For foreign-owned US LLCs, this filing requirement started in 2017. Foreign-owned LLCs and C corps with at least 25% foreign shareholders or partners must file the information return Form 5472 for every year with reportable transactions. (More about reportable transactions below.)
Are there any exceptions to filing Form 5472?
Exceptions from filing. A reporting corporation is not required to file Form 5472 if any of the following apply. 1. It had no reportable transactions of the types listed in Parts IV and VI of the form. 2. A U.S. person that controls the foreign related corporation files Form 5471 for the tax year to report information under section 6038.
What makes a Form 5472 a reportable Corporation?
“Form 5472 must be filed by Reportable Corporations that have Reportable Transactions with Related Parties.” That’s a lot of “R” words, so let’s define them. A Foreign-owned Single Member Disregarded Entity LLC is considered a Reportable Corporation under Section 1.6038A-1 of the IRS code.
What do you need to know about Form 5471?
A U.S. person that controls the foreign related corporation files Form 5471 for the tax year to report information under section 6038. To qualify for this exception, the U.S. person must complete Schedule M (Form 5471) showing all reportable transactions between the reporting corporation and the related party for the tax year.
Do you need to file a Form 5472 or Form 1120?
Therefore, the Form 5472 and Form 1120 requirements do not apply to most Foreign-owned Multi-Member LLCs (again, those are taxed as a Partnership). The reason why is because Multi-Member LLCs taxed as a Partnership are considered Domestic Partnerships by the IRS, and Domestic Partnerships are U.S. persons, which must file a U.S. tax return.
When do I have to file Form 5472 for extension?
If you file an extension for your corporate tax return, the Form 5472 is due together with the tax return on October 15. A single-member foreign-owned LLC is a Disregarded Entity for tax purposes, meaning that all income flows through to the owner.
It had no reportable transactions 2. A U.S. person in control of a foreign related corporation files Form 5471 for the tax year to report information on Schedule M which shows all reportable transactions between the reporting corporation and the related party (the overlap rule) 3.
