Lines 5 and 20. If the foreign corporation uses DASTM, enter on line 5d the same amount entered on line 5c. The total present value of all platform contributions made by the U.S. taxpayer during the tax year should be entered even if only a portion (or none) of the value of those platform contributions was included in the U.S. taxpayer's taxable income as platform contribution transaction (PCT) payments during the tax year. See Regulations section 1.9603(c)(1). Also see Regulations section 1.960-3(c)(2) for additional information regarding the ten PTEP groups. 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. It may also reflect uncertain tax positions (ASC 740-10) and would not include taxes paid in respect of uncertain tax positions recorded in prior years. Use Schedule P to report the PTEP in the U.S. shareholders annual PTEP accounts with respect to a CFC in the CFCs functional currency (Part I) and the U.S. shareholders U.S. dollar basis in that PTEP (Part II). No changes have been made to this schedule. If the return was or will be filed electronically, enter e-file.. On lines (1), (2), etc., under line 3, enter the name of each tested unit of the CFC (including the CFC tested unit itself) and enter for each tested unit the information required in columns (ii) through (xiv), based on the tentative gross tested income attributable to each tested unit (without regard to any amounts excluded under the GILTI high-tax exclusion in Regulations section 1.951A-2(c)(7) (GILTI high-tax exclusion)). If code 901(j) is entered on line a, enter on line b the country code for the sanctioned country using the two-letter codes (from the list at IRS.gov/CountryCodes). On line 7b, enter the amount of IDCs allocated to the foreign corporation for the tax year based on the foreign corporations RAB share. Enter the name of each lower-tier foreign corporation that made a PTEP distribution eligible with respect to which a deemed-paid tax is determined in the current year by the foreign corporation with respect to which this Schedule E (Form 5471) is being completed. Subtract the sum of lines 14d and 14e from line 14c" field, "14g.Net foreign personal holding company income excluded under high-tax exception" field, "14h.Subtract line 14g from line 14f" field, "15.Adjusted net foreign base company sales income:", "15b.Expenses allocated and apportioned to the amount on line 3 under section 954(b)(5)" field, "15c.Net foreign base company sales income. Enter earnings carried over to a foreign surviving corporation after an acquisition by a foreign corporation of the assets of another foreign corporation in a transaction described in section 381. See section 1272(a)(4) and Regulations section 1.1275-1(b)(1). PTEP attributable to inclusions under previous section 951(a)(1)(C) and subpart F income inclusions reclassified as investments in excess passive assets. PTEP attributable to hybrid dividends under section 245A(e)(2). See Regulations section 1.245A-5(e) for rules for calculating an extraordinary reduction amount. PTEP attributable to section 1248 amounts under section 959(e) and reclassified as investments in U.S. property. 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. The corporate U.S. shareholder should include the line 5a amount on Form 1120, Schedule C, line 13, column (a), or the comparable line of other corporate income tax returns. The specific instructions for the affected schedules state these requirements. The corporation is required to complete both lines only if the corporation provides a platform contribution to other controlled participants and is required to make platform contribution transaction payments to other controlled participants that provide a platform contribution to other controlled cost sharing arrangement participants. (b) During the tax year, did the CFC derive income (either directly or through a branch or similar establishment, for example, disregarded entity) in connection with the purchase or sale from, to, or on behalf of a related party (for example, purchase or sales commission income)? Amount excluded, reduction amount, or other amount not reported or reportable, "1.Gross foreign personal holding company income:", "1a.Dividends, interest, royalties, rents, and annuities (section 954(c)(1)(A)) (excluding amounts described in sections 954(c)(2) and (3))" field, "1b.Excess of gains over losses from certain property transactions (section 954(c)(1)(B))" field, "1c.Excess of gains over losses from commodity transactions (section 954(c)(1)(C))" field, "1d. Amounts entered in Schedule R (Form 5471), column (d) are also included on line 9, column (f) of Schedule J (Form 5471) and Part I, line 8 of Schedule P (Form 5471), both of which are completed by separate category of income. If so, an adjustment for the prior year amended return (and its impact on intervening years) should be reflected on line 2. See section 986(a). For purposes of Category 1 filers, a U.S. shareholder is a U.S. person who owns (directly, indirectly, or constructively, within the meaning of sections 958(a) and (b)) 10% or more of the total combined voting power