Table of Contents
- Identifying Information
- Annual Accounting Period
- Name Change
- Address
- Item A—Identifying Number
- Item B—Category of Filer
- Item C—Percentage of Voting Stock Owned
- Item D—Person(s) on Whose Behalf This Information Return Is Filed
- Item 1b(2)—Reference ID Number
- Items 1f and 1g—Principal Business Activity
- Item 1h—Functional Currency
- Schedule B
- Schedule C
- Schedule E
- Schedule F
- Schedule G
- Schedule H
- Schedule I
- Schedule J
- Schedule M
- Schedule O
Important:
If the information required in a given section exceeds the space provided within that section, do not write “see attached” in the section and then attach all of the information on additional sheets. Instead, complete all entry spaces in the section and attach the remaining information on additional sheets. The additional sheets must conform with the IRS version of that section.
Enter, in the space provided below the title of Form 5471, the annual accounting period of the foreign corporation for which you are furnishing information. Except for information contained on Schedule O, report information for the tax year of the foreign corporation that ends with or within your tax year. When filing Schedule O, report acquisitions, dispositions, and organizations or reorganizations that occurred during your tax year.
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That is treated as a CFC under subpart F and
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In which more than 50% of the total voting power or value of all classes of stock of the corporation is treated as owned by a U.S. shareholder.
If the name of either the person filing the return or the corporation whose activities are being reported changed within the past 3 years, show the prior name(s) in parentheses after the current name.
Include the suite, room, or other unit number after the street address. If the post office does not deliver mail to the street address and the U.S. person has a P.O. box, show the box number instead.
The identifying number of an individual is his or her social security number (SSN). The identifying number of all others is their employer identification number (EIN). If a U.S. corporation that owns stock in a foreign corporation is a member of a consolidated group, list the common parent as the person filing the return and enter its EIN in Item A. Identify only the direct owners in Item D who are also members of the consolidated group; constructive owners who are also members of the consolidated group are not required to be listed.
Complete Item B to indicate the category or categories that describe the person filing this return. If more than one category applies, check all boxes that apply.
Enter the total percentage of the foreign corporation's voting stock you owned directly, indirectly, or constructively at the end of the corporation's annual accounting period.
The person that files the required information on behalf of other persons must complete Item D. See Multiple filers of same information, earlier. In addition, a separate Schedule I must be filed for each person described in Category 4 or 5.
Except for members of the filer's consolidated return group and those persons claiming the constructive ownership exception, all persons identified in Item D must attach a statement to their tax returns that includes the following information:
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A statement that their filing requirements have been or will be satisfied;
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The name, address, and identifying number of the return with which the information was or will be filed; and
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The IRS Service Center where the return was or will be filed. If the return was or will be filed electronically, enter “e-file.”
A reference ID number (defined below) is required on line 1b(2) only in cases where no EIN was entered on line 1b(1) for the foreign corporation. However, filers are permitted to enter both an EIN on line 1b(1) and a reference ID number on line 1b(2). If applicable, enter the reference ID number you have assigned to the foreign corporation identified on line 1a.
A "reference ID number" is a number established by or on behalf of the U.S. person identified at the top of page 1 of the form that is assigned to a foreign corporation with respect to which Form 5471 reporting is required. These numbers are used to uniquely identify the foreign corporation in order to keep track of the corporation from tax year to tax year.
The reference ID number must meet the requirements set forth below.
Note.
Because reference ID numbers are established by or on behalf of the U.S. person filing Form 5471, there is no need to apply to the IRS to request a reference ID number or for permission to use these numbers.
Note.
The reference ID number assigned to a foreign corporation on Form 5471 generally has relevance only on Form 5471 and its schedules and should generally not be used with respect to that foreign corporation on any other IRS tax form. However, the foreign corporation’s reference ID number should also be entered on Form 8858 if the foreign corporation is listed as a tax owner of a foreign disregarded entity (FDE) on Form 8858. See the instructions for Form 8858, line 3c(2) for more information.
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In the case of a merger or acquisition, a Form 5471 filer must use a reference ID number which correlates the previous reference ID number with the new reference ID number assigned to the foreign corporation.
