIN on line 1b(1) and the reference ID number on line 1b(2), but must enter at least the EIN on line 1b(1). Rev. Also, information pertaining to hovering deficits is no longer reported in column (d). Proc. A foreign corporation may have PTEP in a PTEP group within any of the separate categories of income, with the exception of foreign branch category income. Section references are to the Internal Revenue Code unless otherwise noted. Instructions for Form 5471(Rev. Proc. Check the Yes box if during the tax year the reporting corporation had any loans to or from the related party to which the safe haven rate rules of Regulations section 1.482-2(a)(2)(iii)(B) are applicable, and for which the reporting corporation used a rate of interest within the safe-haven range of Regulations section 1.482-2(a)(2)(iii)(B)(1) (100% to 130% of the AFR for the relevant term). Other penalties, such as an accuracy-related penalty under section 6662A, may also apply. Line 10. Do not include adjustments required to be reported on line 6 or 12. The amount of gross income entered on line 1 will generally be a positive amount. In other words, are any amounts excluded from line 1a of Worksheet A by reason of the look-through rule described in section 954(c)(6)? Generally, depreciation, depletion, and amortization allowances must be based on the historical cost of the underlying asset, and depreciation must be figured according to section 167. See Regulations section 1.482-7(b)(1)(i). Line 7. See section 953(c)(3)(D) for special rules for this election. See section 986(a). For example: Enter the deductions (including taxes) properly allocable to the amount on line 4 (or to which such deductions would be allocable if there were such gross income). .All persons identified in Item H must complete a separate Schedule P (Form 5471) if the person is a U.S. shareholder described in Category 1a, 1b, 4, 5a, or 5b. PTEP attributable to section 1248 amounts from the gain on the sale of foreign corporation stock by a CFC and reclassified as investments in U.S. property. The reference ID number must meet the requirements set forth below. Translate the amount on line 18 from functional currency to U.S. dollars at the year-end spot rate (as provided in section 989(b)). CFC1, in turn, wholly owns the only class of stock of CFC2, a foreign corporation. However, the foreign corporations reference ID number should also be entered on Form 8858 if the foreign corporation is listed as a tax owner of a foreign disregarded entity (FDE) or foreign branch (FB) on Form 8858. Adjusted net foreign personal holding company income:", "14b.Expenses directly related to amount on line 2" field, "14c.Subtract line 14b from line 14a" field, "14d.Related person interest expense (see section 954(b)(5))" field, "14e.Other expenses allocated and apportioned to the amount on line 2 under section 954(b)(5)" field, "14f.Net foreign personal holding company income. The filer is a U.S. shareholder that only owns stock, within the meaning of section 958(b), in the foreign corporation. Category 5b and 5c filers are not required to file Schedule H for foreign-controlled corporations. This amount, in our example, is $1,000. More than 50% of the total value of shares of all classes of stock of the foreign corporation. The name of the person filing Form 5471 is generally the name of the U.S. person described in the applicable category or categories of filers (see Categories of Filers, earlier). Indicate the regarded entity owner's name in parentheses after the FDE's name. Income described in section 952(a)(5) (line 22). See Regulations section 1.986(c)-1(c). If the foreign corporation is a CFC and the filer is a domestic corporation, enter on line 9 the sum of the hybrid deduction accounts with respect to each share of stock of the CFC that the domestic corporation owns directly or indirectly (within the meaning of section 958(a)(2), and determined by treating a domestic partnership as foreign). Reference ID number of foreign corporation. section 927(d)(6), as in effect before its repeal); and. Column (e)(ix) is PTEP described in the following three subgroups (which are aggregated into a single PTEP group). Page 33 Use columns (a) through (k) to report the opening balance of, current year additions and subtractions to, and the closing balance of, the PTEP in the U.S. shareholders annual PTEP accounts with respect to a CFC. Otherwise, check No. Apply Regulations section 1.385-3(b)(3)(iii)(E) to determine when a debt instrument is treated as issued for purposes of Regulations section 1.385-3(b)(3)(iii). On lines 1a through 1i, enter for the total for each column