Is the entity a foreign corporation - incorporated or organized under the laws of a country other than the United States?
A foreign corporation is any corporation not organized under US law. IRC §7701(a)(5). Entities treated as partnerships or disregarded entities under check-the-box rules are not corporations and are not subject to Form 5471 (but may be subject to Form 8865). A foreign entity with a valid check-the-box election to be treated as a corporation IS a corporation for this purpose.
2
Your Status
Question 2 of 7
Are you a US person? (US citizen, resident alien, domestic corporation, domestic partnership, domestic estate or trust)
Nonresident alien individuals are generally not subject to Form 5471. US residency is determined under IRC §7701(b) - green card holders and those meeting the Substantial Presence Test are US persons. Domestic corporations with foreign subsidiaries are US persons subject to Form 5471.
3
Your Ownership
Question 3 of 7
What is your ownership percentage in the foreign corporation, directly, indirectly, AND constructively (including attribution)?
Include constructive ownership under IRC §318 as modified by §958(b). You must attribute stock owned by: (1) your spouse, children, grandchildren, and parents; (2) stock owned by partnerships and estates (proportionately by their partners or beneficiaries), trusts (by actuarial interest or grantor ownership), and corporations in which you own 10% or more (proportionately; 10% substituted for 50% by §958(b)(3)); (3) stock you own is attributed to partnerships, estates, trusts, and to a corporation in which you own 50%+. For foreign corporation taxable years beginning before 2026, TCJA repealed §958(b)(4), so stock owned by a foreign person could be attributed to a U.S. person through a domestic entity; P.L. 119-21 §70353 restored §958(b)(4) for foreign corporation taxable years beginning after December 31, 2025. IRC §§318(a), 958(b), 951(b).
4
CFC Status
Question 4 of 7
In aggregate, do US shareholders (each owning 10%+ by vote or value) collectively own more than 50% of the foreign corporation?
This is the CFC test. If US shareholders in aggregate own >50% of total voting power or total value on any day during the tax year, the corporation is a CFC. IRC §957(a). You do not need to individually own 50%+. Identify every US person with 10%+ direct or constructive ownership and sum their interests. Include constructive ownership under modified §318 rules.
5
Acquisition Event
Question 5 of 7
During the tax year, did you newly acquire stock bringing your ownership to 10% or more for the first time?
Category 3 applies to US persons who acquire stock that, together with stock already owned, meets the 10% stock ownership requirement (or that alone meets it), who become US persons while meeting it, or who dispose of enough stock to fall below it. IRC §6046(a); Treas. Reg. §1.6046-1. A Category 3 filing is required in the year of acquisition even if no CFC status exists.
6
Officer or Director
Question 6 of 7
Are you a US person who is an officer or director of this foreign corporation?
Category 2 applies to US citizens or residents who are officers or directors of a foreign corporation in which a US person acquires 10%+ of the stock (or an additional 10%+) during the year. This filing obligation applies even if you own no stock. IRC §6046(a)(1)(A).
7
25% Threshold (SFC)
Question 7 of 7
Is the foreign corporation a CFC, or is at least one domestic corporation a US shareholder (10% or more by vote or value) of it? (Section 965 Specified Foreign Corporation test)
For Category 1, a section 965 specified foreign corporation (SFC) is a CFC or any foreign corporation with respect to which one or more domestic corporations are U.S. shareholders (a PFIC that is not a CFC as to the shareholder is excluded). Category 1 filers are U.S. shareholders of a section 965 SFC at any time during its tax year, even if it is not a CFC. IRC §965(e)(1); Instructions for Form 5471.
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