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In the case of an entity classification election that is made on behalf of a foreign corporation on Form 8832, Regulations section 301.6109-1(b)(2)(v) requires the foreign corporation to have an EIN for this election. For the first year that Form 5471 is filed after an entity classification election is made on behalf of the foreign corporation on Form 8832, the new EIN must be entered on line 1b(1) of Form 5471 and the old reference ID number must be entered on line 1b(2). In subsequent years, the Form 5471 filer may continue to enter both the EIN on line 1b(1) and the reference ID number on line 1b(2), but must enter at least the EIN on line 1b(1).
Enter the principal business activity code number and the description of the activity from the list beginning on page 16.
Enter the foreign corporation's functional currency. Regulations sections 1.6038-2(h) and 1.6046-1(g) require that certain amounts be reported in U.S. dollars and/or in the foreign corporation's functional currency. The specific instructions for the affected schedules state these requirements.
Special rules apply for foreign corporations that use the U.S. dollar approximate separate transactions method of accounting (DASTM) under Regulations section 1.985-3. See the instructions for Schedule C and Schedule H.
Category 3 and 4 filers must complete Schedule B for U.S. persons that owned (at any time during the annual accounting period), directly or indirectly through foreign entities, 10% or more in value or voting power of any class of the corporation's outstanding stock.
If the foreign corporation uses the U.S. dollar approximate separate transactions method of accounting (DASTM) under Regulations section 1.985-3, the functional currency column should reflect local hyperinflationary currency amounts computed in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The U.S. dollar column should reflect such amounts translated into dollars under U.S. GAAP translation rules. Differences between this U.S. dollar GAAP column and the U.S. dollar income or loss figured for tax purposes under Regulations section 1.985-3(c) should be accounted for on Schedule H. See Schedule H, Special rules for DASTM, below.
List income, war profits, and excess profits taxes paid or accrued to the United States and to any foreign country or U.S. possession for the annual accounting period. Report these amounts in column (b) in the local currency in which the taxes are payable. Translate these amounts into U.S. dollars at the average exchange rate for the tax year to which the tax relates unless one of the exceptions below applies. See section 986(a).
If one of the following exceptions applies, use the exchange rate in effect on the date you paid the tax.
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The tax is paid before the beginning of the year to which the tax relates.
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For tax years beginning after December 31, 2004, there is an election in effect under section 986(a)(1)(D) to translate foreign taxes attributable to the CFC using the exchange rate in effect on the date of payment.
Enter the exchange rate used in column (c). Report the exchange rate using the “divide-by convention” specified under Reporting Exchange Rates on Form 5471, earlier. Enter the translated dollar amount in column (d).
If the foreign corporation uses DASTM, the tax balance sheet on Schedule F should be prepared and translated into U.S. dollars according to Regulations section 1.985-3(d), rather than U.S. GAAP.
If the foreign corporation owned at least a 10% interest, directly or indirectly, in any foreign partnership, attach a statement listing the following information for each foreign partnership:
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Name and EIN (if any) of the foreign partnership;
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Identify which, if any, of the following forms the foreign partnership filed for its tax year ending with or within the corporation's tax year: Form 1042, 1065 or 1065-B, or 8804;
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Name of the tax matters partner (if any); and
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Beginning and ending dates of the foreign partnership's tax year.
Check the “Yes” box if the foreign corporation is the tax owner of an FDE. 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.
If the foreign corporation is the tax owner of an FDE and you are a category 4 or 5 filer of Form 5471, you are required to attach Form 8858 to Form 5471.
If the foreign corporation is the tax owner of an FDE and you are not a category 4 or 5 filer of Form 5471, you must attach the statement described below in lieu of Form 8858.
Use Schedule H to report the foreign corporation's current earnings and profits (E&P) for U.S. tax purposes. Enter the amounts on lines 1 through 5c in functional currency.
sections 471 (incorporating the provisions of section 263A) and 472 and the related regulations.
Use Schedule I to report in U.S. dollars the U.S. shareholder's pro rata share of income from the foreign corporation reportable under subpart F and other income realized from a corporate distribution.
Note.
A separate Schedule I must be filed by each Category 4 or 5 U.S. shareholder for whom reporting is furnished on this Form 5471.
