As such, the exchange rate must be reported as the units of foreign currency that equal one U.S. dollar, rounded to at least four places. Enter the line 5c functional currency amount translated into U.S. dollars at the average exchange rate for the foreign corporation's tax year. In other words, is line 36 of Worksheet A greater than line 37c? Every year, the IRS issues a revenue procedure to provide guidance for filers of computer-generated forms. So, if necessary, enter negative amounts on line 15 of columns (a), (b), and (c) in amounts sufficient to reduce line 13, columns (a), (b), and (c) to zero. If the sum of foreign base company income (determined without regard to section 954(b)(5)) and gross insurance income (as defined in section 954(b)(3)(C)) for the tax year is less than the smaller of 5% of gross income for income tax purposes, or $1 million, then no portion of the gross income for the tax year is treated as foreign base company income or insurance income. Amounts reported on Schedule E may include taxes paid or accrued by the foreign corporation or a pass-through entity (for example, partnership or disregarded entity) owned by the foreign corporation. See section 381(c)(2)(B) and Regulations sections 1.367(b)-7(d)(2)(i) (post-1986 undistributed earnings) and 1.367(b)-7(e)(1) (pre-1987 E&P not previously taxed). Line 2g has been modified to update the references to Schedule E, due to changes made to that schedule. The additional penalty is limited to a maximum of $50,000 for each failure. For these purposes, a CFCs gross tested income is its gross income less total exclusions (Schedule I1, line 4). Proc. However, in the case of Schedule E (Form 5471) filers, if a foreign corporation has more than one of those categories of income, the filer must also complete and file a separate Schedule E (including Schedule E-1) using code TOTAL that aggregates all amounts listed for each line and column of all other Schedules E and E-1. As such, the exchange rate must be reported as the units of foreign currency that equal one U.S. dollar, rounded to at least four places. Income tax expense (benefit) includes current and deferred income tax expense (benefit). If you are reporting with respect to more than one section 901(j) country, add to page 3 new lines 1m, 1n, 1o, etc. For these purposes, policyholders must be treated as shareholders. Enter the month, day, and year using the following format: MM-DD-YYYY. C3.ai, Inc. ("C3 AI," "C3," or the "Company") (NYSE: AI), the Enterprise AI application software company, today announced financial results for its fiscal third quarter ended January 31, 2023. However, if Corporation A does not know Corporation Bs section 951A inclusion at the time Corporation A files its Form 5471, Corporation A will only be able to complete Schedule J, Part I, with respect to its PTEP of $20x on line 8, column (e)(viii). Criminal penalties under sections 7203, 7206, and 7207 may apply for failure to file the information required by sections 6038 and 6046. See section 960(b). 2019-40). For example, if you are the sole owner of a CFC (that is, you are described in Categories 4 and 5a), complete all six pages of Form 5471 and separate Schedules E, G-1, H, I-1, J, M, P, Q, and R. Complete a separate Form 5471 and all applicable schedules for each applicable foreign corporation. If so, an adjustment for the prior year amended return (and its impact on intervening years) should be reflected on line 2. The estimated burden for individual and business taxpayers filing this form is approved under OMB control number 1545-0074 and 1545-0123 and is included in the estimates shown in the instructions for their individual and business income tax return. Note that the rules contained in these regulations have later effective dates. For purposes of Category 2 and Category 3, a U.S. person is: A citizen or resident of the United States. Attach a statement detailing the nature and amount of any adjustments not accounted for in the E&P determined before reduction for distributions and inclusions (that is, adjustments other than those listed on lines 2a through 5b). 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. Average amount of U.S. property held (directly or indirectly) by the C.F.C. See the instructions for Schedule M, later, for additional information, including the information required on the required statement for lines 14 and 29. ", "40.Section 954(c) subpart F Foreign Personal Holding Company Income subtotal. 1167, General Rules and Specifications for Substitute Forms and Schedules, which reprints the most recent applicable revenue procedure. Subtract line 51 from line 50. Use lines 1a through 1e to enter the passive category foreign personal holding company income of the CFC under the appropriate income group (dividends, interest, rents, royalties, and annuities; net gain from certain property transactions; net gain from commodities transactions; net foreign currency gain; and income equivalent to interest), each of which is also treated as a separate subpart F income group under Regulations section 1.960-1. Therefore, the reporting on Schedule J is necessary regardless of whether the U.S. shareholder made a section 962 election. For more information, see section 6046 and Regulations section 1.6046-1. Persons With Respect To Certain Foreign Corporations. For this purpose the assets of the taxable unit making the remittance are determined in accordance with the rules of Regulations section 1.987-6(b) that apply in determining the source and separate category of exchange gain or loss on a section 987 remittance, as modified in two respects. Only net accounts receivables and payables to the extent that the CFCs books net the accounts payable against the receivables as payment of the accounts receivable. 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. On line 3, the phrase (total of lines 2a-2e) has been replaced with (combine lines 2a through 2e) to reflect the fact that negative amounts can be entered on lines 2a through 2e. Form 5471 is an important IRS tool for assessing the scope of a taxpayer's foreign holdings and operations. A U.S. shareholder who is a Category 5 filer (defined above) and who is an unrelated section 958(a) U.S. shareholder with respect to a foreign-controlled corporation (defined below) may complete Form 5471 for that foreign-controlled corporation and complete only the information required of a Category 5b filer. Such taxes are reported in Part III. If the CFC has tested income on line 6, enter the Qualified Business Asset Investment (QBAI) (defined below). Category 1a, 1c, 3, 4, 5a, and 5c filers must complete Part II. You are generally required to file Form 5471, Information Return of U.S. 10% or more of the total combined voting power of all classes of stock with voting rights. Proc. 374, for rules for computing section 986(c) gain or (loss) and Regulations section 1.986(c)-1(a) and (b) for rules for computing section 986(c) gain or (loss) recognized with respect to distributions of PTEP within the reclassified section 965(a) PTEP group and the section 965(a) PTEP group. Include net income from notional principal contracts (except a contract entered into to hedge inventory property). 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. Category 3 filers must attach a statement that includes: The amount and type of any indebtedness the foreign corporation has with the related persons described in Regulations section 1.6046-1(b)(11); and. Enter foreign income taxes that are disallowed under section 901(j), generally foreign income taxes paid or accrued to certain sanctioned countries. 2009-37, 2009-36 I.R.B. It would be very rare in 2021 for a domestic corporation to have taxes deemed paid under section 902 on distributions with respect to a pre-2018 foreign corporate tax year.