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Information provided on this site is for general guidance only and
is often simplified. Actual IRS procedures are complex, and taxpayers
should obtain professional assistance or use IRS sources for complete
information.
Foreign
Corporations The corporate
forms businesses may use to operate outside the
US and their tax characteristics.
Controlled
Foreign Corporation A
US person who is a shareholder of a CFC is potentially
liable for US tax and required to keep records.
DISC
A corporation must elect IC-DISC
status by filing Form 4876-A.
Controlled
Foreign Corporation
A
US person who is a shareholder of a CFC is potentially
liable for US tax and required to keep records
to establish the amount of gross income, credits,
deductions, or other income tax matters relating
to business transactions between the CFC and the
US person and certain parties related to the US
person.
Some
of the filing requirements for such shareholders
are as follows.
You must file Form 5471 if:
You are a U.S. person who owns more than 50%
of a CFC;
You are an officer or director of a CFC and,
since the last time a Form 5471 was filed, a
US person has acquired 5% or more in value of
CFC stock, or acquires an additional 5% or more
in value of CFC stock.
You
are a US person who acquires 5% or more stock
in a CFC, or acquires an additional 5 percent
or more CFC stock, or owns 5% or more stock
when the CFC is reorganized, or disposes of
sufficient CFC stock to reduce your personal
interest below 5%.
You become a US person while owning 5% or more
of the CFC stock.
You
own (on the last day of the foreign corporation's
tax year) from 10 to 50% of stock in a foreign
corporation that is a CFC for an uninterrupted
period of 30 days or more during any tax year
of the foreign corporation.
You own (on the last day of the foreign corporation's
tax year) any stock in a CFC that is a Captive
Insurance Company.
Form
926, Return by a US Transferor of Property to
a Foreign Corporation, Foreign Estate or Trust,
or Foreign Partnership if:
You transfer property to a CFC as paid-in surplus
or contributions to capital. Form 926 is due
on the day you make the transfer and should
be filed with the Internal Revenue Service Center
where you are required to file your income tax
return.
You
transfer property to a CFC in an exchange described
in section 367(a) or (d), or you elect to apply
the principles similar to section 367 to the
transfer.
Form 1042, Annual Withholding Tax Return for US
Source Income of Foreign Persons, must be filed
to report tax withheld on certain payments to
the CFC or other foreign person.
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In particular, users of the site are advised to take appropriate professional
advice before committing themselves to involvement in offshore jurisdictions,
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The Lowtax Network 1999 - 2007. Contact
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