Looking for a Form 926 Templates? Download it for free!

Instructions for Form 926

Department of the Treasury

Internal Revenue Service

(Rev. August 2013)

Return by a U.S. Transferor of Property to a Foreign Corporation

Section references are to the Internal Revenue

exceeds $100,000. See Regulations

The transferor (or one or more

Code unless otherwise noted.

section 1.6038B-1(b)(3).

successors) properly entered into a gain

DRAFT AS OF

recognition agreement, or

What's New

Exceptions to Filing

The U.S. transferor is a tax-exempt

entity and the income was not unrelated

1. For exchanges described in section

business income, or

354 or 356, a U.S. person does not have

Part II, line 4a is new. This new line

The transfer was taxable to the U.S.

to file Form 926 if:

requests the reference ID number of the

transferor and such person properly

May 21, 2013

a. The U.S. person exchanges stock

Transferee Foreign Corporation. See

reported the income from the transfer on

of a foreign corporation in a

page 2 for more information.

its timely filed return, or

recapitalization described in section

The transfer is considered to be to a

General Instructions

368(a)(1)(E) or

foreign corporation solely by reason of

b. The U.S. person exchanges stock

Regulations section 1.83-6(d)(1) and the

of a domestic or foreign corporation for

fair market value of the property

Future Developments

stock of a foreign corporation under an

transferred did not exceed $100,000.

asset reorganization described in section

For the latest information about

When and How To File

368(a)(1) that is not treated as an indirect

developments related to Form 926 and its

stock transfer under Regulations section

instructions, such as legislation enacted

Form 926 (and the additional information

1.367(a)-3(d).

after they were published, go to

required under Regulations section

926.

2. Generally, a domestic corporation

1.6038B-1(c) and Temporary Regulations

that distributes stock or securities of a

sections 1.6038B-1T(c)(1) through (5) and

Purpose of Form

domestic corporation under section 355 is

1.6038B-1T(d)) must be filed with the U.S.

not required to file Form 926. However,

Use Form 926 to report certain transfers of

transferor's income tax return (or, if

this exception does not apply if the

tangible or intangible property to a foreign

applicable, exempt organization return) for

distribution is of stock or securities of a

corporation required by section 6038B.

the tax year that includes the date of the

foreign controlled corporation to a

transfer.

Who Must File

distributee shareholder who is not a U.S.

Other Forms That May Be

citizen or resident or a domestic

Generally, a U.S. citizen or resident, a

Required

corporation.

domestic corporation, or a domestic

3. A U.S. person that transfers stock

Persons filing this form may be required to

estate or trust must complete and file

or securities under section 367(a) does

file Form TD F 90-22.1, Report of Foreign

Form 926 to report certain transfers of

not have to file Form 926 if either a or b

Bank and Financial Accounts.

property to a foreign corporation that are

below applies.

described in section 6038B(a)(1)(A),

A U.S. transferor that is required to

367(d), or 367(e). See section 6038B, and

a. The U.S. transferor owned less

enter into a gain recognition agreement

Regulations sections 1.6038B-1 and

than 5% of both the total voting power and

under section 367 to qualify for

1.6038B-1T for more information.

the total value of the transferee foreign

nonrecognition treatment must file Form

corporation immediately after the transfer

8838, Consent To Extend the Time To

Special Rules

and:

Assess Tax Under Section 367—Gain

The U.S. transferor qualified for

Transfers by a partnership. If the

Recognition Agreement, or a similar

nonrecognition treatment with respect to

transferor is a partnership (domestic or

statement, to extend the statute of

the transfer, or

foreign), the domestic partners of the

limitations with respect to the gain realized

The U.S. transferor is a tax-exempt

partnership, not the partnership itself, are

but not recognized on the transfer.

entity and the income was not unrelated

required to comply with section 6038B and

Penalties for Failure to File

business income, or

file Form 926. Each domestic partner is

The transfer was taxable to the U.S.

If a taxpayer fails to comply with section

treated as a transferor of its proportionate

transferor under Regulations section

6038B, the penalty equals 10% of the fair

share of the property. See the instructions

1.367(a)-3(c) and such person properly

market value of the property at the time of

for line 2 for additional information.

reported the income from the transferor on

the transfer. The penalty will not apply if

Transfers by a husband and wife. A

its timely filed return (including extensions)

the failure to comply is due to reasonable

husband and wife may file Form 926

for the tax year that includes the date of

cause and not to willful neglect. The

jointly, but only if they file a joint income

transfer; or

penalty is limited to $100,000 unless the

tax return.

The transfer is considered to be to a

failure to comply was due to intentional

Transfers of cash. A U.S. person that

foreign corporation solely by reason of

disregard. Moreover, the period of

transfers cash to a foreign corporation

Regulations section 1.83-6(d)(1) and the

limitations for assessment of tax upon the

must report the transfer on Form 926 if (a)

fair market value of the property

transfer of that property is extended to the

immediately after the transfer the person

transferred did not exceed $100,000.

date that is 3 years after the date on which

holds directly or indirectly at least 10% of

the information required to be reported is

the total voting power or the total value of

b. The U.S. transferor owned 5% or

provided.

the foreign corporation or (b) the amount

more of the total voting power or the total

of cash transferred by the person to the

value of the transferee foreign corporation

foreign corporation during the 12-month

immediately after the transfer and:

period ending on the date of the transfer

May 20, 2013

Cat. No. 27037X

Instructions Draft For Form 926 - Return By A U.s. Transferor Of Property To A Foreign Corporation Page 2

Related Articles

Related forms

Related Categories