by adding the amounts on lines (1), (2), etc., excluding from such total any amounts reported with respect to income excluded from subpart F income under the high-tax exception in section 954(b)(4) (subpart F high-tax exception). The other reporting requirements of a taxpayer that includes passive category income with general category income in a Schedule I-1 do not change because the taxpayer includes passive category income with general category income in a Schedule I-1. Category 1a, 1c, 3, 4, 5a, and 5c filers must complete Part II. New line c has been added at the top of Schedule E to accommodate reporting of treaty countries in cases where a resource by treaty code is entered on line a. 0122. Form 8886, Reportable Transaction Disclosure Statement, must be filed for each tax year indicated in Regulations section 1.6011-4(c)(3)(i)(G). The facts are the same as in Example 1, except that during Year 2 CFC2 invests $40 in U.S. property. See Unrelated section 958(a) U.S. shareholder, below, for instructions pertaining to when Form 5471 may be completed as a Category 5b filer. Lines 10 and 25. The U.S. filer made or accrued a base erosion payment to, or has a base erosion tax benefit with respect to, the foreign corporation. If there is an income tax benefit amount on line 21a or 21b, add that amount to the line 19 net income or (loss) amount in arriving at line 22 current year net income or (loss) per the books. Similarly, the amounts reported on line 3(1) would not be included in the total reported on line 3, but the amounts reported on line 3(2) would be reported in the total reported on line 3. Except for columns (a), (b), and (c), which are new this year, use line 2 to reflect adjustments to a U.S. persons foreign tax credit as a result of redetermined foreign income taxes. Enter the subpart F income inclusion attributable to tiered extraordinary disposition amounts resulting from distributions from an extraordinary disposition account of the shareholder filing this Form 5471 and received by the foreign corporation. All passive income received during the tax year that is subject to no withholding tax or other foreign tax must be treated as one item of income. The information in this schedule will be used by the U.S. shareholder(s) of the CFC to file Form 8992, U.S. If the tax paid or accrued by the foreign corporation is attributable to a branch or qualified business unit (QBU) of the foreign corporation, enter the name of the branch or QBU. See Related constructive U.S. shareholder, later, for instructions pertaining to when Form 5471 may be completed as a Category 1c filer. Report on these lines platform contribution transaction payments received and paid by the foreign corporation (without giving effect to any netting of payments due and owed). For line 1(a)(1), $100 of gross income is reported in column (ii), $35 of foreign tax is reported in each of columns (x) and (xii), and the checkbox in column (xiv) is checked. See Temporary Regulations section 1.921-1T(b)(3). See the instructions for lines 1 through 4. Attach a statement with a description of the gain or losses. . Foreign personal holding company income derived in the active conduct of a banking, finance, or similar business (section 954(h)). Report the exchange rate in the entry space provided at the top of Schedule M using the divide-by convention specified under Reporting exchange rates on Form 5471, earlier. During the tax year, did the CFC have excess foreign currency gains over foreign currency losses (as defined in section 988(b)) attributable to any section 988 transaction directly related to the business needs of the foreign corporation? Attach a statement with a description and the amount of any required adjustments to taxes of the foreign corporation not already taken into account on this schedule. Use Schedule Q to report the CFCs income, deductions, taxes, and assets by CFC income groups for purposes of sections 960(a) and (d). There are some situations that warrant correlation of a new reference ID number with a previous reference ID number when assigning a new reference ID number to a foreign corporation. Through the 10 respondents interviewed, it has been established that working from home has both positive and negative effects, which form the basis of its advantages and disadvantages. Do not include adjustments required to be reported on line 1b or line 6. Attach Form 5471 to your income tax return (or, if applicable, partnership or exempt organization return) and file both by the due date (including extensions) for that return. Also, if a U.S. shareholder is required to file Schedule A (Form 8992) or