Form 5472: Know Your Tax Obligations for Foreign Transactions

Are you engaging in foreign transactions? Make sure you know your obligations and stay up to date on the latest tax regulations with this video!

#foreigncorporations #taxes #forms #onlinefiling #compliance

▬▬ Contents of this video ▬▬▬▬▬▬▬▬▬▬

00:00 Introduction
00:20 LLC Requirements
00:48 Foreign Ownership
02:10 Reportable Transactions
02:21 Sales Transactions
02:39 Purchase Transactions
02:52 Fill Out Form
03:28 Single Member LLC
03:48 Formation of Entity
05:42 Conclusion

Doing business with foreign entities can be complicated, especially when it comes to filing taxes. The IRS requires certain transactions between corporations and foreign related parties to be reported on Form 8858. This form needs to be filed if the transactions listed on it are applicable. These can include stock sales, services provided, and other transactions. Failing to file this form can result in hefty penalties, so make sure to understand your obligations before engaging in foreign transactions. To stay up to date on the latest tax regulations, make sure to subscribe to this channel.

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[JamesBakerCPA]

Hello All, update for you - This form is due July 15th, 2020 for tax year 2019, and the penalty has been increased to $25, 000 for late or non filers!

[stefanhyltoft]

So if you have a dormant LLC without any transactions since filing, wouldn't you be exempted?
Exceptions from filing. A reporting corporation is not required to file Form 5472 if any of the following apply.
It had no reportable transactions of the types listed in Parts IV and VI of the form.
Part V is specifically about formation costs:
V Reportable Transactions of a Reporting Corporation That is a Foreign-Owned U.S. DE (see instructions)
Describe on an attached separate sheet any other transaction as defined by Regulations section 1.482-1(i)(7),
such as amounts paid or received in connection with the formation, dissolution, acquisition, and disposition
of the entity, including contributions to and distributions from the entity, and check here.

[carlosbernal]

Question, so an LLC is created and owner is 100% foreign. The LLC performs e-commerce business and has net income. Being that is a DE, this form needs to be filled, but than the LLC/DE doesn’t report nor pay taxes on the income?

[JamesBakerCPA]

In case you are watching this and have an LLC, this form would be due April 15th.

[jtoneal]

Excellent video - if I am not mistaken the Form 5472 ONLY applies for "related party" transactions. For example, the Delaware corporation is owned by a Foreign Shareholder and that shareholder contributes inventory worth USD 1, 000 and then the Delaware Corp. sells the inventory to a third party for USD 2, 000. Form 5472 would have to show the inventory of USD 1, 000 being contributed but NOT the subsequent sale for USD 2, 000 to the third party buyer of the inventory. Correct?

[YOUNGRYNTAA]

If you did't make any money or transaction for an LLC owned by a foreign individual you don't have to file the 5472 and 1120 ?

[michaeldorsey]

If an LLC is incorporated on 19 December, 2021 and EIN registered on 16th January, do we not need to file the form 5472 until April, 2023 for foreign owned entities (single owner)?

Thank you in advance

[fellayllc]

Hello James.Please tell me what does 25%foreign shareholder mean?Our company has just started and we don't deal with any stocks;should we leave it blank.Also we don't make any sales/purchases with any related party, should that also be left blank?
Please do answer.Thanks.

[Dxalbalde]

Hi! hope you can reply
If i have an LLC but never opened a bank account, should I file this?
For example, If I received a payment in a virtual bank account but directly to me AND NOT USING THE LLC, should I file this?

[dayalexa]

Do I need to have an itin to do the 1120 & 5472 ? I am single member LLC in New Mexico

[felicedamore]

This form is only applicable when the member is a foreigner and only owner?
What happens when there are two or more foreign partners?

[RaiiZen]

hi wanna ask, im foreign and have registered llc at 21 november 2021. i dont know about 5472 form, no email to me about this, what should i do?

[Rezmeplx]

For the transactions in Part V, have you confirmed if they should be listed in Part IV at all?

Only costs are formation costs in our case, so was thinking to put $0 in all of Part IV, and just attach the statement for Part V.

[martinlitwar]

Hi James! The income received by the LLC for selling it services is a reportable transaction? This would be a foreign owned disregarded entity LLC.
I'm being told that it's because is "money that the LLC received for me as I'm the owner". Is this accurate?

[hazelxu]

If a foreign person opened a smllc with cash and then made a check-the-box election to treat the SMLLC as a corp for tax purposes. Is the smllc still considered as a DRE and required file a form 5472 or no 5472 needed as there was no reportable transaction?

[thiswallz]

hi ! I have my llc from 2020 in delaware, and a bank account, 0 movement, 0 income, 0 payments. should I fill this? I never did, I only payed from my personal account to an agency to form the llc for register agent. should i fill this ? even if this was 2 years ago? what can I do there. thanks

[thalitavisser]

Hi James, Thank you for the great information that you put out all the time. I have a Wyoming LLC that was formed in 2020 and the accountant who completed my form 5472 and 1120 last year (2020 return) - for the question: Country(ies) under whose laws the reporting corporation files an income tax return as a resident and Principal country(ies) where business is conducted - they filled in US even though I am in South Africa (SF). I do all my business from here and don't have an office or staff in the US and have never traveled to the US. Should I change the answer to those questions on the 2121 forms or leave the answer US? Please help :) Thanks

[franciscorobillardea]

If you file a 1065 you don't have to file this form?

[kylla]

If a C-corp is 100% owned by a foreign company, not an individual, does this form still apply? And if the C-corp dissolve, is it required to file this form?

[Soypaulavargas]

Do I have to file this for by April even if I just created my LLC one month ago ?