Instructions For Form 8858 (2010) - Internal Revenue Service (Page 3 of 4) in pdf

annual accounting period of the FDE is

currency must use the U.S. dollar as its

column should reflect local

the annual accounting period of the CFC

functional currency and compute income

hyperinflationary currency amounts

or CFP.

or loss or earnings and profits using the

computed in accordance with U.S. GAAP.

U.S. dollar approximate separate

The U.S. dollar column should reflect

transactions method of accounting

such amounts translated into dollars

Person Filing This Return

(DASTM) under the special rules of

under U.S. GAAP translation rules.

In the spaces provided at the top of page

Regulations section 1.985-3. See

Differences between this U.S. dollar

1 of Form 8858, provide the identifying

Regulations section 1.985-1(b)(2).

GAAP column and the U.S. dollar income

information for the U.S. person filing Form

or loss figured for tax purposes under

Line 1h — Principal Business

8858 (see definition on page 1).

Regulations section 1.985-3(c) should be

Activity

If a U.S. corporation is the U.S.

accounted for on Schedule H. See

person filing Form 8858 and is a member

Enter a brief description of the FDE’s

Special rules for DASTM, under Schedule

of a consolidated group, list the common

principal business activity.

H, below.

parent as the person filing the return and

Line 7. Include on line 7, adjustments for

enter its identifying information in the

Line 3b

extraordinary items, prior period

spaces provided at the top of page 1 of

adjustments, and the provision for

If the tax owner is a CFC, enter the

the form.

income, war profits, and excess profits

annual accounting period covered by

taxes deducted in accordance with U.S.

Name Change

Form 5471 (as described in Regulations

GAAP. The terms “extraordinary items”

section 1.6038-2(e)). If the tax owner is a

If the name of the person filing the return,

and “prior period adjustments” have the

CFP, enter the annual accounting period

the tax owner, the direct owner, or the

same meaning given to them by U.S.

covered by Form 8865 (as described in

FDE whose activities are being reported

GAAP (see Opinion No. 30 of the

Regulations section 1.6038-3(f)).

changed within the past 3 years, show the

Accounting Principles Board and

prior name(s) in parentheses after the

Line 5

Statement No. 16 of the Financial

current name.

Accounting Standards Board).

You must attach an organizational chart

Addresses

that includes the following information

Important: Differences between this

with respect to the chain of ownership

Use the following instructions to complete

functional currency amount and the

between the tax owner and the FDE and

lines 1a, 2a, 2b, 3a, 4a, and the entry

amount of taxes that reduce E&P (in the

the chain of ownership between the FDE

spaces at the top of page 1 of the form for

case of an FDE of a CFC) or are

and all entities in which the FDE has a

the filer’s address.

deductible in computing U.S. taxable

10% or more direct or indirect interest:

income (in the case of an FDE of a U.S.

U.S. Addresses. Include the suite,

•

person or a CFP) should be accounted for

The name and percentage of

room, or other unit number after the street

on line 2 or 3 of Schedule H.

ownership of all entities in the chain of

address. If the Post Office does not

ownership, including partnerships and

deliver mail to the street address and the

Schedule C-1

entities disregarded as separate from

U.S. person has a P.O. box, show the box

their owners.

number instead.

Complete a separate Schedule C-1 for

•

The FDE’s position in the chain of

each recipient that has a functional

Foreign Addresses. Enter the

ownership.

information in the following order: city,

currency that is different than the

•

The tax classification of all entities in

province or state, and country. Follow the

functional currency of the FDE. See

the chain of ownership (see Form 8832

section 987(3) for rules relating to branch

country’s practice for entering the postal

instructions for tax classification rules and

code, if any. Do not abbreviate the

remittances.

related definitions).

country name. However, if you are filing

•

The country under whose law each

Schedule F

Form 8858 electronically, enter a valid

entity is organized.

country code posted on the IRS website

Use Schedule F to report a summary

For these purposes, the rules of

balance sheet for the FDE computed and

section 958(a) (relating to “direct and

0,,id=175595,00.html instead of the

translated into U.S. dollars in accordance

indirect ownership”) apply.

country name.

with U.S. GAAP.

Each filer of Form 8858 that is required

Identifying Numbers

Special rule for DASTM. If the FDE

to file an organizational chart with respect

uses DASTM, Schedule F should be

Use the following instruction to complete

to more than one FDE may satisfy this

prepared and translated into U.S. dollars

lines 1b, 3c, 4c, and the entry space at

requirement by filing a single

according to Regulations section

the top of page 1 of the form for the filer’s

organizational chart that includes the

1.985-3(d), rather than U.S. GAAP.

identifying number. The identifying

required information with respect to all

number of an individual is his or her social

FDEs.

Schedule G

security number (SSN). The identifying

number of all others is their employer

Schedule C

Question 3

identification number (EIN).

Use Schedule C to report a summary

If the tax owner of the FDE is claiming a

If a U.S. corporation is the U.S.

income statement for the FDE computed

section 165 loss with respect to worthless

person filing Form 8858 and is a member

in the FDE’s functional currency in

stock or with respect to certain

of a consolidated group, see Person

accordance with U.S. generally accepted

obligations, see Regulations section

Filing This Return above.

accounting principles (GAAP). Enter in

1.6011-4 for information relating to a

the U.S. dollar column each line item

Functional Currency

disclosure statement that must be

functional currency amount translated into

attached to Form 8858 if certain

Use the following instruction to complete

dollars using U.S. GAAP translation rules.

lines 1i, 3e, and 4d.

requirements are met.

If the FDE does not maintain U.S. GAAP

Enter the entity’s functional currency.

Question 4

income statements in U.S. dollars, you

See sections 985 and 989, and

can use the average exchange rate as

If the FDE is not owned directly or

Regulations sections 1.985-1(a) through

determined under section 989(b). The

indirectly by a domestic corporation or the

rate used should be the rate stated on

FDE did not incur an NOL for the year,

determining the functional currency of a

line 7, Schedule H. If you choose to use

please write “N/A” across the “Yes/No”

qualified business unit (QBU) and the

the average exchange rate rather than

entry spaces for line 4 to indicate that the

definition of a QBU.

the U.S. GAAP translation rules, check

question is not applicable. Otherwise, if

the box above line 1 on Schedule C.

Hyperinflationary exception. An entity

you are checking the “Yes” box, you may

that otherwise would be required to use a

Special rules for DASTM. If the FDE

need to attach an elective relief

hyperinflationary currency as its functional

uses DASTM, the functional currency

agreement and/or an annual certification

-3-

Instructions For Form 8858 (2010) - Internal Revenue Service Page 3

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