of all classes of voting stock of a section 965 SFC or, in the case of a tax year of a foreign corporation beginning after December 31, 2017, 10% or more of the total combined voting power or value of shares of all classes of stock of a section 965 SFC. The functional currency of Domestic Corporation, CFC1, CFC2, and CFC3 is the U.S. dollar. Form 5471, Schedule I-1, captures CFC income inclusions by U.S. shareholders under Section 951A. For example, if you are the sole owner of a CFC (that is, you are described in Categories 4 and 5a), complete all six pages of Form 5471 and separate Schedules E, H, I-1, J, M, P, Q, and R. Note: Complete a separate Form 5471 and all applicable schedules for each applicable foreign corporation. In completing these lines, do not account for debt instruments that were issued, or distributions or acquisitions that occurred, before April 5, 2016. If applicable, use the reference ID number shown on Form 5471, page 1, item 1b(2). In such a case, the Schedule P must be attached to the statement described above.. A reference ID number (defined below) is required on line 1b(2) only in cases where no EIN was entered on line 1b(1) for the foreign corporation. Use the December 2020 revision of the schedule. Line 13. Section 960(b)(1). In doing so, the corporate U. S. shareholder must determine whether it meets the statutory and regulatory requirements for section 245A DRD. For details, see the Instructions for Form 8918. Do not include column (d) amounts in the total reported in column (f). Enter the appropriate code on line a (at the top of page 1 of Schedule J). On line 4(1), both columns (xii) and (xiv) should be blank in all cases. Subtract line 16b from line 16a" field, "16d.Net foreign base company services income excluded under high-tax exception" field, "16e.Subtract line 16d from line 16c" field, "17.Adjusted net foreign base company oil-related income:", "17b.Expenses allocated and apportioned to line 5 under section 954(b)(5)" field, "17c.Subtract line 17b from line 17a" field, "18.Adjusted net full inclusion foreign base company income:", "18a.Enter the excess, if any, of line 12 over line 8" field, "18b.Expenses allocated and apportioned under section 954(b)(5)" field, "18c.Net full inclusion foreign base company income. Negative amounts are hovering deficits reported in column (d) of line 5a. Enter the amount of the dividends received by the shareholder from the foreign corporation that is an extraordinary disposition amount. If so, did the foreign corporation derive any interest or dividend or equivalent amount described in section 954(c)(1)(E) or (G) from any transaction entered into in the ordinary course of its trade or business as a securities dealer? See Schedule B (Form 5713). These amounts are included in the total amount of residual income, which is reported on line 4. Any person who fails to file or report all of the information required within the time prescribed will be subject to a reduction of 10% of the foreign taxes available for credit under sections 901 and 960. Form 5471 is a perfect example and one of the most complex ones that the IRS ever created. If the amount on line 37c is greater than or equal to the amount on line 36, enter the amount from line 26 onto line 40, enter the amount from line 29 onto line 41, enter the amount from line 32 onto line 42, and enter the amount from line 35 onto line 43. Report taxes carried over to a foreign surviving corporation after an acquisition by a foreign corporation of the assets of another foreign corporation in a transaction described in section 381. Enter on line 5e dividends not reported on line 5a, 5b, 5c, or 5d. The identifying number of an individual is his or her social security number (SSN). The amounts reported in columns (x) and (xii) on line 1(a) are the sum of the amounts reported in each column on lines 1(a)(2) and 1(a)(3), which is equal to $8 ($5 + $3). Every U.S. citizen or resident described in Category 2 must complete Part I. A corporation that uses an accrual method of accounting must use accrued payments and accrued receipts for purposes of computing the total amount to enter on each line of Schedule M. Schedule O is used to report the organization or reorganization of a foreign corporation and the acquisition or disposition of its stock. Category 5b and 5c filers are not required to file Schedule H for foreign-controlled corporations. This category includes a U.S. person who had control (defined below) of a foreign corporation during the annual accounting period of the foreign corporation. See Rev. The additional penalty is limited to a maximum of $50,000. Specified tangible property and dual-use property. If the sum of foreign base company income (determined without regard to section 954(b)(5)) and gross insurance income (as defined in section 954(b)(3)(C)) for the tax year is less than the smaller of 5% of gross income for income tax purposes, or $1 million, then no portion of the gross income for the tax year is treated as foreign base company income or insurance income. A domestic corporation that is a U.S. shareholder with respect to