Every U.S. shareholder (including, U.S. citizens, tax residents, and U.S. entities) who own an interest in a Controlled Foreign Corporation or who dispose of or acquire a 10% interest in a foreign corporation, must file Form 5471 with their tax return in order to satisfy the reporting requirements of IRC Sections 6038 and 6046, and the regulations thereunder.
On December 14, 2018, the IRS released a revised version of Form 5471 and schedules that must be included with that version for the 2018 tax year. If you filed this form with your 2017 tax return, you may notice that the form is considerably longer for the 2018 tax year. There are new schedules, such as Schedules I-1 and P, which are being introduced for this filing season.
Revisions to Form 5471
The form updates include the following:
- Expanded to account for changes from the Tax Cuts and Jobs Act
- Significantly more detailed in the way it records Previously Taxed Income (PTI)
- Takes into account Global Intangible Low-Taxed Income (GILTI)
If you think you may be required to file Form 5471 with your 2018 tax return, contact me or another member of Kaufman Rossin’s international tax team for assistance.