Proc. In other words, is line 58 of Worksheet A greater than zero? Therefore, the reporting on Schedule J is necessary regardless of whether the U.S. shareholder made a section 962 election. A Category 1 filer does not have to file Form 5471 if all of the following conditions are met: The Category 1 filer does not own a direct interest in the foreign corporation; The Category 1 filer is required to furnish the information requested solely because of constructive ownership (as determined under Regulations section 1.958-2, 1.6038-2(c), or 1.6046-1(i)) from another U.S. person; and. Excess of foreign currency gains over foreign currency losses (section 954(c)(1)(D))" field, "1e.Income equivalent to interest (section 954(c)(1)(E))" field, "1f.Net income from a notional principal contract (section 954(c)(1)(F))" field, "1g.Payments in lieu of dividends (section 954(c)(1)(G))" field, "1h.Certain amounts received for services under personal service contracts (see section 954(c)(1)(H)", "1i.Certain amounts from sales of partnership interests to which the look-through rule of section 954(c)(4) applies", "2.Gross foreign personal holding company income. U.S. property is measured on a quarterly average basis. Category 1a, 1c, 3, 4, 5a, and 5c filers must complete Part II. If one of the following exceptions applies, use the exchange rate in effect on the date the foreign corporation paid the tax. If there is a difference between last years ending balance on Schedule J and the amount that should be last years ending balance, taking into account modifications in Schedule J, include the difference on line 1b and attach an explanation for the difference. If applicable, use the reference ID number shown on Form 5471, page 1, Item 1b(2). Enter the name of each lower-tier foreign corporation that made a PTEP distribution with respect to which a deemed-paid tax is determined in the current year by the foreign corporation with respect to which this Schedule E (Form 5471) is being completed. Instead, report them on line 1i. If there is an income tax expense amount on line 21a or 21b, subtract that amount from the line 19 net income or (loss) amount in arriving at line 22 current year net income or (loss) per the books. If a U.S. individual shareholder has a Subpart F inclusion from their investment in a CFC, they need to report the inclusion on their tax return and include . CFC1, in turn, wholly owns the only class of stock of CFC2, a foreign corporation. For purposes of Any liability to which the property is subject immediately before, and immediately after, the distribution. These amounts are figured in U.S. dollars using the rules of Regulations section 1.964-1(a) through (d), and translated into the foreign corporation's functional currency according to Notice 88-70, 1988-2 C.B. See Regulations sections 1.901(m)-1 through 1.901(m)-8 for additional information. Enter the applicable three-character alphabet code for the foreign corporation's functional currency using the ISO 4217 standard.