Enter the foreign corporation's RAB share of the total present value of all platform contributions made by the U.S. taxpayer during the tax year with respect to the foreign corporation on line 5b. A corporate U.S. shareholder may claim a credit for such foreign taxes, subject to certain limitations. Enter the total amount of the lower-tier foreign corporations PTEP group taxes with respect to the PTEP group within the annual PTEP account identified in column (d) and column (e). The amounts reclassified are reported as negative numbers in columns (a) through (c) and positive numbers in column (e)(iii), as applicable. See section 482. In addition, new question 22 has been added pertaining to the U.S. persons pro rata share of subpart F income or tested items from a CFC. During the tax year, did the CFC derive income through the conduct of any manufacturing or sales activities (including mere passage of title) through a branch or similar establishment (such as a disregarded entity of the CFC) that would have been foreign base company sales income described in section 954(d) except that either (1) the branch or other similar establishment was not treated as a wholly owned subsidiary separate from the CFC under section 954(d)(2) and the regulations or (2) the income is not foreign base company sales income after the application of Regulations section 1.954-3(b)(2)(ii)(e)? Use this line to report E&P not previously taxed, which is treated as earnings invested in U.S. property and, therefore, reclassified to section 959(c)(1) PTEP (column (e)(iii)). In general, a Category 1 filer is a person who was a U.S. shareholder of a foreign corporation that was a section 965 specified foreign corporation (SFC) at any time during the foreign corporations tax year ending with or within the U.S. shareholders tax year, and who owned that stock on the last day in that year in which the foreign corporation was a section 965 SFC, taking into account the regulations under section 965. Enter amounts in U.S. dollars. For purposes of Specified tangible property and dual-use property. Enter the appropriate code on line a (at the top of page 1 of Schedule J). Enter the method of disposition (for example, sale, bequest, gift, trade). Enter income that is recaptured as subpart F income in the current year. L. 108-357 redesignated subsecs. As a result, the amount reported in column (ii) on line 1(a) is the sum of the amounts reported in column (ii) on line 1(a)(2) and 1(a)(3), which is equal to $175 ($100 + $75). Category 4 filers are not required to file a Form 5471 (in order to satisfy the requirements of section 6038) if the FSC has filed a Form 1120-FSC. To determine the appropriate code, see, Specific instructions related to lines 1 through 13, Complete a separate Schedule P for each applicable separate category of income. A "reference ID number" is a number established by or on behalf of the U.S. person identified at the top of page 1 of the form that is assigned to a foreign corporation with respect to which Form 5471 reporting is required. If the foreign corporation's books are maintained in functional currency in accordance with U.S. GAAP, enter on line 1 the functional currency GAAP income or (loss) from line 22 of Schedule C, rather than starting with foreign book income, and show GAAP-to-tax adjustments on lines 2a through 2i. Section 6 of Rev. Shareholder's Pro Rata Share of Subpart F Income of a C.F.C. Reference ID number of foreign corporation. Except for information contained on Schedule O, report information for the tax year of the foreign corporation that ends with or within your tax year. Criminal penalties under sections 7203, 7206, and 7207 may apply for failure to file the information required by sections 6038 and 6046. When translating amounts from functional currency to U.S. dollars, you must use the method specified in these instructions. See section 951A(c)(2). This factor is a fraction determined on Schedule A (Form 5713). Proc. Lines 1f(1) and 1f(2) are added for reporting of other types of income not reportable on lines 1a through 1e. During Year 1, Domestic Corporation reports an inclusion under section 951(a)(1) of $100 as a result of subpart F income of CFC2. Shareholder's Pro Rata Share of Earnings of a C.F.C. If there is more than one majority shareholder, the required tax year will be the tax year that results in the least aggregate deferral of income to all U.S. shareholders of the foreign corporation. Section 956(a) amount. In other words, are any amounts that are derived in connection with property that does not satisfy