Schedule B (Form 8992) with respect to the CFC, the reference ID number on Form 5471 and the reference ID number used on Schedule A (Form 8992) or Schedule B (Form 8992) for that CFC must be the same. Add lines 1a through 1g" field, "3.Gross foreign base company sales income (see section 954(d))" field, "4.Gross foreign base company services income (see section 954(e))" field, "5.Gross foreign base company oil-related income (see section 954(g)) after application of section 954(b)(8)" field, "6.Gross foreign base company income. Interest from conducting a banking business that is export financing interest (section 904(d)(2)(G)); Rents and royalties from actively conducting a trade or business received from a person other than a related person (as defined in section 954(d)(3)); and. A foreign corporation may need to report E&P with respect to all categories of income listed in the Instructions for Form 1118, with the exception of foreign branch category income. Domestic Corporation, a U.S. shareholder, wholly owns the only class of stock of CFC1, a foreign corporation. See section 960(d). The amount of a distribution is generally the amount of any money paid to the shareholder plus the fair market value (FMV) of any property transferred to the shareholder. Only net accounts receivables and payables to the extent that the CFCs books net the accounts payable against the receivables as payment of the accounts receivable. Exempt insurance income under section 953(e) and certain investment income of a qualifying insurance company or a qualifying insurance branch (sections 953(a)(2) and 954(i)). The corporate U.S. shareholder should include the line 5e amount on Form 1120, Schedule C, line 14, column (a), or the comparable line of other corporate income tax returns. Category 1b and 5b filers are not required to file Schedule G for foreign-controlled corporations. You must correlate the reference ID numbers as follows: New reference ID number [space] Old reference ID number. For purposes of Category 2 and Category 3, a U.S. person is: A citizen or resident of the United States. Also, timely information reporting is important to the extent the U.S. shareholder chooses to amend its return in a later year to make the election under section 962. The description should include whether the distribution was cash or non-cash and taxable or nontaxable to shareholders. If PTEP were distributed, include on Form 5471, Schedule I, line 6, any foreign currency gain or loss on the distribution that is recognized under section 986(c). Corporation B has a section 951A inclusion of $50x. Include net income from notional principal contracts (except a contract entered into to hedge inventory property). during the tax year" field, "11. Domestic Corporation is deemed to pay the $4 of withholding taxes deemed paid by CFC1 in Year 3 and paid by CFC2 in Year 2. 02/11/2022. As a result, the total amount entered on line 3 may not equal the sum of the amounts reported in columns (ii) through (xiii) on lines 3(1), 3(2), etc., if any tested units tentative tested income is excluded under the GILTI high-tax exclusion (these amounts are included in the total amounts reported on line 4). Instead, they should be reported in the year to which such taxes relate. This rule generally applies to covered asset acquisitions after December 31, 2010. A statement that their filing requirements with respect to the foreign corporation(s) have been or will be satisfied. See Regulations section 1.861-20(d)(3)(v)(C)(2). If the Schedule Q is being prepared to report the FOGEI or FORI of a CFC, check the box for Item D. Indicate the amount of FOGEI and FORI in each income group. Report asset values for each QBU or tested unit as well as the aggregate amount of assets in each group. Enter the amount of the dividends received by the shareholder from the foreign corporation that is an extraordinary reduction amount. Also, if a U.S. shareholder is required to file Schedule A (Form 8992) or Schedule B (Form 8992) with respect to the CFC, the reference ID number on Form 5471 and the reference ID number on Schedule A (Form 8992) or Schedule B (Form 8992) for that CFC must be the same. 2019-40, Item HPerson(s) on Whose Behalf This Information Return Is Filed, Items 1f and 1gPrincipal Business Activity, Reporting Amounts on Lines 1 Through 4 on Your Income Tax Return, Part ITaxes for Which a Foreign Tax Credit Is Allowed, Section 1Taxes Paid or Accrued Directly by Foreign Corporation, Section 2Taxes Deemed Paid (Section 960(b)), Part IIITaxes for Which Foreign Tax Credit Is Disallowed, Specific Instructions Related to Lines 1 through 16. A reference ID number is required only in cases in which no EIN was entered for the lower-tier foreign corporation. Enter on lines 5c(i), 5c(ii), 5c(iii)(A), 5c(iii)(B), 5c(iii)(C), and 5c(iii)(D), as applicable, the portion of the line 5c current year E&P amount with respect to each applicable category of income. Instead, if the foreign entity does not have an EIN, the taxpayer must enter a reference ID number that uniquely identifies the foreign entity. See section 381(c)(2)(B) and Regulations section 1.367(b)-7(d)(2)(ii). Section 951(a)(1)(A) inclusions are taken into account for the tax year before actual distributions and section 951(a)(1)(B) inclusions. 