5471 for Corp

I have a new client. They are US citizen that owns 100% of a US Corporation. That corporation owns 100% of a Foreign Corporation. The US Citizen is also an officer of the foreign corp.

Question is: Does a separate 5471 need to be filed for both the corp and the individual? Or can the individual be listed on the Corp 5471?

Have you read through "Exceptions From Filing" in the 5471 instructions (page 3) and determined if the individual can be listed on the US corp's 5471?

https://www.irs.gov/pub/irs-pdf/i5471.pdf

Yes I read through that but it is still not clear to me. Based on that it appears that possibly the owner that is not an officer of the foreign corp would be able to be listed on the Corp filing but the owner that is an officer would not as he would have additional categories.

My interpretation iss similar. The officer has a different information reporting requirement than the corp and therefore must file separately.

The last part of the instructions to the Form 5471 for Category 2 filers says “See Regulations section 1.6046-1(f)(3) for exceptions.” (f)(3) in this regulation seems to be a definition of U.S. person. It doesn’t seem to be discussing any exceptions. However, when I look at 1.6046-1(e)(4), it is titled “Persons excepted from filing returns.” I wonder if the exception in (e)(4)(ii) might apply to your client? It seems like the obligation to file as a Category 2 filer is found in 1.6046-1(a)(2), and the exception in (e)(4)(ii) says:

Notwithstanding paragraph (a)(2) of this section, any U.S. citizen or resident required to make a return under such paragraph with respect to a person acquiring stock of a foreign corporation in an acquisition described in subdivision (i)(a) or (b) of such paragraph need not make such return, if:

(a) As a result of such acquisition of stock of such foreign corporation, a U.S. person files a return as a shareholder under paragraph (c)(1) of this section, and

(b) Immediately after such acquisition of stock, three or fewer U.S. persons own 95 percent or more in value of the outstanding stock of such foreign corporation.