What’s New — 1225 Inst 5471 (PDF)

CFC tax years. Under section 70352 of Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One Big Beautiful Bill Act (OBBBA), for a tax year of a specified foreign corporation (SFC) beginning after November 30, 2025, the SFC may not have a tax year beginning one month earlier than the majority U.S. shareholder year.

Pro Rata Share Transition Rule. Under a transition rule provided by section 70354(c)(2) of the OBBBA (the Pro Rata Share Transition Rule), certain dividends paid (or deemed paid) by a CFC are not treated as dividends for purposes of applying section 951(a)(2)(B) (as unamended by the OBBBA). For guidance on the Pro Rata Share Transition Rule, see Notice 2025-75, 2025-52 I.R.B. 867, which taxpayers may rely on as provided in that notice.

Changes to Form 5471. On page 4 of Form 5471, Schedule G, question 3b is new. If the foreign corporation has one or more qualified business units (as defined in section 989(a)) with a functional currency different from its owner, the filer is required to check the “Yes” box and enter the number of Forms 8964-TRA attached to Form 5471 in the entry space provided. On page 6, Schedule G, line 21, is new. If, during the tax year, any portion of any increase or decrease to the foreign corporation’s E&P (including previously taxed E&P described in section 959) was attributable to a transaction described in section 304, the filer is required to check the “Yes” box on line 21a and do the following.

Enter on line 21b(1) the change in PTEP described in section 959(c)(1) and (c)(2).
Enter on line 21b(2) the change in other E&P described in section 959(c)(3).

allocated under guidance issued under section 70352(c) (1)(C) of the OBBBA.

Changes to instructions. The Schedule G, line 14 instructions have been updated. Question 22 has been changed to Question 22a. Question 22b has been added to identify dividends paid (or deemed paid) by a CFC that are potentially subject to the Pro Rata Share Transition Rule.

Schedule I, Worksheet A, line 46 instructions have been added to reflect the application of the Pro Rata Share Transition Rule.