I have questions on form 5471. My client is a U.S. citizen. He recently married a NRA, and they reside outside the United States.
Master Assumption: NRA owns 100% of a foreign entity ("Entity A"). My client does not own, directly or indirectly, any stock in Entity A and is not a director or officer of Entity A.
(1) It is correct that there is no Form 5471 filing requirement, under any category?
(2) The NRA spouse sells all shares of Entity A; is it correct that my client still does not have a 5471 filing requirement, that is, category 2 and category 3 are still not affected?
(3) Changing my master assumption slightly, if my client receives 1 share of stock in Entity A, is it correct that a category 4 filing requirement is triggered, but category 5 is not since CFC rules have an exception for NRA spouses?
Thank you in advance!!
- John