Form 5471 - Draft instructions include requirements concerning certain CFC income subject to net investment income tax 

December 6: The IRS in on December 5 posted a draft version of the instructions to Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations. The draft version of the Form 5471 instructions (which is to be used with the December 2012 revisions of Form 5471, and Schedules J, M, and O) includes new requirements concerning net investment income tax.

Form 5471 [PDF 166 KB] is filed by U.S. persons who are officers, directors, or shareholders in certain foreign corporations. Those U.S. persons required to file From 5471 are listed as “Category 1” through “Category 5” filers.

The new draft instructions [PDF 346 KB]—with a revision date of December 2013—provide that, beginning in 2013, certain U.S. shareholders filing Form 5471 may be subject to the net investment income tax on their income from controlled foreign corporations (CFCs).

The draft instructions refer these taxpayers to the Instructions for Form 8960, Net Investment Income Tax, and Regulations section 1.1411-10.

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