A U.S. person who disposes of sufficient stock in the foreign corporation to reduce his or her interest to less than the 10% stock ownership requirement. Include all derivatives, both short-term and long-term. Enter the name of each lower-tier foreign corporation that made a PTEP distribution eligible with respect to which a deemed-paid tax is determined in the current year by the foreign corporation with respect to which this Schedule E (Form 5471) is being completed. When a schedule is required but all amounts are zero, the schedule should still be filed with one or more zero amounts. In other words, are any amounts that are derived in connection with property that does not satisfy section 954(d)(1)(A) excluded from line 3 of Worksheet A (that is, income excluded by reason of Regulations section 1.954-3(a)(2))? 2439 User Road Hamilton, NJ 08690-3303 (609) 570-1000 Fax (609) 570-1050 Toll Free (877) 269-0090 www.mdlab.com PTEP attributable to section 1248 amounts from the gain on the sale of foreign corporation stock by a CFC and reclassified as investments in U.S. property. If the Schedule Q is being prepared to report the FOGEI or FORI of a CFC, check the box for Item D. Indicate the amount of FOGEI and FORI in each income group. If the CFC has a tested loss on line 6, enter zero. See Regulations section 1.9603(c)(1). Enter the amounts in this schedule in the functional currency of the foreign corporation as reported on Form 5471, page 1, Item 1h Functional Currency. For line 4(1), $300 of gross income is reported in column (ii) and $105 of foreign tax is reported in column (x). All amounts should be in functional currency. Thus, the sale of a partnership interest by a CFC that meets the ownership threshold constitutes subpart F income only to the extent that a proportionate sale of the underlying partnership assets attributable to the partnership interest would constitute subpart F income. Corporation A will report $20x of PTEP as a result of its section 951A inclusion on its Form 5471, Schedule P, line 7, column (h), with respect to CFC1. For example, if there were errors in the original computation of foreign income taxes, an adjustment would be included on this line. See section 960(d). During Year 2, CFC2 distributes $40 to CFC1. More than 50% of the total value of shares of all classes of stock of the foreign corporation. If the foreign corporation ceases to be a CFC during the tax year: The determination of the U.S. shareholder's pro rata share will be made based upon the stock owned (within the meaning of section 958(a)) by the U.S. shareholder on the last day during the tax year in which the foreign corporation was a CFC; The CFC's U.S. property for the tax year will be determined only by taking into account quarters ending on or before such last day (and investments in U.S. property as of the close of subsequent quarters should be recorded as zero on line 1); and. Unaudited separate-entity financial statements of the foreign corporation that are prepared on the basis of local-country GAAP. The U.S. person(s) for which the Category 2 filer is required to file Form 5471 does not directly own an interest in the foreign corporation but is required to furnish the information solely because of constructive stock ownership from a U.S. person and the person from whom the stock ownership is attributed furnishes all of the required information. If the U.S. taxpayer engaged in multiple PCTs during the tax year with the foreign corporation and used different methods to price the PCTs, check the appropriate boxes on line 5c to indicate which methods were selected as the best method for one or more of the PCTs reported in the tax year. A foreign corporation may need to report E&P with respect to all categories of income listed in the Instructions for Form 1118, with the exception of foreign branch category income. See instructions for Schedule J, Column (e), for specific information about the ten PTEP group columns. Category 3: A person acquires stock in total of stock ownership exceeds 10%. CFC1 is deemed to pay the $4 of withholding tax paid by CFC2 in Year 2. For these purposes, a CFCs gross tested income is its gross income less total exclusions (Schedule I1, line 4). In doing so, the corporate U. S. shareholder must determine whether it meets the statutory and regulatory requirements for section 245A DRD. However, see the instructions for Schedule J, later, for changes that affect how the schedule is completed. Cosponsors added, H1014 [7FE] From the Congressional Record, Volume 