12-2022) Page: 4 (viii) Current Year Tax on Reattributed Income From Disregarded Payments (ix) Current Year Tax on All Other Disregarded Payments (x) Other Current Year Taxes (xi) Net Income (column (ii) less columns (iii) through (x)) (xii) Foreign Taxes for Which Credit Allowed Proc. A U.S. shareholder who is a Category 1 filer (defined above) must continue to file all information required (see below) as long as: The section 965 SFC has accumulated E&P related to section 965 that is reportable on Schedule J (Form 5471), or. A U.S. person described in Category 1, 3, 4, or 5 (shareholder) does not have to file Form 5471 if all of the following conditions are met. Do not enter aggregate cash flows, year-end loan balances, average balances, or net balances. Enter amounts in U.S. dollars unless otherwise noted. Form 5471, Schedule I-1, captures CFC income inclusions by U.S. shareholders under Section 951A. The U.S. shareholder has previously taxed E&P related to section 965 that is reportable on Schedule P (Form 5471). See section 7 of Rev. Attach a statement detailing any differences between the starting and ending balance of the extraordinary disposition account reported on line 8b. Please refer to the instructions emailed to registrants for additional information. Complete a separate Schedule P for each applicable separate category of income. 2019-40, earlier, for more details. On page 2, Schedule E-1, columns (a), (b), and (c) have been repurposed. Do not include taxes paid or accrued by the foreign corporation with respect to its receipt of a PTEP distribution, even if those amounts were included in the total entered on line 5, column (l), of Schedule E, Part I, Section 1. Schedule of 2020 Long Term Debt Payments DESCRIPTION ISSUED 2020 PRIN 2020 INT TOTAL P&I Town Outside Village-Acquisition of Highway Equipment 06/15/08 30,000 3,400 33,400 Repaving of Various Roads . Taxes paid or accrued with respect to distributions of PTEP by the U.S. shareholder, while not reported on the Form 5471, are subject to different rules regarding creditability and foreign currency gain or loss. Former columns (a) through (d), pertaining to current E&P, post-1986 undistributed earnings (post-1986 and pre-2018 section 959(c)(3) balances), pre-1987 E&P not previously taxed (pre-1987 section 959(c)(3) balance), and hovering deficit and suspended taxes, respectively, had been retained in post-2017 domestic corporate tax years to account for the fact that some pre-TCJA enactment rules continued to apply in the domestic corporation's tax years beginning after 2017 if such domestic corporation owned the foreign corporation through certain pass-through entities. The top margin of the summary return must be labeled Filed Pursuant to Rev. A separate Schedule J should not be completed for the section 951A category. Proc. These amounts are included in the total amount of residual income, which is reported on line 4. Revision Date. Expand the Schedule Q if you are reporting with respect to more than two units and/or with respect to more than one section 901(j) country. A U.S. person (see Category 2 Filer, above, for definition) who acquires stock in a foreign corporation which, when added to any stock owned on the date of acquisition, meets the 10% stock ownership requirement (described above) with respect to the foreign corporation; A U.S. person who acquires stock which, without regard to stock already owned on the date of acquisition, meets the 10% stock ownership requirement with respect to the foreign corporation; A person who is treated as a U.S. shareholder under section 953(c) with respect to the foreign corporation; A person who becomes a U.S. person while meeting the 10% stock ownership requirement with respect to the foreign corporation; or. Amount excluded by reason of the de minimis rule (but only to the extent not already included in amounts below). . See Regulations section 1.960-1(d)(3)(ii)(C). Form 5471.
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