I still can't figure out for the life of me whether I have to fill in 5471 or not, and which sections.
The instructions are titled: "Information Return of U.S. Persons With Respect to Certain Foreign Corporations"
Certain Foreign Corporations implies that it's not necessary for the majority of Foreign Corporations.
Which subset of Foreign Corporations is it necessary for?
Tony
Who Has To File is defined in the instructions (too long to print here). Typically, it's someone who owns 10% of a foreign corp. or adds 10% ownership or adds enough to get to 10% ownership or someone who controls a foreign corp.
So if I own 10% or more as a us citizen in a foreign corporation, I have to file, as a category 3 filer right? If so, which of the 5 bullet points is it that deem me to have to file? I was reading the first point as having to file in the year you first acquire the stock, not every year you hold the stock.
Perhaps I don't understand the legal term acquire.
Tony
Tony
Acquire means you become the owner by any means (purchase, gift, inherit, etc.).
You file for the year you acquire enough stock to meet the 10% interest. You file for any year you acquire 10% of the stock (this disregards what you already own). You file for the year in which your disposal of stock drops you below the 10% interest. If you are a non-US person, you file for the year in which you become a US person and meet the 10% ownership requirement. You file in any year in which you own stock in certain foreign captive insurance companies. (Sec. 953(c) US shareholder)
I agree with what Alan has said. Also, if the foreign corporation is controlled by U.S. persons (i.e., it is a controlled foreign corporation), then you would need to file every year that you at least
10%.
And why would the government want to know about these companies anyway? Does it affect the taxes they take in?
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