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Adjusted net foreign base company income (lines 1 through 19);
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Adjusted net insurance income (line 20);
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Adjusted net related person insurance income (line 21);
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International boycott income (line 22);
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Illegal bribes, kickbacks, and other payments (line 23); and
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Income from a country described in section 952(a)(5) (line 24).
Important:
If the subpart F income of any CFC for any tax year was reduced because of the current E&P limitation (see the instructions for line 29 of Worksheet A, later), any excess of the E&P of the CFC for any subsequent tax year over the subpart F income of the CFC for the tax year must be recharacterized as subpart F income.
Other amounts not eligible for deferral that are reported on Schedule I include:
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Earnings invested in U.S. property (Worksheet B);
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Amounts withdrawn from qualified investments in less developed countries and amounts withdrawn from qualified investments in foreign base company shipping operations (Worksheet C); and
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Amounts withdrawn from investment in export trade assets (Worksheet D).
Enter the factoring income (as defined in section 864(d)(1)) if no subpart F income is reported on line 1a, Worksheet A, because of the operation of the de minimis rule (see lines 1a, 9, and 11 of Worksheet A and the related instructions).
Add lines 1 through 5. Enter the result here and on your tax return. For a corporate U.S. shareholder, enter the result on Form 1120, Schedule C, line 14, or on the comparable line of other corporate tax returns. For a noncorporate U.S. shareholder, enter the result on Form 1040, line 21 (Other Income), or on the comparable line of other noncorporate tax returns.
Enter the dividends you received from the foreign corporation that were not previously taxed under subpart F in the current year or in any prior year.
If previously taxed E&P described in section 959(a) or (b) was distributed, enter the amount of foreign currency gain or (loss) on the distribution, computed under section 986(c). See Notice 88-71, 1988-2 C.B. 374, for rules for computing section 986(c) gain or (loss).
For a corporate U.S. shareholder, include the gain or (loss) as “other income” on line 10 of Form 1120, or on the comparable line of other corporate tax returns. For a noncorporate U.S. shareholder, include the result as “other income” on line 21 of Form 1040, or on the comparable line of other noncorporate tax returns.
Certain current year deficits of a member of the same chain of corporations may be considered in determining subpart F income. See section 952(c)(1)(C).
Worksheet A
Worksheet A (continued)
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Foreign base company shipping income as defined in former section 954(f).
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Foreign personal holding company income derived in the active conduct of a CFC of a banking, finance, or similar business (section 954(h)).
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Certain investment income derived by a qualifying insurance company and by certain qualifying insurance branches (sections 953(a)(2) and 954(i)).
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Exempt insurance income under section 953(e) or that is not treated as foreign personal holding company income under the active conduct of an insurance business exception (section 954(i)); the active conduct of a banking, financing, or similar business exception (section 954(h)); or the securities dealer exception (section 954(c)(2)(C)(ii)).
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Interest from conducting a banking business that is “export financing interest” (section 904(d)(2)(G));
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Rents and royalties from actively conducting a trade or business received from a person other than a “related person” (as defined in section 954(d)(3)); and
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Dividends, interest, rent or royalty income from related corporate payors described in section 954(c)(3). However, see section 964(e) for an exception.
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Property that produces the type of income reportable on line 1a.
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An interest in a trust, partnership, or REMIC. However, see the instructions for line 1i for an exception that provides for look-through treatment for certain sales of partnership interests.
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Property that does not produce any income.
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Income, gain, deduction, or loss from any transaction (including a hedging transaction) and transactions involving physical settlement of a regular dealer in property, forward contracts, option contracts, and similar financial instruments (section 954(c)(2)(C)).
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Gains and losses from the sale or exchange of any property that, in the hands of the CFC, is property described in section 1221(a)(1).
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Under a contract under which the corporation is to furnish personal services if (a) some person other than the corporation has a right to designate (by name or by description) the individual who is to perform the services or (b) the individual who is to perform the services is designated (by name or by description) in the contract, and
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From the sale or other disposition of such a contract.
Note.
