Schedules Q & R, Form 5471: Reporting CFC Income by CFC Income Groups and Distributions From a Foreign Corporation

Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations, is one of the most comprehensive and complex forms required of foreign tax professionals. Schedules Q and R have been added to its numerous schedules to accommodate recent legislative changes. Schedule Q was added to facilitate the computation of the foreign tax credit considering the high-tax exception, high-tax kickout, Section 962 elections, and Section 960 deemed taxes paid.

Schedule R was added to report distributions from foreign corporations required under Sections 245A, 959, and 986(c). Columns (a) through (d) report the nature and amount of these distributions. All distributions made during a tax year should be reported on this schedule.

Specific line items on Schedules Q and R should agree with amounts reported elsewhere on Form 5471; tax software often cannot ensure these schedules are appropriately completed. International tax practitioners need to grasp the nuances of these new schedules and ensure they are correctly prepared.

Listen as our panel of international tax reporting experts provides advice and the background necessary to prepare Form 5471 Schedules Q and R correctly.

I. Form 5471 and Controlled Foreign Corporations

II. Schedule Q, CFC Income by CFC Income Groups

A. Background

B. Line-by-line review

III. Schedule R, Distributions From a Foreign Corporation

A. Background

B. Line-by-line review

IV. Best practices

The panel will review these and other critical issues:

• Which category of filers are required to complete Schedules Q and R?
• Categorizing tested income on Schedule Q
• Reporting property transfers and the related liability on Schedule R
• Applicable tax guidance requiring the addition of schedules Q and R
• Interplay and agreement with other Form 5471 Schedules

Learning Objectives

After completing this course, you will be able to:

• Identify Section 245A dividends received from CFCs
• Determine how to report distributions in the functional currency as required by Schedule R
• Decide which amounts on Schedule Q should equal amounts reported elsewhere on Form 5471
• Ascertain which category of filers are required to complete Schedule Q

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

  
  

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).