Form 5471 Schedule J, Accumulated Earnings of Controlled Foreign Corporations: Line-by-Line

The complexity and compliance burden of virtually all foreign tax information reporting continues to escalate. Multiple provisions in the law increased the calculation, payment, and reporting obligations on U.S. taxpayers with foreign income or assets and foreign taxpayers with activities subject to U.S. tax jurisdiction. These forms continue to be updated and modified annually.

Form 5471 continues to be one of the most complicated reporting obligations in the U.S. offshore information tax reporting regime, notably Schedule J, Accumulated Earnings and Profits (E&P) of Controlled Foreign Corporations. However, the deemed repatriation provisions necessitated a modification of Schedule J, involving a longer and significantly more complicated set of calculations.

Schedule J contains additional categories of accumulated E&P with requirements to calculate and disclose reclassifications within various sub-sections of IRC 959. The Schedule also contains an additional part and several new columns requiring taxpayers to report current and recaptured Subpart F income. These calculations create additional burdens to an already complex form.

Listen as our panel of veteran advisers provides an in-depth, line-by-line, and column-by-column guide to the changes tax reform made to completing Schedule J.

1. Form 5471 Schedule J: introduction
2. Categories of filers
3. Part I - Accumulated E&P of CFCs
4. Part II - Nonpreviously taxed E&P subject to recapture as Subpart F income

The panel will discuss these and other specific changes to Schedule J:

• Lines and columns required to report accumulated E&P balances concerning categories of previously taxed E&P necessitated by income inclusions under Section 965(a) and GILTI
• How this schedule incorporates Subpart F inclusions and recaptures
• How to handle deficit calculations after nonrecognition transactions
• Reclassification lines
• Changes made to Schedule J for the current year

Learning Objectives

After completing this course, you will be able to:

• List the specific additional categories, calculations, and classifications of Form 5471 Schedule J
• Recognize the rules for reclassifications under Sections 959(c)(1) and 959(c)(2)
• Determine calculations of E&P "hovering deficit" after nonrecognition transaction carryover (Lines 5a, 5b, and 13)
• Discern how to calculate the Subpart F income inclusions and Subpart F Recapture

• 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 at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations); familiarity with the 5471 IRS penalty structure and key U.S. international tax reporting rules and obligations of U.S. presons with interests in foreign corporations. This is an advanced-level webinar for attendees well-versed in prior revisions of Form 5471.

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).