The above rules apply with respect to amounts received for services under a particular contract only if at some time during the tax year 25% or more in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for the individual who has performed, is to perform, or may be designated (by name or by description) as the one to perform, such services.
through 21. Otherwise, go to line 12.
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That is attributable to the issuing (or reinsuring) of any insurance or annuity contract:
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For property in, liability from an activity in, or for the lives or health of residents of a country other than the country under the laws of which the CFC is created or organized or
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For risks not described in 1 above, resulting from any arrangement in which another corporation receives a substantially equal amount of premiums or other consideration for issuing (or reinsuring) a contract described in 1 above.
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That would, subject to the modifications provided in sections 953(b)(1) and 953(b)(2), be taxed under subchapter L (insurance company tax) if such income were income of a domestic insurance company.
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At all times during the foreign corporation's tax year, less than 20% of the total combined voting power of all classes of stock of the corporation entitled to vote, and less than 20% of the total value of the corporation, is owned (directly or indirectly under the principles of section 883(c)(4)) by persons who are (directly or indirectly) insured under any policy of insurance or reinsurance issued by the corporation or who are related persons to any such person;
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The related person insurance income (determined on a gross basis) of the corporation for the tax year is less than 20% of its insurance income for the tax year determined without regard to the provisions of section 953(a)(1) that limit insurance income to income from countries other than the country in which the corporation was created or organized; or
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The corporation:
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Elects to treat its related person insurance income for the tax year as income effectively connected with the conduct of a trade or business in the United States;
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Elects to waive all treaty benefits (other than from section 884) for related person insurance income; and
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Meets any requirement the IRS may prescribe to ensure that any tax on such income is paid.
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Worksheet B
Worksheets C
Use Worksheet B (on page 12) to determine a U.S. shareholder's pro rata share of earnings of a CFC invested in U.S. property that is subject to tax. Only earnings of a CFC not distributed or otherwise previously taxed are subject to these rules. Thus, the amount of previously untaxed earnings limits the section 956 inclusion. A CFC's investment in U.S. property in excess of this limit will not be included in the taxable income of the CFC's U.S. shareholders.
Further, U.S. shareholders are only taxed on earnings invested in U.S. property to the extent the investments exceed the CFC's previously taxed earnings. The balances in the previously taxed accounts of prior section 956 inclusions (see section 959(c)(1)(A)) and current or prior subpart F inclusions (see section 959(c)(2)) reduce what would otherwise be the current section 956 inclusion.
Note.
The previously taxed accounts should be adjusted to reflect any reclassification of subpart F inclusions that reduced prior section 956 or 956A inclusions (see section 959(a)(2) and Schedule J).
Distributions are also taken into account before the section 956 inclusion is determined. Distributions generally are treated as coming first from (and thus reducing the balances of) the previously taxed accounts. Thus, the U.S. shareholders must:
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Compute the current subpart F inclusion (potentially increasing that previously taxed account);
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Take into account current distributions (potentially reducing the previously taxed and untaxed accounts); and
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Compute the current section 956 inclusion (potentially increasing or reclassifying the previously taxed accounts).
U.S. property is measured on a quarterly average basis. For purposes of Worksheet B, the amount taken into account with respect to U.S. property is its adjusted basis for earnings and profits purposes, reduced by any liability the property is subject to. See sections 956(c) and (d) for the definition of U.S. property. The amount of U.S. property held (directly or indirectly) by the CFC does not include any item that was acquired by the foreign corporation before it became a CFC, except for the property acquired before the foreign corporation became a CFC that exceeds the applicable earnings (as defined in section 956(b)) accumulated during periods before it became a CFC.
If the foreign corporation ceases to be a CFC during the tax year:
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The determination of the U.S. shareholder's pro rata share will be made based upon the stock owned (within the meaning of section 958(a)) by the U.S. shareholder on the last day during the tax year in which the foreign corporation was a CFC;
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The CFC's U.S. property for the taxable year will be determined only by taking into account quarters ending on or before such last day (and investments in U.S. property as of the close of subsequent quarters should be recorded as zero on line 1); and
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In determining applicable earnings, current earnings and profits will include only earnings and profits that are allocable (on a pro rata basis) to the part of the year during which the foreign corporation was a CFC.