section 954(d)(1)(B) excluded from line 3 of Worksheet A (that is, income excluded by reason of Regulations section 1.954-3(a)(3))? See Regulations section 1.9601(d)(2). See sections 956(c) and (d) and the regulations under section 956 to determine whether the CFC is treated as holding U.S. property. If the foreign corporation uses DASTM, enter on line 5d the same amount entered on line 5c. During the tax year, did the subpart F income of the CFC exceed the earnings and profits of such corporation? See the instructions for, If code 901j is entered on line A, enter on line 1m, column (a), the country code for the sanctioned country using the two-letter codes (from the list at. Enter the amounts on lines 1 through 5c in the CFC's functional currency. The corporation is required to complete line 5 only if the corporation itself incurred intangible development costs. In this case, enter total gross income (for income tax purposes) on line 11. Check the Yes box on line 17a if there was an extraordinary reduction with respect to any controlling section 245A shareholder of the foreign corporation, as defined in Regulations section 1.245A-5(i)(2), during the tax year of the foreign corporation. Report on these lines cost sharing transaction payments received and paid by the foreign corporation (without giving effect to any netting of payments). Enter the number of shares acquired indirectly (within the meaning of section 958(a)(2)) by the shareholder listed in column (a). Section 951A income, Section 965(a) inclusion, and Subpart F income other than sections 951A and 965 inclusion. These numbers are used to uniquely identify the foreign corporation in order to keep track of the corporation from tax year to tax year. In other words, are any amounts excluded from line 3 of Worksheet A by reason of the special rule in Regulations section 1.954-3(a)(1)(ii)? If the shareholder's latest tax return was filed electronically, enter e-filed in column (b)(3) instead of a service center. Debt that the filer treats as stock pursuant to Regulations section 1.385-3 still should be included when completing line 19a. See Regulations section 1.482-7(e) for rules on a determining and updating controlled participants RAB share. If the foreign corporation owned at least a 10% interest, directly or indirectly, in any foreign partnership, attach a statement listing the following information for each foreign partnership. If the shareholder is not a U.S. corporation, this amount is zero" field, "Section 956 inclusion. See section 959(c). During the tax year, was the CFC a qualifying insurance company (as defined in section 953(e)(3)) that derived qualified insurance income (as defined in section 954(i)(2))? The U.S. person(s) for which the Category 2 filer is required to file Form 5471 does not directly own an interest in the foreign corporation but is required to furnish the information solely because of constructive stock ownership from a U.S. person and the person from whom the stock ownership is attributed furnishes all of the information required of the Category 2 filer. If a U.S. individual shareholder has a Subpart F inclusion from their investment in a CFC, they need to report the inclusion on their tax return and include . In other words, are any amounts described in section 954(c)(3)(A)(i) excluded from line 1a of Worksheet A? 92-70 for Dormant Foreign Corporation.. The negative amounts could be reported on a different Schedule J than the positive amounts if such amounts are reclassified from one separate category to another separate category. 8 A subpart F loss is allocated to a separate category from net tested income, and there does not appear to be any provision that allows this loss to be allocated across to reduce the CFC's tested 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. See Regulations section 1.951A-3(g). Enter the amount of the U.S. shareholders subpart F income inclusion attributable to tiered hybrid dividends received by the CFC. Tentative section 956 amount. Attach a statement detailing the nature and amount of any adjustments in E&P not accounted for on lines 8 through 11. File it with Form 1040, 1040NR, 1041, 1065, or 1065-B." Corporation and S Corporation returns do not use Schedule F (Form 1040). Enter the appropriate code on line a (at the top of page 1 of Schedule P). If the foreign surviving corporation had a deficit in E&P prior to a transaction described in section 381, such deficit is recharacterized as a hovering deficit after such nonrecognition transaction. See section 986(b). Owns (either directly or