urgent help needed on 5471

[reddy]

I am a Canadian Citizen and moved to USA on TN visa in March 2020. I have a Canadian corporation(IT consulting). I am not using the incorporation after I moved to USA no money coming/going. It did received 40k in 2020 while we are in Canada from Canada employers. I paid Canada corp taxes in Aug2020 as per Aug/July tax year.

Do I need to report using form 5471 in USA, if yes any taxes associated with it? what are the sections need to fill.
Do I need to report every year until I moved back to Canada.

to avoid this extra load I am thinking to close my incorporation, do I still need to report and pay any taxes to USA If I close immediately. I have money in business account.

lot of tax consultants not understanding this and form 5471.

Any responses and help is greatly appreciated.

[reddy]

Can someone please comment on below question. Thank you.

[oakweather]

I am not an accountant and you should seek professional advice, but I have filed 5471s before myself.

Whether you need to file 5471 will depend on whether you're classified as one of the Category Filers -- see IRS Form 5471 instructions. For example, if in a year you acquire more than 10% of the company share, then you may be (as I recall) classified as a Category 2 filer. The number of forms/schedules you have to fill out vary depending on your category.

5471 is an informational return. You have to file it regardless of whether you need to pay taxes to the U.S. IRS. I filed 5471 for some time without ever paying any taxes (as the foreign company in question was not financially profitable).

[oakweather]

Also, closing the company or disposing of company stocks for the purpose of avoiding filing 5471 will not absolve you of the requirement of filing 5471, according to IRS guidelines.