Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

Does a U.S. 1120 with a sole shareholder be required to file…

Does a U.S. 1120...

Does a U.S. 1120 with a sole shareholder be required to file a F-5472 if the shareholder is filing under tie-breaker rules . The shareholder is filing F-5471 with regard to CFCs and F-114 as he is considered a U.S. resident under the U.S. Tax code.

Accountant's Assistant: Because laws vary from place to place, can you tell me what state this is in?

Texas

Accountant's Assistant: Has anything been filed or reported?

Not yet.

Show More
Show Less
Ask Your Own Tax Question
Customer reply replied 6 months ago
The sole shareholder is considered a U.S. resident by the code and the Tax Treaty allows for him to be taxed as a nonresident when meeting the profile required under tie-breaker rules ( which he does meet). He is filing F-5471 and F-bars per the code even thought the tax calculations are as nonresident alien (a benefit given under the Tax Treaty tie-breaker rules) The question then is does that status extend to F-5472? Plus what is the responsibility of the U.S. 1120, who is required to file a F-5472 per foreign shareholder (nonresident). Is the shareholder a U.S. resident or is he a nonresident?
Customer reply replied 6 months ago
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call.
Customer reply replied 6 months ago
Let me know if you need more information, or send me the service offer(s) so we can proceed.
Answered in 6 hours by:
11/7/2017
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,073
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
Verified

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Please give me a few minutes to answer your question.

Ask Your Own Tax Question

I've been practicing in the international tax area for over 30 years, and I have been asked this question quite a bit.

If you are considered a US resident for tax purposes (whether you have a green card or just substantial presence) you are not considered a foreign shareholder for Form 5472 filing purposes. Conversely, if you are treated as a nonresident (as in your treaty position) then you are considered a foreign shareholder for Form 5472 filing purposes.

So if you are the shareholder of the corporation, and you are choosing to be treated as a nonresident alien under a treaty based return position (make sure you file the Form 8833) you do have a Form 5472 filing requirement as you are treated as a US nonresident alien. So you do have to file the Form 5472.

I hope this answers your question. If you have any more, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,073
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
Verified
taxmanrog and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 6 months ago
Hi,
Wonder if you would provide your reference or cite for your conclusion?

Internal Revenue Code §6038A(a)(2) requires the Form 5472 to be filed when the US company is 25% owned by a foreign person. §6038A(c)(2) defines the foreign shareholder as a foreign person. Since you are taking a treaty position, you are a foreign shareholder for US tax purposes. Therefore the Form 5472 is required.

Ask Your Own Tax Question
Customer reply replied 6 months ago
Hi,
Thanks however wonder if you could answer why 6038A(c)(2) over rides code section §7701(b)(1)(A)(ii) which defines a U.S. resident as a person with meeting the presence test of 183 days and required to file 5471s, F-BARs. The vital interest outside the U.S. test has been met as has all other test required for a treaty position.
Customer reply replied 6 months ago
Is there a Rev ruling, PLR or other such reference?
Customer reply replied 6 months ago
Hi,
Sorry if you responded after 8:15am CST -- I do not see your response. Thanks

I just now got back here.

While §7701 does define US resident, when you take a treaty position to state that the person is NOT a resident, you cannot then take a contrary position for another section of the IRC. Either you are a resident, or you are a nonresident. If you meet the resident requirements, but then use a treaty as a "tiebreaker" to say you are a nonresident, you are bound by the nonresident tiebreaker position for your entire return. You cannot take a position that you are a nonresident for the taxability of income, for example, and then in the same return say that you are a resident for Form 5472 reporting. You can't have your cake and eat it too. It is either one or the other.

Ask Your Own Tax Question

The only time that you can be both a resident and a nonresident in the same year is if you are a dual-status taxpayer in the year you arrive in the US or the year that you depart.

Ask Your Own Tax Question
Was this answer helpful?
Ask taxmanrog Your Own Question
taxmanrog
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,073
1,073 Satisfied Customers
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.

taxmanrog is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I have foreign earned income that is being reported on one 7
Hello...I have foreign earned income that is being reported on one 7 within my tax return. I have been told by a mortgage lender that this income should be reported on line 21 and supported by Form 25… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,027 satisfied customers
Does a non-resident alien have to report interest income
Does a non-resident alien have to report interest income received from the IRS on a tax refund?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Capital gains tax on nonresident alien. A foreign trust owns
Capital gains tax on nonresident alien. A foreign trust owns 100% of shares of a US C corporation. C corporation is privately held (not publicly traded) and conducts business in the US. Then C corpora… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Can interest & charity donations be used on 2018 tax return?
Can interest & charity donations be used on 2018 tax return? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Wanted to know about foreign tax. I filed tax return in
I filed tax return in India do I need to show India income in fbar form only or do I need to pay tax of foreign income … read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
Filing a NR Canadian income on a US Federal 1040. Which form
Filing a NR Canadian income on a US Federal 1040. Which form is used to report this foreign income? only Box 16 reports income with numeral code 46 in box 14 and in box 15 is CAD. … read more
Mike-USACPA
Mike-USACPA
9 satisfied customers
My return indicates an error at State Taxes & Interest
My return indicates an error at State Taxes & Interest worksheet, indicating I have to fill in " 1.b.2" I can not do that because I haven't lived in any state other than FL during 2017. I don't know h… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
NR alien who was not in the US at all make 4k profit in a US
NR alien who was not in the US at all make 4k profit in a US partnership. It was self employed income, is she required to file a US tax return?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,232 satisfied customers
How to report foreign income on which Tax has been withheld
How to report foreign income on which Tax has been withheld in foreign country and tax return in the country is filed as per their rules. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Does a nonresident alien student on a F-1 visa who was
Does a nonresident alien student on a F-1 visa who was issued a 1042-s with federal withholdings have to file a state tax return? They were attending school in NYC.… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a question about 1099 form. I'm a nonresident alien
Hi Pearl, I have a question about 1099 form. I'm a nonresident alien and own a house and rent it to someone else. During this process I did not hire any agent or independent contractor, but I do have … read more
Marcia Mitrano
Marcia Mitrano
MBA
62 satisfied customers
Does a resident alien who is student in the United States
Does a resident alien who is student in the United States have to pay United States tax on foreign source scholarships?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
What is the tax benefit rule? What is the Tax Benefit Rule?
What is the tax benefit rule? JA: The Accountant will know how to help. Please tell me more, so we can help you best. Customer: What is the Tax Benefit Rule? JA: Is there anything else important you t… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Are social security benefits taxable to Alien non resident
This question is for BarbaraAre social security benefits taxable to Alien non resident taxpayers? They have abandoned their green card a few years ago and now live overseas. Preparing rental income ta… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Taxes Where doe do you report foreign source income from a
TaxesWhere doe do you report foreign source income from a 1099-div There are amounts in boxes 1a-6 that I already entered in Schedule B and the dividend income statement. I entered the Foreign tax pai… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
On Form 1065, which places do you report interest income.
For Partnership on Form 1065, which places do you report interest income. Such interest earned on a bank account balance by the Partnership.It seems like it needs be put on "Line 7. Other Income (Loss… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
Where do report for Partnership (LLC) returns using Form
Where do report for Partnership (LLC) returns using Form 1065 income recipient from taxable federal grant? Specifically, 1099-G, Box 6.… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,027 satisfied customers
I know nonresident aliens cannot claim education credits,
I know nonresident aliens cannot claim education credits, however can I deduct MBA expenses as unreimbursed employee expense?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x