Use Schedule J to report accumulated E&P, in functional currency, computed under sections 964(a) and 986(b).
Use column (a) to report the opening balance, current year additions and subtractions, and the closing balance in the foreign corporation's post-1986 undistributed earnings pool.
Note.
Line 3 (E&P as of the close of the tax year, before actual or deemed distributions during the year) is the denominator of the deemed-paid credit fraction under section 902(c)(1) used for foreign tax credit purposes.
Use column (b) to report the aggregate amount of the foreign corporation's pre-1987 section 964(a) E&P accumulated since 1962 and not previously distributed or deemed distributed. These amounts are figured in U.S. dollars using the rules of Regulations sections 1.964-1(a) through (e), translated into the foreign corporation's functional currency according to Notice 88-70, 1988-2 C.B. 369.
Use column (c) to report the running balance of the foreign corporation's previously taxed earnings and profits (PTI), or section 964(a) E&P accumulated since 1962 that have resulted in deemed inclusions under subpart F. Pre-1987 U.S. dollar PTI should be translated into the foreign corporation's functional currency using the rules of Notice 88-70 and added to post-1986 amounts in the appropriate PTI category.
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Include in column (c)(i) PTI attributable to, or reclassified as, investments in U.S. property (section 959(c)(1)(A) amounts).
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Include in column (c)(ii) PTI attributable to, or reclassified as, earnings invested in excess passive assets (section 959(c)(1)(B) amounts) accumulated in tax years of foreign corporations beginning after September 30, 1993, and before January 1, 1997.
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Include in column (c)(iii) PTI attributable to subpart F income net of any reclassifications (section 959(c)(2) amounts).
Use column (d) to report the opening and closing balance of the foreign corporation's accumulated E&P. This amount is the sum of post-1986 undistributed earnings, pre-1987 section 964(a) E&P not previously taxed, and PTI.
Every U.S. person described in Category 4 must file Schedule M to report the transactions that occurred during the foreign corporation's annual accounting period ending with or within the U.S. person's tax year.
If a U.S. corporation that owns stock in a foreign corporation is a member of a consolidated group, list the common parent
as the U.S. person filing
Schedule M.
Important.
In translating the amounts from functional currency to U.S. dollars, use the average exchange rate for the foreign corporation's tax year. See section 989(b). Report the exchange rate in the entry space provided at the top of Schedule M using the “divide-by convention” specified under Reporting Exchange Rates on Form 5471, earlier.
Note.
The term “platform contribution transaction” is not limited to transactions that occurred on or after January 5, 2009, or transactions that occur pursuant to a cost sharing arrangement that was not in effect before January 5, 2009. See Regulations sections 1.482-7m)(1) and (2)(i).
Note.
The term “cost sharing transaction” is not limited to transactions that occurred on or after January 5, 2009, or transactions that occur pursuant to a cost sharing arrangement that was not in effect before January 5, 2009. See Regulations sections 1.482-7(m)(1) and (2)(i).
Schedule O is used to report the organization or reorganization of a foreign corporation and the acquisition or disposition of its stock.
Every U.S. citizen or resident described in Category 2 must complete Part I. Every U.S. person described in Category 3 must complete Part II.
See Regulations section 1.6046-1(i) for rules on determining when U.S. persons constructively own stock of a foreign corporation and therefore are subject to the section 6046 filing requirements.
If the shareholder's latest tax return was filed electronically, enter “e-filed” in column (b)(3) instead of a service center.
Section C is completed by shareholders who are completing Schedule O because they have acquired sufficient stock in a foreign corporation. If the shareholder acquired the stock in more than one transaction, use a separate line to report each transaction.
Section D must be completed by shareholders who dispose of their interest (in whole or in part) in a foreign corporation.
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Enters his name in column (a).
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Enters “common” in column (b).
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Enters “July 1, 2012” in column (c).
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Enters “gift” in column (d).
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Enters “5,000” in column (e)(1).
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Enters “-0-” in column (f) because the disposition was by gift.
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Enters the name and address of his son, John, in column (g).
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Corporation W
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Corporation F
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Corporation FI
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Corporation FJ
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Corporation FK
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