Do you have questions you would like answered by your peers in the proformative community?

Anonymous Business Optimization Director

Offshore Assets et. al.

Asked on March 14, 2016

I am a minority owner (~5% ownership) in a small overseas corporation. I am considering increasing my ownership and becoming more actively involved in the management of the company, but have some hesitation in part due to the burden and requirements of filling in form 5471 and related IRS information. The question is whether these are in fact quite so burdensome, and if the move could actually increase the likelihood of getting audited.

Answers

Keith Perry Director of Global Accounting • March 25, 2016

Anon,

There are two parts to this:
-Can the foreign corp provide you with the info you need to file the 5471. Generally, that's not a big deal, but some smaller companies may have an issue with it.
-Does this trigger subpart F income, and if so, is that manageable?

These related questions should be taken to a tax attorney (international) who can guide you through the complexities, as it is not as simple as a "10% ownership trigger".