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Some say that the filing of form 5472 is not required since Capital contributions does not impact taxable income in any way, unless its a loan. Im really confused. Do I have to file form 5472? Yes you should be reporting the capital contributions.
A reportable transaction is: Any type of transaction listed in Part IV (for example, sales, rents, etc.) for which monetary consideration (including U.S. and foreign currency) was the sole consideration paid or received during the reporting corporations tax year; Any transaction listed in Part V; or.
IRS Form 5472 requires the disclosure of various transactions conducted by a reporting corporation with its related parties. These transactions are known as reportable transactions, and they include the exchange of cash, property, or services, loans, and other financial arrangements.
The IRS wants you to include all reportable transactions on Form 5472, and defines that term very broadly as basically any activity carried out between a US corporation and a foreign owner. Some examples include any money or property exchanged, loans or interest payments, and any use of US property by foreign owners.
How to File Forms 5472 and 1120 for a Foreign-Owned Single Member Get an Employer Identification Number (EIN) In order to file Form 5472, you have to apply for a U.S Employer Identification Number, or EIN. Fill out Form 5472. Fill out Pro Forma Form 1120. 4. Mail or Fax Forms 5472 and 1120 to the IRS.
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Related Party Rules under Form 5472 As provided by the IRS: A related party is: Any direct or indirect 25% foreign shareholder of the reporting corporation. Any person who is related (within the meaning of section 267(b) or 707(b)(1)) to the reporting corporation.
However, there are some exceptions, such as if: The corporation has no reportable transactions in a given tax year. The corporation is considered a foreign sales corporation and files Form 1120-FSC. The corporation is based in a country with a US tax treaty, has no permanent establishment in the US, and files Form 8833.
A penalty of $25,000 will be assessed on any reporting corporation that fails to file Form 5472 when due and in the manner prescribed. The penalty also applies for failure to maintain records as required by Regulations section 1.6038A-3.
Electronic Filing of Form 5472 If you file your income tax return electronically, see the instructions for your income tax return for general information about electronic filing. If you are a foreign-owned U.S. DE, you cannot file Form 5472 electronically.
If you are a foreign person who owns a U.S. limited liability corporation (LLC), or a foreign person who owns a U.S. LLC through a foreign entity, you may have an obligation to file IRS Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business).

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