a CFC must maintain a hybrid deduction account with respect to each share of stock of the CFC that the domestic corporation owns directly or indirectly through a partnership, trust, or estate. Is the U.S. person filing this return relying on any exception(s), exclusion(s), or other provision(s) not listed above to reduce or exclude any amounts reported or reportable as subpart F income (of or with respect to the CFC)? See section 954(c)(5) for a definition and special rules relating to commodity transactions. The transferor and transferee in certain section 351 transactions may make a joint election under section 362(e)(2)(C) to limit the transferor's basis in the stock received instead of the transferee's basis in the transferred property. If applicable, enter the reference ID number you have assigned to the foreign corporation identified on line 1a. See Regulations section 1.951A-3(g). For these purposes, the term alphanumeric means the entry can be alphabetical, numeric, or any combination of the two. This schedule is used to report information determined at the CFC level with respect to amounts used in the determination of income inclusions by U.S. shareholders under section 951A. See Regulations section 1.245A-5(e)(2)(i) for the definition of extraordinary reduction. Click on "Open File" and select the form 5471 and open it with the program. Any foreign corporation with respect to which one or more domestic corporations is a U.S. shareholder. The amount included in gross income of U.S. shareholders of the CFC under section 951A might not be known if there is more than one U.S. shareholder. 170, available at. Certain transactions involving an expatriated foreign subsidiary and/or its U.S. shareholders may be subject to special rules. Attach a statement explaining why such taxes were not deemed paid under section 960. For more detailed instructions, see the instructions for Form 1120, Schedule K, Question 21. See Temporary Regulations section 1.921-1T(b)(3). Form 5471. If non-cash distributions were made, attach a statement and show both the tax bases and fair market values. Consistent with the reporting requirement on Form 1118, enter the two-letter code (from the list at. Enter the name of each QBU and enter the information required for columns (i) through (xiv) for each QBU on lines 4(1), 4(2), etc., but do not enter amounts excluded from subpart F income under the subpart F high-tax exception (those amounts are reported on lines (1), (2), etc. Form 5471 (Schedule E) Income, War Profits, and Excess Profits Taxes Paid or Accrued. Add lines 14h, 15e, 16e, 17c, and 18e", "20.Adjusted net insurance income (other than related person insurance income):", "20a.Enter amount from line 7 (other than related person insurance income)" field, "20b.Expenses allocated and apportioned to the amount from line 7 under section 953" field, "20c.Net insurance income. No amount is reported on line 4, column (xii), because foreign income taxes attributable to high-tax exception or high-tax exclusion income are not creditable. Proc. Enter the amount of any dividend income received by the CFC from a related person as defined in section 954(d)(3). 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. If the tax is paid or accrued by the pass-through entity, enter the name of such entity instead of the name of the foreign corporation. The balance of foreign income taxes paid or accrued with respect to the three income groups that is entered on line 16 should equal zero after taking into account the reductions. Amounts reported on Schedule E may include taxes paid or accrued by the foreign corporation or a pass-through entity (for example, partnership or disregarded entity) owned by the foreign corporation. If the filer is described in more than one filing category, do not duplicate information. For the remaining columns, combine lines 8 through 12. During the tax year, did the CFC receive dividends* or interest** from a related person that (i) is a corporation created or organized under the laws of the same country under the laws of which the CFC is created or organized, and (ii) has a substantial part of its assets used in its trade or business located in the same foreign country? However, see the instructions for Schedule J, later, for changes that affect how the schedule is completed. Note. This example can also be found in the Schedule Q, Form 5471 instructions. Unaudited separate-entity financial statements of the foreign corporation that are prepared on the basis of IFRS. Schedule R of Form 5471 is used to report basic information pertaining to distributions from foreign corporations by Sections 245A, 959, and 986 (c). The person that files the required information on behalf of other persons must complete a joint Form 5471 according to the applicable column(s) of the Filing Requirements for Categories of Filers, earlier. See the instructions for Schedule I-1, Line 4 and Line 6 , later, for details. We ask for the information on this form to carry out the Internal Revenue laws of the United States. Enter the total asset amount of derivatives on line 3 and total amount