Скачать или смотреть Difference between IRS form 8621 (PFIC) and 5471 - disclosure of foreign assets

Do you own foreign assets? Are you filing the correct IRS forms?





Here’s a breakdown of the differences between Form 8621 and Form 5471, and who needs to file each one:

Form 8621 (PFIC - Passive Foreign Investment Company)

Purpose:

This form is used to report investments in Passive Foreign Investment Companies (PFICs).

A PFIC is typically a foreign-based corporation that has 75% or more of its gross income as passive income or at least 50% of its assets produce passive income.

Who Needs to File:

U.S. persons (citizens, residents, or entities) who are shareholders in a PFIC:

Key Reporting Requirements:

Information about the PFIC itself.

Income from the PFIC, distributions, and gains from sales of PFIC stock.

Elections such as Qualified Electing Fund (QEF) or Mark-to-Market.

Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations)

Purpose:

This form is used to report ownership in foreign corporations. It covers U.S. persons who are officers, directors, or shareholders in certain foreign corporations.

Who Needs to File: U.S. persons who are:

Shareholders in a Controlled Foreign Corporation (CFC).

Officers or directors of a foreign corporation in which a U.S. person owns at least 10% of the stock.

Key Reporting Requirements:

Detailed information about the foreign corporation, including income, earnings, profits, assets, and transactions.

Various schedules to report different types of information such as stock ownership, income statement, and balance sheet details.

Filing Criteria and Penalties

Form 8621:

Required for any U.S. person holding shares in a PFIC. Failure to file can result in significant penalties, including taxes on PFIC income as ordinary income.

Form 5471:

Required for U.S. persons meeting specific ownership thresholds in a foreign corporation. Penalties for failing to file or filing late include fines of $10,000 per form,

plus additional penalties for continued failure to file.

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