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Offshore Assets et. al.

I am a minority owner (~5% ownership) in a small overseas corporation. I am considering increasing my ownership and becoming more actively involved in the management of the company, but have some hesitation in part due to the burden and requirements of filling in form 5471 and related IRS information. The question is whether these are in fact quite so burdensome, and if the move could actually increase the likelihood of getting audited.

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Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Anon,

There are two parts to this:
-Can the foreign corp provide you with the info you need to file the 5471. Generally, that's not a big deal, but some smaller companies may have an issue with it.
-Does this trigger subpart F income, and if so, is that manageable?

These related questions should be taken to a tax attorney (international) who can guide you through the complexities, as it is not as simple as a "10% ownership trigger".

KP

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