of liability on line 17 reported in accordance with ASC 815 (Derivatives and Hedging). The current year tax is allocated and apportioned to the income group to which an amount of gross income is assigned by reason of the receipt of the reattribution payment. Please enter the applicable PTEP group code from the following list. Report on these lines dividends received and paid by the foreign corporation not previously taxed under subpart F in the current year or in any prior year. With respect to line a at the top of page 1 of Schedule E, there is a new code TOTAL that is required for Schedule E and Schedule E-1 filers in certain circumstances. Instead, include the amounts in the total for line 4. No credit is allowed for these taxes because only foreign income taxes paid or accrued to a foreign country or possession of the United States are allowed as a credit. Certain transactions for which the corporation (or a related party) has contractual protection against disallowance of the tax benefits. The foreign corporation reports on the cash basis. Enter the following passive category foreign personal holding company income of the CFC on line 1e: Income from notional principal contracts. As a result, these U.S. shareholders may also claim a foreign tax credit for foreign income taxes deemed paid with respect to such inclusions. 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. Do not abbreviate the country name. On pages 2 and 3, Schedule E-1, former line 16 is now line 14 and has been reserved for future use. The separate subpart F income groups within each applicable section 904 category of a CFC are on line 1 (subpart F income groups). On pages 2 and 3, Schedule E-1, former line 15 is now line 13 and now requests filers to combine lines 8 through 12 in columns (a), (b), and (c). Report the exchange rate using the divide-by convention specified under Reporting Exchange Rates on Form 5471, earlier. Also, on line 15, report any other reductions to the three income groups in columns (a), (b), and (c) necessary to achieve a zero balance on line 16. Shareholder's Pro Rata Share of Subpart F Income of a C.F.C. The line 5c current year E&P amount may include amounts with respect to the general category, passive category, or section 901(j) category. 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). U.S. shareholders of CFCs with subpart F income must report that income on their tax returns. Enter the employer identification number (EIN) or reference ID number of the lower-tier foreign corporation listed in column (a). Line 7. Enter the appropriate code on line a (at the top of page 1 of Schedule P). See the instructions for, An estate or trust that is not a foreign estate or trust, as defined in, The person that files Form 5471 must complete Form 5471 in the manner described in the instructions for, Shareholders are not required to file the information checked in the chart, later, for a foreign insurance company that has elected (under section 953(d)) to be treated as a domestic corporation and has filed a U.S. income tax return for its tax year under that provision. Proc. Line 19. See Multiple filers of same information, earlier. Line 8. Instructions for Form 5471, Information Return of U.S. For example, the Form 1040 page is at IRS.gov/Form1040; the Pub. Form 5471 filers generally use the same category of filer codes used on Form 1118. Introduction to Schedule Q of Form 5471 Schedule Q will be used to report a CFC's income, deductions, taxes, and assets by CFC income groups. 02/11/2022. Certain income derived in the ordinary course of business of a securities dealer (section 954(c)(2)(C)(i)). To figure the amounts to enter on lines 1a through 1i, on lines (1), (2), etc., under each line 1a through 1i, enter the name of each QBU of the CFC, including the CFC itself, and the information required in each column (i) through (xiv) with respect to the amount in each subpart F income group within each category for each QBU. For example, a cash distribution of $100 that is a nontaxable distribution of PTEP under section 959(a) of $30, a taxable dividend eligible for a dividends received deduction under section 245A of $15, a taxable dividend under section 301(c)(1) of $25, a nontaxable distribution applied against basis under section 301(c)(2) of $10, and a taxable distribution treated as gain from the sale or exchange of property under section 301(c)(3) of $20, would be reported on five rows. This is the case even if the Schedule I-1 also includes general category income. If an amount is entered on line 29, you must attach a statement that includes the following information. Schedules Q and R have been added to its numerous schedules to accommodate recent legislative changes. The reference ID number must meet the requirements set forth below. Reclassified section 951A PTEP and section 951A PTEP that is in the section 951A category should be reported on the general category Schedule J. New lines 13 and 28 were added for reporting loan guarantee fees received (line 13) and loan guarantee fees paid (line 28).

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