5471 – Foreign Corporations

Generally, a US citizen or Green Card Holder with an investment or shares in a foreign corporation must file form 5471. This is true even if a minority share is held. The form is an information return, submitted with the tax return.

How will I know I have a Form 5471 filing requirement?

There are several filing categories and many taxpayers fall into more than one category. The IRS definition of ownership or control is complicated and may require further discussion with your tax advisor. The different categories are:

  • Category 2: A US shareholder who acquired stock in a foreign corporation during the calendar year, resulting in holding 10% or more.
  • Category 3: A US shareholder who acquired or disposed of additional stock.
  • Category 4: A US shareholder who owns 50% or more of a foreign corporation.
  • Category 5: A US shareholder with at least a 10% share of a “Controlled Foreign Corporation” (CFC)

Important Definitions

  • US Shareholder: A US shareholder may be an individual US citizen or resident but can also be a Domestic Partnership or Corporation, a US Estate or Trust.
  • Controlled Foreign Corporation: A Controlled Foreign Corporation has US shareholders holding more than 50% of the total value of the corporate stock or the total combined voting power of all classes of stock, on any day of the tax year.

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