167 (2021) Corporation A has a section 951A inclusion of $20 because its pro rata share of CFC1s tested income ($50x) is offset by its pro rata share of CFC2s tested loss ($30x). If a GILTI high-tax exclusion under Regulations section 1.951A-2(c)(7)(viii) is effective with respect to the CFC for the CFC inclusion year, check the box in column (xiv) that corresponds to the item(s) of income to which the exception applies. See the instructions for Form 5471, Schedule I, Vegetable & Melon Farming (including potatoes & yams), Greenhouse, Nursery, & Floriculture Production, Other Crop Farming (including tobacco, cotton, sugarcane, hay, peanut, sugar beet & all other crop farming), Aquaculture (including shellfish & finfish farms & hatcheries), Forest Nurseries & Gathering of Forest Products, Support Activities for Crop Production (including cotton ginning, soil preparation, planting, & cultivating), Sand, Gravel, Clay, & Ceramic & Refractory Minerals Mining & Quarrying, Other Nonmetallic Mineral Mining & Quarrying, Electric Power Generation, Transmission & Distribution, Other Heavy & Civil Engineering Construction, Foundation, Structure, & Building Exterior Contractors (including framing carpentry, masonry, glass, roofing, & siding), Plumbing, Heating, & Air-Conditioning Contractors, Building Finishing Contractors (including drywall, insulation, painting, wallcovering, flooring, tile, & finish carpentry), Other Specialty Trade Contractors (including site preparation), Fruit & Vegetable Preserving & Specialty Food Mfg, Other Food Mfg (including coffee, tea, flavorings & seasonings), Women's, Girls' & Infants' Cut & Sew Apparel Mfg, Footwear Mfg (including rubber & plastics), Veneer, Plywood, & Engineered Wood Product Mfg, Petroleum Refineries (including integrated), Asphalt Paving, Roofing, & Saturated Materials Mfg, Resin, Synthetic Rubber, & Artificial & Synthetic Fibers & Filaments Mfg, Pesticide, Fertilizer, & Other Agricultural Chemical Mfg, Soap, Cleaning Compound, & Toilet Preparation Mfg, Alumina & Aluminum Production & Processing, Nonferrous Metal (except Aluminum) Production & Processing, Machine Shops; Turned Product; & Screw, Nut, & Bolt Mfg, Coating, Engraving, Heat Treating, & Allied Activities, Agriculture, Construction, & Mining Machinery Mfg, Commercial & Service Industry Machinery Mfg, Ventilation, Heating, Air-Conditioning, & Commercial Refrigeration Equipment Mfg, Engine, Turbine & Power Transmission Equipment Mfg, Semiconductor & Other Electronic Component Mfg, Navigational, Measuring, Electromedical, & Control Instruments Mfg, Manufacturing & Reproducing Magnetic & Optical Media, Other Electrical Equipment & Component Mfg, Furniture & Related Product Manufacturing, Motor Vehicle & Motor Vehicle Parts & Supplies, Professional & Commercial Equipment & Supplies, Household Appliances & Electrical & Electronic Goods, Hardware & Plumbing & Heating Equipment & Supplies, Jewelry, Watch, Precious Stone, & Precious Metals, Beer, Wine, & Distilled Alcoholic Beverages, Flower, Nursery Stock, & Florists' Supplies, Motorcycle, ATV, & All other Motor Vehicle Dealers, Automotive Parts, Accessories, & Tire Stores, Electronic Stores (including Audio, Video, Computer, & Camera Stores), Lawn & Garden Equipment & Supplies Stores, Supermarkets and Other Grocery (except Convenience) Stores, Cosmetics, Beauty Supplies, & Perfume Stores, Gasoline Stations (including convenience stores with gas), General Merchandise Stores, incl. Form 5471, officially called the Information Return of U.S. Sum of the amounts from lines 13b, 13d, 13e, 14b, 15b, and 16b. QBAI is the average of the CFC's aggregate adjusted bases, as of the close of each quarter of its taxable year, in specified tangible property used in its trade or business in the production of tested income, and for which a deduction is allowable under section 167. Instructions for Form 5471, Information Return of U.S. See the instructions for Line 6 for foreign currency translation. Report current-year taxes allocated and apportioned to the item of gross income reported for each QBU or tested unit as well as the aggregate amount of such foreign taxes allocated and apportioned to each group. Use column (c) to report the aggregate amount of the foreign corporation's pre-1987 section 964(a) E&P accumulated since 1962 and not previously distributed or deemed distributed. If the shareholder acquired the stock in more than one transaction, use a separate line to report each transaction. See the instructions for lines 3 and 4. Category 4 