indirectly, within the meaning of section 958(a)) any stock of a CFC (as defined in sections 953(c)(1)(B) and 957(b)), unless the foreign corporation has an effective section 953(c)(3)(C) election in place for the tax year. This list identifies the codes used on Schedule K-1 for all partners and provides summarized reporting information for partners who file Form 1040. Enter on line 5b the DASTM gain or loss figured under Regulations section 1.985-3(d). For example, information described in code 03 above qualifies as alternative information only if information described in code 01 and 02 is not readily available. Use Schedule E, Part I, to report taxes paid, accrued, or deemed paid under section 960(b)(2), by a foreign corporation for which a foreign tax credit is allowed and use Schedule E, Part III, to report taxes for which a credit may not be taken. If applicable, use the reference ID number shown on Form 5471, page 1, Item 1b(2). For purposes of Category 5c, the term foreign-controlled CFC has the same meaning as defined in Category 5b filers, above. See Regulations section 1.9601(d)(2)(ii). Enter the exchange rate in column (k) and the translated dollar amount in column (l). See Regulations sections 1.901(m)-1 through 1.901(m)-8 for additional information. During the tax year, was the CFC an eligible CFC (as defined in section 954(h)(2)) that derived qualified banking or financing income (as defined in section 954(h)(3))? For purposes of Category 1c, the term foreign-controlled section 965 SFC has the same meaning as provided in Category 1b Filers, above. A foreign corporation may have PTEP in a PTEP group within any of the separate categories of income, except foreign branch category income. All other FSC income that is not foreign trade income or investment income or carrying charges. See section 989(b). If the Yes box on line 17b has been checked and the U.S. shareholder filing the Form 5471 is a controlling section 245A shareholder of the foreign corporation, the U.S. shareholder filing this Form 5471 must attach an Elective Section 245A Year-Closing Statement pursuant to Regulations section 1.245A-5(e)(3)(i)(C) containing the information required under Regulations section 1.245A-5(e)(3)(i)(D). If taxes were paid or accrued to more than one country with respect to the same income, include each tax paid or accrued to a different country on separate lines. 2019-40). Enter the amount of the CFCs taxable income or loss from sources outside the United States and its possessions from the following. As such, the exchange rate must be reported as the units of foreign currency that equal one U.S. dollar, rounded to at least four places. Corporation A wholly owns the only class of stock of CFC2. These new columns have been added to reflect Regulations section 1.861-20(e). Do not report the exchange rate as the number of U.S. dollars that equal one unit of foreign currency. Enter the smaller of line 6 or line 13" field, "15. For purposes of Category 4, a U.S. person has control of a foreign corporation if, at any time during that person's tax year, it owns stock possessing: More than 50% of the total combined voting power of all classes of stock of the foreign corporation entitled to vote; or. U.S. shareholder's pro rata share of the amount on line 12" field, "14. The attached statement must include a totals line that ties into the amounts reported in each column of line 14. Instead, they should be reported in the year to which such taxes relate. Every U.S. person described in Category 4 must file Schedule M to report the transactions that occurred during the foreign corporation's annual accounting period ending with or within the U.S. person's tax year. The corporate U.S. shareholder should include the line 5d amount on Form 1120, Schedule C, line 14, column (a), or the comparable line of other corporate income tax returns. They must also report all information that would ordinarily be reported on the Form 8992, as well as the relevant foreign tax credit information, on the Schedule . "field, "62.Amount of line 61 that applies to section 954(c) subpart F Foreign Personal Holding Company Income. See Schedule B (Form 5713). See Temporary Regulations section 1.921-1T(b)(3). If a CFC or a member of a controlled group (within the meaning of section 993(a)(3)) that includes the CFC has operations in, or related to, a country (or with the government, a company, or a national of a country) that requires participation in or cooperation with an international boycott as a condition of doing business within such country or with the