New Form 5471 for 2020 and Schedule J

Technical topics regarding tax preparation.
#1
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I just took a look at the updated form 5471 and it appears that if the US shareholder of a CFC does not have voting control, he can avoid Schedule J by filing under Category 1b and 5b. Is this correct?

I have a client who owns 20% of a CFC and this would significantly reduce the effort involved.

Thanks

Jas
 

#2
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any thoughts
 

#3
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Categories 1b and c and 5b and c apply “foreign-controlled corporations.” Is your CFC foreign controlled?
 

#4
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Yes it is a cfc
 

#5
Nilodop  
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Is your CFC foreign controlled?. A question that on its face is self-contradictory.

And yet ... Yes it is a cfc ... is the answer. Yet another contradiction?

I'm clearly out of it - which my kids tell me frequently.
 

#6
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From the instructions to the form:
Foreign-controlled corporation. For purposes of * * * Category 5 filers, a foreign-controlled corporation is a foreign corporation that is * * * [a] CFC that would not be a CFC if the determination were made without applying subparagraphs (A), (B), and (C) of section 318(a)(3) so as to consider a U.S. person as owning stock that is owned by a foreign person * * *.

Hint: Most CFCs are not foreign-controlled. Further hint: you most likely need to complete Schedule J.
 


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