Tag Archives: form 5471 preparation

New GOP Tax Savings in Preparing Form 5471 for the Controlled Foreign Corporation

The new  GOP tax bill has created new hidden tax savings.  While preparing Form 5471 for the Controlled Foreign Corporation, you want to make important elections.

Starting in 2018, Form 5471 is full of international tax planning and tax savings.  As you prepare Form 5471, carefully look at the instructions.  They hint at the hidden tax savings. (If this is the first year or a late filing, then please see this link.)

 It is here, in the fine but dull print, that you will find your tax savings.  Preparing Form 5471 for the Controlled Foreign Corporation is an art form.  

For example, did you know that an offshore corporation acting as a captive finance company can avoid U.S. taxes?  

Or that a foreign contract manufacturer related party sales are tax-free?

Or the special foreign investment fund (such as a foriegn ETF) and controlled foriegn corporation tax plan on this link.

Video on Preparing Form 5471 for the Controlled Foreign Corporation

The  video below is from an international tax class that I gave to the California Society of CPAs on preparing Form 5471 for the Controlled Foreign Corporation

If you want to start to save taxes while preparing your Form 5471, then contact me, Brian Dooley, CPA, MBT at [email protected]

International Tax Accountants Are Watching for the New Form 1120F and Form 5471

A great debate over the United States corporate tax reform is underway.   Foreign tax accountants are waiting to see how this will change the Form 1120F (reporting for an international company with U.S. income)  and the Form 5471 (reporting for a controlled foreign corporation).

The Form 1120F includes the Branch Profits Tax.  A tax on U.S. equity and foreign interest expense.

Form 1120F’s Branch Profits Tax is a surprise attack tax.   Small international businesses rarely spend the time needed to avoid this tax.  Quarterly proforma tax returns are required to manage this tax.   Corporate minutes are needed to justify the retention of liquid assets on the U.S. branch.

The word “branch” is misleading.  A foreign corporation does not need a branch (such as an office or a factory) for this tax to apply.  The tax is on U.S. equity that is not necessary for an active U.S. business.

The second part of the branch profits tax is in the method of the corporation’s debt financing.

Foreign tax accountants are expecting the new Form 1120F to include an easy to use worksheet for computation of the interest expense portion of the branch profits tax.

International and Global Tax Strategies as the U.S. reduces the business tax rate.

The best international and global tax structure includes an IRS approved Nevada Self-directed trust.

Optimizing your tax savings requires thinking outside the box. Using a foreign trust for tax planning and asset protection will keep you and your family safe.

Optimizing your tax savings requires thinking outside the box. Using a foreign trust for tax planning and asset protection will keep you and your family safe.

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