1. Home
  2. Taxes General Forum
  3. Where do I report dividends paid on Form 5471 Schedule C or Schedule F

Where do I report dividends paid on Form 5471 Schedule C or Schedule F

Thanks Alan for answering my 5471 questions so far. It's been a great help.

I think I've now figured almost everything out. The only thing I'm not sure about is where to report the dividends paid by the company on 5471 schedule C.

If they were to be recorded, they'd have to come out on line 19, but it doesn't seem that they're an extraordinary item. Are they a prior period adjustment?

Alternatively, are they just not listed at all, and assumed to have been paid as the difference between beginning retained earnings and final retained earnings?

Alternatively, if they don't go on schedule C, do they go somewhere on Schedule F?

Tony

Reply to
A Wieser
Loading thread data ...

Typically, it's buried in the difference between Line 20a and 20b on Schedule F.

Reply to
Alan

That was what I assumed. Thanks for the corroboration.

Tony

Reply to
A Wieser

The dividends paid would also be shown on Schedule M.

Reply to
jmail7

True, that's there on Schedule M, line 21, but it's only true for category 4 filers.

Tony

Reply to
A Wieser

By the way... the word "Typically" in my response was meant to imply that GAAP says it is reflected in the retained earnings delta. I have no idea how a foreign corporation operating out of a foreign country with accounting procedures not consistent with US GAAP accounted for it.

Reply to
Alan

Note that if the foreign corporation is not controlled by U.S. persons and you are not a category 4 filer, then you need to assess whether the foreign corporation is a passive foreign investment company (PFIC). If it is a PFIC, then you may want to make a qualified electing fund (QEF) election or a mark-to-market election.

Reply to
jmail7

Because of the cash holding to keep the company solvent, it looks like I'm caught by the PFIC rules, and therefore have to fill out form 8261. However dividends haven't been over the excess level, except by a few hundred dollars due to foreign exchange rate movements.

As a result, it looks like it's best not to go with the QEF election.

So, when I go back and allocate the excess on a gain, it says that I should use the highest rate of tax under section 1 or section 11 for a given year.

Where would I find the tax rates applicable for a given year? Are they in the 1040 instructions for each year?

Tony

Reply to
A Wieser

If you don't make the QEF election you may be effectively converting capital gain into ordinary income. Other adverse consequences may also apply.

Yes, the section 1 rates are in the tax tables. For individuals the section 1 rates apply.

Reply to
jmail7

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.