and 5 filers are not subject to the subpart F rules for: Deductions that are apportioned or allocated to exempt foreign trade income; Nonexempt foreign trade income (other than section 923(a)(2) nonexempt income, within the meaning of Do not include any foreign currency gain or loss with respect to PTEP within the reclassified section 965(b) PTEP group or the section 965(b) PTEP group. Subtract line 11 from line 10" field, "13. No credit is allowed for these taxes because only foreign income taxes paid or accrued to a foreign country or possession of the United States are allowed as a credit. In addition to the separate category codes referred to above, if you have more than one of the categories of income referred to above, you must complete and file a separate Schedule Q using code TOTAL that aggregates all amounts listed for each line and column in all other Schedules Q. Report taxes carried over to a foreign surviving corporation after an acquisition by a foreign corporation of the assets of another foreign corporation in a transaction described in section 381. A reference ID number is required only in cases in which no EIN was entered for the foreign corporation or pass-through entity owned by the foreign corporation. Enter on line 5e dividends not reported on line 5a, 5b, 5c, or 5d. The corporation is required to complete both lines only if the corporation provides a platform contribution to other controlled participants and is required to make platform contribution transaction payments to other controlled participants that provide a platform contribution to other controlled cost sharing arrangement participants. See section 3 of Rev. Enter the foreign corporations share of reasonably anticipated benefits (RAB) for the CSA during the tax year. "field, "68.Amount of line 61 that applies to other subpart F income. Foreign tax imposed by reason of a disregarded payment that is a contribution is assigned to the residual grouping. 92-70 for Dormant Foreign Corporation.. Line 7. Use line 4 to report the information required in columns (i) through (xiv) that is in a section 904 category but that is not of a type that is included in one of the subpart F income groups or a tested income group and is therefore assigned to the residual income group. Form 5471 (Schedule I-1) Global Intangible Low-Taxed Income (GILTI) 2018 Form 5471 (Schedule H) Current Earnings and Profits 2018 Form 5471 (Schedule E) Income, War Profits, and Excess Profits Taxes Paid or Accrued 2018 Inst 5471: Instructions for Form 5471, Information Return of U.S. See section 989(b). Under a contract under which the corporation is to furnish personal services if (a) some person other than the corporation has a right to designate (by name or by description) the individual who is to perform the services, or (b) the individual who is to perform the services is designated (by name or by description) in the contract; and. If an individual, estate, or trust that is a U.S. shareholder of a CFC makes an election under section 962 (962 electing shareholder), any inclusions under section 951 or 951A of the U.S. shareholder will be treated as received by a corporate U.S. shareholder for purposes of section 960. This should be the foreign taxable income base for determining the tax reported in column (i). Demystifying the 2021 IRS Form 5471 Schedule Q 14 Feb 2022 By Anthony Diosdi Schedule Q is used to report a controlled foreign corporation's ("CFC") income, deductions, and assets by CFC income groups. In column (a), report E&P described in section 959(c)(3) and earned after the repeal of section 902, that is, post-2017 E&P not previously taxed (post-2017 section 959(c)(3) balance). Amounts entered in Schedule R (Form 5471), column (d) are also included on line 9, column (f) of Schedule J (Form 5471) and Part I, line 8 of Schedule P (Form 5471), both of which are completed by separate category of income. If you are reporting with respect to more than one section 901(j) country, add to page 3 new lines 1m, 1n, 1o, etc. This line 14 was deleted to comport with the clarification in proposed Regulations section 1.367(b)-7(g) concerning hovering deficits (REG10165720 (November 12, 2020)). PTEP attributable to inclusions under previous section 951(a)(1)(C) and subpart F income inclusions reclassified as investments in excess passive assets. Name and EIN (if any) of the foreign partnership. The person that files Form 5471 must complete Form 5471 in the manner described in the instructions for Item FAlternative Information Under Rev.