Other Reporting Requirements — 1225 Inst 5471 (PDF)

Reporting exchange rates on Form 5471. When translating amounts from functional currency to U.S. dollars, you must use the method specified in these instructions. For example, when translating amounts to be reported on Schedule E, you must generally use the average exchange rate as defined in section 986(a). But, regardless of the specific method required, all exchange rates must be reported using a “divide-by convention” rounded to at least four places. That is, the exchange rate must be reported in terms of the amount by which the functional currency amount must be divided in order to reflect an equivalent amount of U.S. dollars. 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. Do not report the exchange rate as the number of U.S. dollars that equal one unit of foreign currency.

Note: You must round the result to more than four places if failure to do so would materially distort the exchange rate or the equivalent amount of U.S. dollars.

Example. During its annual accounting period, the foreign corporation paid income taxes of 30,255,400 Yen to Japan. The Schedule E instructions specify that the foreign corporation must translate these amounts into U.S. dollars at the average exchange rate for the tax year to which the tax relates in accordance with the rules of section 986(a). The average exchange rate is 108.8593 Japanese Yen to one U.S. dollar or (0.009184) U.S. dollar to one Japanese Yen. The foreign corporation divides 30,255,400 Yen by 108.8593 to determine the U.S. dollar

Instructions for Form 5471 (Rev. 12-2025) 9

amount to enter in column (l) of Schedule E, Part I, Section 1, line 1. Line 1 of Schedule E, Part I, Section 1, is completed in relevant part as follows.

File this summary return in the manner described under When and Where To File , earlier.

Treaty-Based Return Positions You are generally required to file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), to disclose a return position that any treaty of the United States (such as an income tax treaty; an estate and gift tax treaty; or a friendship, commerce, and navigation treaty):

Enter the name of the payor entity in column (a).
Enter the payor entity’s employer identification number (EIN) or reference ID number in column (b).
Enter “JA” in column (d).
Enter “JPY” in column (i).
Enter “30,255,400 Yen” in column (j).
Enter “108.8593” in column (k).
Enter “277,931” in column (l).

Computer-Generated Form 5471 and Schedules Generally, all computer-generated forms must receive prior approval from the IRS and are subject to an annual review. However, see the Exception below. Requests for approval may be submitted electronically to substituteforms@irs.gov , or requests may be mailed to:

Internal Revenue Service Attention: Substitute Forms Program C:DC:TS:CAR:MP:P:TP 1111 Constitution Ave. NW Room 6554 Washington, DC 20224

Exception. If a computer-generated Form 5471 and its schedules conform to and do not deviate from the official form and schedules, they may be filed without prior approval from the IRS.

Important. Be sure to attach the approval letter to Form 5471. However, if the computer-generated form is identical to the IRS-prescribed form, it does not need to go through the approval process, and an attachment is not necessary.

Every year, the IRS issues a revenue procedure to provide guidance for filers of computer-generated forms. In addition, every year, the IRS issues Pub. 1167, General Rules and Specifications for Substitute Forms and Schedules, which reprints the most recent applicable revenue procedure. Pub. 1167 is available at IRS.gov/pub 1167 .

Dormant Foreign Corporations Rev. Proc. 92-70, 1992-2 C.B. 435, provides a summary filing procedure for filing Form 5471 for a dormant foreign corporation (defined in section 3 of Rev. Proc. 92-70). This summary filing procedure will satisfy the reporting requirements of sections 6038 and 6046.

If you elect the summary procedure, complete only page 1 of Form 5471 for each dormant foreign corporation as follows.

Overrides or modifies any provision of the Internal Revenue Code; and

See Form 8833 for exceptions.

Failure to make a required disclosure may result in a $1,000 penalty ($10,000 for a C corporation). See section 6712.

Section 362(e)(2)(C) Elections The transferor and transferee in certain section 351 transactions may make a joint election under section 362(e)(2)(C) to limit the transferor’s basis in the stock received instead of the transferee’s basis in the transferred property. The election is made by a statement as provided in Regulations section 1.362-4(d)(3).

Caution: Do not attach the statement described above to Form 5471.

Corrections to Form 5471 If you file a Form 5471 that you later determine is incomplete or incorrect, file a corrected Form 5471 with an amended tax return, using the amended return instructions for the return with which you originally filed Form 5471. Enter “Corrected” at the top of the form and attach a statement identifying the changes.

Foreign Disregarded Entities and Branches If the foreign corporation for which you are furnishing information is the tax owner of a foreign disregarded entity (FDE) or foreign branch (FB), or a partner in a partnership, the amounts reported on Form 8858, Schedules K-1 and K-3 of Form 1065, or Schedules K-1 and K-3 of Form 8865 must be included in determining the amounts reported on Form 5471. The “tax owner” of an FDE is the person that is treated as owning the assets and liabilities of the FDE for purposes of U.S. income tax law.