5471 for one spouse immigrant (when the other is not)

Technical topics regarding tax preparation.
#1
Keyad22  
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Husband received green card in 2022. The wife is still a foreigner. She has a company in the foreign country, 100% owned by her. But the company was owned by husband and wife. Wife will not apply for the green card in 5 years. All those wealth plannings were set up with the help of their immigrant lawyer.

Question, will the husband and wife relationship make the husband indirectly owns the wife's business in the foreign country and trigger form 5471 reporting requirement for 2022?
 

#2
sjrcpa  
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How can it be
Keyad22 wrote:100% owned by her.
and
Keyad22 wrote: owned by husband and wife.
?

Are they filing a joint US tax return?
 

#3
Keyad22  
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It was owned by Husband and wife.

But the immigrant lawyer suggest to move all the businesses to the wife before the husband apply for green card. It is now 100% owned by the wife. Wife stays in the foreign country. Husband is a green card holder and travels between two countries. They are still married.
 

#4
deniz  
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Sec. 318(a) provides Family Attribution Rules which require attribution from a Spouse, there are no laws that prevent a Cat 4 attribution from nra spouse. Therefore, client is a Category 4 filer required to file Form 5471 because he controls a CFC. The immigration attorney's advice only excludes Category 5 filing requirement.
 

#5
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Somewhere out there...
May not be a “cfc” - control under category 4 is different than other categories

Also be aware of the exceptions to filing -

A Category 4 filer does not have to file Form 5471 if it:
Does not own a direct or indirect interest in the foreign corporation; and
Is required to file Form 5471 solely because of constructive ownership from a nonresident alien.
No statement is required to be attached to the tax return of a Category 4 filer claiming either constructive ownership exception. See Regulations section 1.6038-2(j)(2) and (3) and (l) for additional information.
 

#6
Keyad22  
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Thank you!!!
 

#7
deniz  
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HenryDavid

Yes, you are right, thank you.

http://publications.ruchelaw.com/news/2 ... tPower.pdf
 


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