I am totally confused with form 5472, A person owns 100% of an US 1120 Corporation, he is the sole shareholder. He is a citizen of the UK. I have declared him a foreign person owner because he owns more than 25% of the corporation and more than 50% of the voting power.
Under question 5 of schedule K, no SS number, I listed his corporation ID. Should I list no ID or his corporation # is okay? Back to form 5472. I notice no transfers or payments to the foreign owner, however the company does a small amount of business (less than 2%) with the company that the Owner of the corporation works for. Also, I notice a long term liability account with this company, along with a deposit of funds from the company. These transactions appears to be a loan between the foreign company and the US corporation, however the corporation is not the owner of the US company only the sole shareholder. I am unaware if the Owner of the US corporation owns or have shares in the UK corporation. The US corporation had a loss in both years of operations.
After reviewing form 5472, I noticed that you do not have to file if monetary related or non-related transactions occurred between the foreign owner and the corporation.
I am concerned with the relationship between the foreign owner and the corporation the assist the US corporation with capital.
What questions should I be concerned with the foreign owner to prove relationship and if any transactions are reportable. The owner only investment is a $1,000 to start the US corporation.
I have also noticed the penalty for this form is very steep for not filing the form correctly and also timely. Another concern I have is the two years that I am preparing is 2007 and 2008 returns and no extensions was filed. Would the IRS consider the 5472 as being late and apply the $10,000 file if we are just filing for the two years above.
I am very interested in filing this form out correctly with-out any liability. It appears to me, because no monetary transactions were made between the US Corporation and the foreign owner, we do not have to file form 5472.
Under question 5 of schedule K, no SS number, I listed his corporation ID. Should I list no ID or his corporation # is okay? Back to form 5472. I notice no transfers or payments to the foreign owner, however the company does a small amount of business (less than 2%) with the company that the Owner of the corporation works for. Also, I notice a long term liability account with this company, along with a deposit of funds from the company. These transactions appears to be a loan between the foreign company and the US corporation, however the corporation is not the owner of the US company only the sole shareholder. I am unaware if the Owner of the US corporation owns or have shares in the UK corporation. The US corporation had a loss in both years of operations.
After reviewing form 5472, I noticed that you do not have to file if monetary related or non-related transactions occurred between the foreign owner and the corporation.
I am concerned with the relationship between the foreign owner and the corporation the assist the US corporation with capital.
What questions should I be concerned with the foreign owner to prove relationship and if any transactions are reportable. The owner only investment is a $1,000 to start the US corporation.
I have also noticed the penalty for this form is very steep for not filing the form correctly and also timely. Another concern I have is the two years that I am preparing is 2007 and 2008 returns and no extensions was filed. Would the IRS consider the 5472 as being late and apply the $10,000 file if we are just filing for the two years above.
I am very interested in filing this form out correctly with-out any liability. It appears to me, because no monetary transactions were made between the US Corporation and the foreign owner, we do not have to file form 5472.
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