government, company, or national of that country, a portion of the CFC's income is included in subpart F income. This amount must be converted from functional currency to U.S. dollars using the average exchange rate for the year of the CFC. Do not include foreign income taxes that are disallowed and are reported on Schedule E, Part III. In general, this is E&P of the foreign corporation that has not been included in gross income of a U.S. person under section 951(a)(1) and section 951A. Differences between this U.S. dollar GAAP column and the U.S. dollar income or loss figured for tax purposes under Regulations section 1.985-3(c) should be accounted for on Schedule H. See Schedule H, Special rules for DASTM , later. Enters the name and address of his son, John, in column (g). Amount of deduction under section 245A, if any, that the shareholder would be allowed if the shareholder received a hypothetical distribution within the meaning of Regulations section 1.956-1(a)(2). See the instructions for Form 5471, Schedule I, Vegetable & Melon Farming (including potatoes & yams), Greenhouse, Nursery, & Floriculture Production, Other Crop Farming (including tobacco, cotton, sugarcane, hay, peanut, sugar beet & all other crop farming), Aquaculture (including shellfish & finfish farms & hatcheries), Forest Nurseries & Gathering of Forest Products, Support Activities for Crop Production (including cotton ginning, soil preparation, planting, & cultivating), Support Activities for Animal Production (including farriers), Sand, Gravel, Clay, & Ceramic & Refractory Minerals Mining & Quarrying, Other Nonmetallic Mineral Mining & Quarrying, Electric Power Generation, Transmission & Distribution, Other Heavy & Civil Engineering Construction, Foundation, Structure, & Building Exterior Contractors (including framing carpentry, masonry, glass, roofing, & siding), Plumbing, Heating, & Air-Conditioning Contractors, Building Finishing Contractors (including drywall, insulation, painting, wallcovering, flooring, tile, & finish carpentry), Other Specialty Trade Contractors (including site preparation), Fruit & Vegetable Preserving & Specialty Food Mfg, Other Food Mfg (including coffee, tea, flavorings, & seasonings), Cut & Sew Apparel Mfg (except Contractors), Footwear Mfg (including rubber & plastics), Veneer, Plywood, & Engineered Wood Product Mfg, Petroleum Refineries (including integrated), Asphalt Paving, Roofing, & Saturated Materials Mfg, Resin, Synthetic Rubber, & Artificial & Synthetic Fibers & Filaments Mfg, Pesticide, Fertilizer, & Other Agricultural Chemical Mfg, Soap, Cleaning Compound, & Toilet Preparation Mfg, Alumina & Aluminum Production & Processing, Nonferrous Metal (except Aluminum) Production & Processing, Machine Shops; Turned Product; & Screw, Nut, & Bolt Mfg, Coating, Engraving, Heat Treating, & Allied Activities, Agriculture, Construction, & Mining Machinery Mfg, Commercial & Service Industry Machinery Mfg, Ventilation, Heating, Air-Conditioning, & Commercial Refrigeration Equipment Mfg, Engine, Turbine & Power Transmission Equipment Mfg, Semiconductor & Other Electronic Component Mfg, Navigational, Measuring, Electromedical, & Control Instruments Mfg, Manufacturing & Reproducing Magnetic & Optical Media, Other Electrical Equipment & Component Mfg, Furniture & Related Product Manufacturing, Motor Vehicle & Motor Vehicle Parts & Supplies, Professional & Commercial Equipment & Supplies, Household Appliances & Electrical & Electronic Goods, Hardware & Plumbing & Heating Equipment & Supplies, Jewelry, Watch, Precious Stone, & Precious Metals, Beer, Wine, & Distilled Alcoholic Beverages, Flower, Nursery Stock, & Florists' Supplies, Motorcycle, ATV, & All other Motor Vehicle Dealers, Automotive Parts, Accessories, & Tire Retailers, Lawn & Garden Equipment & Supplies Retailers, Supermarkets and Other Grocery Retailers (except Convenience), Electronic & Appliance Retailers (including computers), Warehouse Clubs, Supercenters,& Other General Merch. Other penalties, such as an accuracy-related penalty under section 6662A, may also apply. Do not abbreviate the country name. and is due when the income tax return is due including any . 