5471 financial statement

Technical topics regarding tax preparation.
#1
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Dear all, hope everyone is doing well and keeping safe..

I have a quick question regarding form 5471 filing. I have just received audited financial statements from a client who happens to own 75% of this foreign corporation (a CFC). The foreign country does not have a calendar tax year so the statements cover the period July 1, 2019 through June 30, 2020.

Shall i ask the client for a calendar year financial statement from his overseas accountant or just use the fiscal year one already provided for reporting on the 5471. All the activity so far is construction in progress as they are building a commercial strip mall so there is no income. The financials, however, show expenses as it is based on GAAP.

Apart from the 5471 we would be filing a 926 to report the funds transferred to the foreign corp and 8938 to report the value of stock owned in the foreign corp.

1) Would there be a filing requirement for an FBAR to report bank account of the foreign Corp by the US shareholder?
2) Also on the 8938, would there be a requirement to report the bank account of the foreign Corp? or that would already be covered in the value of stock ownership being already reported.

Thank you, all.
 

#2
supdat  
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New York
The foreign country does not have a calendar tax year so the statements cover the period July 1, 2019 through June 30, 2020.

This is a constant problem with fiscal year CFC's. In theory you are supposed to report on a calendar year basis if calendar year U.S. shareholders own over 50%. In practice, it is not always possible to get his information. You can tell them you need the information on a calendar year basis and see what they say. However, you will never get it in time for this year, as it is October 13th.

Apart from the 5471 we would be filing a 926 to report the funds transferred to the foreign corp and 8938 to report the value of stock owned in the foreign corp.

Most likely you need Form 926, read the instructions for "cash contributions." The 5471 should be an "excepted asset." Check box (E) on Form 5471, page 1, and fill in Part IV of Form 8938.

Would there be a filing requirement for an FBAR to report bank account of the foreign Corp by the US shareholder? Yes, assuming the account value is over $10,000.

Also on the 8938, would there be a requirement to report the bank account of the foreign Corp? No. or that would already be covered in the value of stock ownership being already reported. Yes.
 

#3
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118
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8-Nov-2017 3:10pm
Location:
KY
Much Much appreciated Supdat..

Thank you
 


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