Report foreign corporation income without forms received.

Technical topics regarding tax preparation.
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25-Jul-2021 9:15pm
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I have not received a reply, so I am re-posting after arranging it.

Fact: My client established a corporation in Mexico in 2021 and is 70% shareholder at the end of 2021. But he did not receive any dividend, distribution, or salary in 2021 due to his status in that country. Then in now he is trying to get a status that he can open the bank and receive any distribution from the corporation. His company had a net income in 2021.

1. While he did not receive the dividend or distribution from a Mexican corporation, this company paid tax to Mexico's gov.
So, I thought he had to report form 1116 because he is a 70% shareholder in this corp.

2. I am preparing both his personal tax return and the partnership tax return in which he owns 50% interest.
I plan to first report his business income in Mexico on Form 5471 and form 1116 in his personal tax return, and then
report form 1116 to K-2 of the partnership.

3. If he doesn't need to report Form 1116, I don't think he needs to report K-2 and K-3 either. Is that correct?
However, Form 5471 still has to be reported.
 

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