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. Domestic Corporation reports on CFC2s Form 5471, Schedule J, line 4, column (e)(x), as a positive number, the $40 PTEP distribution. See line 15 with respect to reporting tested taxes not deemed paid as a result of the inclusion percentage or the application of the 80% limitation. Enter U.S. dollar amounts on lines 6b, 6c, and 6d, translated from functional currency at the average exchange rate for the foreign corporation's tax year (see section 989(b)). For purposes of this Schedule P, include in each separate category of income, foreign source and U.S. source income. Do not include an account receivable or payable balance arising in connection with the provision of services or the sale or processing of property if the amount of such balance does not, at any time during the tax year, exceed what is ordinary and necessary to carry on the trade or business. If there is more than one U.S. shareholder, the amounts reported on Schedule P with respect to each U.S. shareholder might be different from the amounts reported on Schedule J. See section 959(a)(2) and (f)(1). If a U.S. shareholder of a CFC is considered to have participated in a reportable transaction under the rules of Regulations section 1.6011-4(c)(3)(i)(G), the shareholder is required to disclose information for each reportable transaction. . Subtract the sum of lines 27 and 28 from line 14e." See Regulation sections 989(b)(1) and (3), 1.951A-1(d)(1), and 1.965-1(b)(1) and (2). However, if a taxpayer has entered code TOTAL on line A and the total reported on that Schedule Q includes both foreign source income and U.S. source income, the taxpayer may check both boxes on line D. A separate Schedule Q is required for foreign oil and gas extraction income (FOGEI) and foreign oil related income (FORI). Complete a separate Schedule P for each applicable separate category of income. For purposes of Category 1, a U.S. person is: A citizen or resident of the United States; An estate or trust that is not a foreign estate or trust, as defined in section 7701(a)(31). In general, in the case of a domestic corporation that is a U.S. shareholder with respect to a CFC, a dividend received by the domestic corporation from the CFC is a hybrid dividend to the extent of the sum of the U.S. shareholders hybrid deduction accounts with respect to shares of stock of the CFC. Enter the line 5c functional currency amount translated into U.S. dollars at the average exchange rate for the foreign corporation's tax year. In other words, is line 58 of Worksheet A greater than zero? Schedule I-1 is now completed once. Illegal bribes, kickbacks, and other payments (line 21). For example, if both income equivalent to interest and income from notional principal contracts are included on line 1e, on the statement, identify the amount related to each of those income groups for each column. 2019-40, 2019-43 IRB 982 to similarly situated Category 1 filers. Use line 10 to report reclassifications of section 959(c)(2) PTEP in columns (e)(vi) through (e)(x) to section 959(c)(1) PTEP in columns (e)(i) through (e)(v). Worksheet - - U.S. See Regulations sections 1.954-1(c)(1)(iii)(B) and 1.904-4(c)(3) through (5). The facts are the same as in Example 2, except that during Year 4, CFC1 distributes $36 to Domestic Corporation. An amended 2017 tax return should be filed by or for the U.S. person(s) with respect to which Form 5471 was required and that return should include an amended Form 5471. Foreign taxes for which credit is allowed (U.S. dollars). Number of quarter-ends the foreign corporation was a C.F.C. As a result of this change, former lines C and D have been re-lettered as new lines D and E. At the top of page 1 of the schedule, if a Schedule Q filer enters code TOTAL on line A, the filer must also check one or both boxes on line D (former line C) to indicate whether the total amounts reported on Schedule Q include only foreign source income, or both foreign source income and U.S. source income. A separate Schedule G-1 must be filed for each cost sharing arrangement (CSA) as defined in Regulations section 1.482-7(b) in which the foreign corporation was a controlled participant (as defined in Regulations section 1.482-7(j)) during the tax year. The person that files Form 5471 must complete Form 5471 in the manner described in the instructions for Item H. All persons identified in Item H must attach a statement to their income tax return that includes the information described in the instructions for Item H. See Regulations section 1.6038-2(j)(1) and (3) for additional information. During the tax year, did the CFC derive income (either directly or through a branch or similar establishment, for example, a disregarded entity) in connection with the purchase or sale from, to, or on behalf of a related person, of personal property manufactured by the CFC within the meaning of Regulations section 1.954-3(a)(4)(iv)?
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