The IRS requires anyone who owns 25% or more of a foreign entity to file a 5472 form as part of their tax return. This includes corporations and LLCs, but it also includes real estate and other investments such as gold.
What is the 5472 form?
The 5472 Form is a form that businesses and organizations in the United States use to disclose their activities and relationships with foreign financial institutions. The form was created by the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the United States Department of Treasury.
The 5472 Form has three main uses:
- To establish whether or not a business or organization is required to complete FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). If you are required to file an FBAR, then you must also complete this form as well.
- To fulfill foreign filing requirements for an exempt account holder who does not have any income attributable to their exempt account(s) if they are required to file another type of report with FinCEN instead of an FBAR.
- For wire transfers from certain types of accounts where there were more than two remittances per month during the calendar year within either domestic or international locations
Why do you need to fill out the 5472 form?
You might be wondering, "Why do I need to fill out the 5472 form?" The IRS requires all U.S. shareholders of a foreign corporation to complete and submit Form 5472 (Information Return of U.S. Persons with Respect to Certain Foreign Corporations) by filing it with the Internal Revenue Service (IRS). This form is used to report certain information about ownership interests in foreign corporations, including income received from that foreign corporation, assets owned by that foreign corporation, and other pertinent details about your relationship with that entity—information which may affect your tax liability as an owner or investor in this company.
You will have been sent a copy of Form 5472 by the company itself if you are considered one of its owners or investors (typically through being registered on some type of corporate document). If you own stock in a publicly-traded company and do not receive this form directly from them within two weeks after they file their documents with their local government office, contact them immediately and ask them why they haven't sent it yet; they should be able to send another copy straight away once they know what's going on
How is your foreign-owned US corporation affected by the 5472 Form?
If your foreign-owned US corporation is required to file Form 5472, you'll need to complete the form and submit it with your tax return. The information that you report on this form will help IRS determine if any income was earned by the foreign entity and whether that income was then passed through to its shareholders in the form of dividends.
When is the Filing Requirement for US Corporations Owned By Foreign Entities due?
The 5472 form is a tax form that must be filed with the IRS by June 30 of the year following the year of the transaction, when you own or control a US corporation that is owned or controlled by a foreign entity.
The form should be submitted by each foreign corporation and also by each local US corporation owned or controlled by it.
We’ve provided you with everything you need to know about requirements for filing a 5472 form. If you have any questions or need support in submitting this form. Reach out to us today via the 'Get Started' link and a member of the Blubooks team will be ready to point you in the right direction!