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0 Compliance Aspects of the Forms 1118 and 5471 Edward Umling CPA, LLM December 7, 2009 North American International Tax Conference
0
Compliance Aspects of the
Forms 1118 and 5471
Edward Umling CPA, LLM
December 7, 2009
North American
International Tax Conference
1
Form 1118 — Foreign Tax Credits — Corporations
This form is not mandatory. It is used to claim a credit for income taxes paid to a foreign country on which U.S. taxes are also paid on the same income.
You have up to 10 years to file this form!
2
Form 5471 — Information return of US Persons —
Certain Foreign Corporations
Form 5471 is used by certain U.S. citizens and residents who are officers, directors, or shareholders in certain foreign corporations. The form and schedules are used to satisfy the reporting requirements of I.R.C. 6038 and 6046.
Form 5471 is due when your income tax return is due, including extensions. Attach Form 5471 and schedules to your income tax return.
3
Form Overview
4
17,337,549
to Schedule C line 13
11,717,690
to Schedule C line 15To 1120 page 1
line 7To 1120 page 1
line 10
This number may carry
to page 2
From 1118 Page 3 Part I
5
From the 1120 page 1 line 30
From 1118
page 3 part 1
column 10
To 1120 page 3
schedule J line 5a From the 1120 page 3
Schedule J line 4
43,520,504
2 possible entries:
either the schedule J part 1 line 11 or, amount from 1118 page 1 column 13
From 5471
Schedule E
15,230,420
.558
6
To 1118 page 2
Schedule B
From 1118 page 4
Part 1 column 7From 5471 To 1118
page 1 Schedule A
7
To Page 3 Schedule
C Column 6bFrom 5471 page 4
Schedule I
8
From 1118 Page
1 Columns
(2a+2b+3a+3b)
From 1118
Page 1
column 5
From
1118
Page 1
column 7
9
To
Form
1118
Page 2
Line 7a
From 1120
Page 3
Schedule J
line 10
10
To page 1 line 4
From 1118
Page 1
Column2a
and 3a
From 1118
page 1
column 2b
and 3b
Schedule M-3 Item
11
From the 1118 page 2
part II line 5
To 1118 page 2
part II line 9
To 1120 page 1 line 31
Calculated
Tax
Local Currency Number relates to
translated amounts on 1118 page 1
schedule A
14,390,165 /.83 =17,337,549
*WARNING*
This schedule is functional currency only!
14,390,165
Actual Taxes Paid
To Form 1118 page 2
Schedule B Column (h)
Amount carries to 1118 page 1 Schedule A
(192,014 * .97740 ) = 187,675
3,250,000
To 1118 page 4 schedule D
Debrief
Dividends must reconcile
Other income items must
reconcile
Tax liability must reconcile
Foreign reporting must tie-out
15
If you have any questions please contact
Edward Umling, Parente Randolph, LLC
Phone (412) 697-6427, email: [email protected]
The informal comments and the information presented in these
slides should not be construed as constituting tax advice
applicable to any specific taxpayer because each taxpayer’s facts
are different
To ensure compliance with requirements imposed by the IRS, we
inform you that any U.S. tax advice mentioned in the presentation
or contained in these slides is not intended or written to be used,
and cannot be used, for the purpose of (i) avoiding penalties
under the Internal Revenue Code or (ii) promoting, marketing or
recommending to another party any transactions or matters
addressed herein.
Thank You for
Attending The Conference
Edward Umling CPA, LLM
412-391-1994 Ext 259
