Statements

Transfers to a corporation controlled by the transferor. Every significant transferor (as defined in Regulations section 1.351-3(d)(1)) that receives stock of a corporation in exchange for property in a nonrecognition event must include the statement required by Regulations section 1.351-3(a) on or with the transferor’s tax return for the tax year of the exchange. The transferee corporation must include the statement required by Regulations section 1.351-3(b) on or with its return for the tax year of the exchange, unless all the required information is included in any statement(s) provided by a significant transferor that is attached to the same return for the same section 351 exchange. If the transferor or transferee corporation is a controlled foreign corporation (CFC), each U.S. shareholder (within the meaning of section 951(b)) must include the required statement on or with its return.

Distributions under section 355. Every corporation that makes a distribution of stock or securities of a controlled corporation, as described in section 355 (or so much of section 356 as it relates to section 355), must include the statement required by Regulations section 1.355-5(a) on or with its return for the year of the distribution. A significant distributee (as defined in Regulations section 1.355-5(c)) that receives stock or securities of a controlled corporation must include the statement required by Regulations section 1.355-5(b) on or with its return for the year of receipt. If the distributing or distributee corporation is a CFC, each U.S. shareholder (within the meaning of section 951(b)) must include the statement on or with its return.

Election to reduce basis under section 362(e)(2)(C). If property is transferred to a corporation subject to section 362(e) (2), the transferor and the transferee corporation may elect, under section 362(e)(2)(C), to reduce the transferor’s basis in the stock received instead of reducing the transferee corporation’s basis in the property transferred. Once made, the election is irrevocable. For more information, see section 362(e) (2) and Regulations section 1.362-4. If an election is made, a statement must be filed in accordance with Regulations section 1.362-4(d)(3).

Foreign corporation with income excluded from gross in- come. If the foreign corporation has income excluded from gross income for the tax year, do not complete the Form 1120-F schedules. Instead, attach a statement to the return showing the types and amounts of income excluded from gross income. See Treaty or Code exemption , earlier, for more information.

Election to reduce liabilities under Regulations section 1.884-1(e)(3). If a taxpayer has a dividend equivalent amount that is subject to the branch profits tax under section 884(a), it may elect to reduce its U.S. liabilities under the branch profits tax regulations to treat its effectively connected earnings and profits as reinvested rather than remitted. A taxpayer may elect to reduce the amount of its liabilities by an amount that does not exceed the lesser of the amount of U.S. liabilities or the amount of U.S. liability reduction needed to reduce a dividend equivalent amount to zero. The election is made by attaching a statement to a timely filed tax return (including the extension due date) indicating the amount of U.S. liabilities reduced for branch profits tax purposes and the corresponding amount also reduced from U.S.-connected liabilities for interest expense allocation purposes. See Regulations section 1.884-1(e)(3).

Instructions for Form 1120-F (2025) 7