Form 5471 Schedule R – Distributions from a Foreign Corporation
The system transfers dividend payment information to 5471 Schedule R. Each transaction listed in the
Intercompany Payments > Dividend
screen of the foreign corporation is traced back to the E&P Pools Report to determine the earnings depleted. Separate Schedule R lines are created for the portion out of 959(c)(3) and the 959(c)(1)/959(c)(2) PTEP categories. The system generates a default description for each distribution as follows:Recipient | E&P Depleted | Description |
|---|---|---|
FTC Entity (Related/Unrelated) 10% or more owner or CFC Overrides set to Treat as a U.S. Shareholder | 959(c)(3) | Cash, taxable, 959(c)(3), some 245A eligible |
FTC Entity (Related/Unrelated) Less than 10% owner or CFC Overrides set to not Treat as a U.S. Shareholder | 959(c)(3) | Cash, taxable, 959(c)(3), not 245A eligible |
Foreign Entity (Related/Unrelated) | 959(c)(3) | Cash, nontaxable, 959(c)(3) |
All Entities | PTEP 959(c)(1)/ 959(c)(2) | Cash, nontaxable, 959(c)(1)/(2) |
All Entities | Complete Return of Capital (ROC) or PTEP+ROC distribution | Cash, no E&P distributed |
If a distribution is a partial return of capital (ROC), the amount of the dividend payment (less any PTEP depletion) will be reported in Column C (Amount of distribution in foreign corporation’s functional currency) while the amount depleted from earnings and profits will be reported in Column D (Amount of E&P distribution in foreign corporation’s functional currency). If no E&P is distributed, as in the case of a complete return of capital, the amount reported in Column D will be none.
You must enter any non-cash distributions (if applicable) in Organizer and select the
Schedule R
INTL Transfer Option
to prevent further transfer to the schedule.note
IMPORTANT! Before transferring new results, the International Compute deletes all existing information in the schedule. If you manually enter overrides in Organizer, you must select the
Schedule R
option on the INTL Transfer Options
page in Organizer on the 5471 navigation tree to prevent additional transfers to the schedule from International Computes. Failure to check the option, results in the loss of any Organizer overrides (even if the Organizer field is locked) when International Compute > Transfer to US5471, US8865, US8858
runs for the binder.
