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owner. In the case of a CFC or CFP that

transactions method of accounting

The U.S. dollar column should reflect

is a tax owner, the annual accounting

(DASTM) under the special rules of

such amounts translated into dollars

period of the FDE is the annual

Regulations section 1.985-3. See

under U.S. GAAP translation rules.

accounting period of the CFC or CFP.

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

Differences between this U.S. dollar

GAAP column and the U.S. dollar income

Line 1h — Principal Business

or loss figured for tax purposes under

Person Filing This Return

Activity

Regulations section 1.985-3(c) should be

In the spaces provided at the top of page

accounted for on Schedule H. See

Enter a brief description of the FDE’s

1 of Form 8858, provide the identifying

Schedule H, Special rules for DASTM, on

principal business activity.

information for the U.S. person filing Form

page 4.

8858 (see definition on page 1).

Line 3b

Line 7. Include on line 7, adjustments for

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

extraordinary items, prior period

If the tax owner is a CFC, enter the

person filing Form 8858 and is a member

adjustments, and the provision for

annual accounting period covered by

of a consolidated group, list the common

income, war profits, and excess profits

Form 5471 (as described in Regulations

parent as the person filing the return and

taxes deducted in accordance with U.S.

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

enter its identifying information in the

GAAP. The terms “extraordinary items”

CFP, enter the annual accounting period

spaces provided at the top of page 1 of

and “prior period adjustments” have the

covered by Form 8865 (as described in

the form.

same meaning given to them by U.S.

Regulations section 1.6038-3(f)).

Name Change

GAAP (see Opinion No. 30 of the

Line 5

Accounting Principles Board and

If the name of the person filing the return,

Statement No. 16 of the Financial

the tax owner, the direct owner, or the

You must attach an organizational chart

Accounting Standards Board).

FDE whose activities are being reported

that includes the following information

changed within the past 3 years, show the

with respect to the chain of ownership

Important: Differences between this

prior name(s) in parentheses after the

between the tax owner and the FDE and

functional currency amount and the

current name.

the chain of ownership between the FDE

amount of taxes that reduce E&P (in the

and all entities in which the FDE has a

case of an FDE of a CFC) or are

Addresses

10% or more direct or indirect interest:

deductible in computing U.S. taxable

Use the following instructions to complete

•

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

The name and percentage of

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

person or a CFP) should be accounted for

ownership of all entities in the chain of

spaces at the top of page 1 of the form for

on line 2 or 3 of Schedule H.

ownership, including partnerships and

the filer’s address.

entities disregarded as separate from

Schedule C-1

U.S. Addresses. Include the suite,

their owners.

•

room, or other unit number after the street

The FDE’s position in the chain of

Complete a separate Schedule C-1 for

address. If the Post Office does not

ownership.

each recipient that has a functional

•

deliver mail to the street address and the

The tax classification of all entities in

currency that is different than the

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

the chain of ownership (see Form 8832

functional currency of the FDE. See

number instead.

instructions for tax classification rules and

section 987(3) for rules relating to branch

Foreign Addresses. Enter the

related definitions).

remittances.

•

information in the following order: city,

The country under whose law each

province or state, and country. Follow the

entity is organized.

Schedule F

country’s practice for entering the postal

For these purposes, the rules of

Use Schedule F to report a summary

code, if any. Do not abbreviate the

section 958(a) (relating to “direct and

balance sheet for the FDE computed and

country name.

indirect ownership”) apply.

translated into U.S. dollars in accordance

Identifying Numbers

with U.S. GAAP.

Each filer of Form 8858 that is required

Use the following instruction to complete

to file an organizational chart with respect

Special rule for DASTM. If the FDE

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

to more than one FDE may satisfy this

uses DASTM, Schedule F should be

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

requirement by filing a single

prepared and translated into U.S. dollars

identifying number. The identifying

organizational chart that includes the

according to Regulations section

number of an individual is his or her social

required information with respect to all

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

security number (SSN). The identifying

FDEs.

number of all others is their employer

Schedule G

Schedule C

identification number (EIN).

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

Question 3

Use Schedule C to report a summary

person filing Form 8858 and is a member

income statement for the FDE computed

If the tax owner of the FDE is claiming a

of a consolidated group, see Person

in the FDE’s functional currency in

section 165 loss with respect to worthless

Filing This Return above.

accordance with U.S. generally accepted

stock or with respect to certain

accounting principles (GAAP). Enter in

Functional Currency

obligations, see Regulations section

the U.S. dollar column each line item

1.6011-4 for information relating to a

Use the following instruction to complete

functional currency amount translated into

disclosure statement that must be

lines 1i, 3e, and 4d.

dollars using U.S. GAAP translation rules.

attached to Form 8858 if certain

Enter the entity’s functional currency.

If the FDE does not maintain U.S. GAAP

requirements are met.

income statements in U.S. dollars, you

See sections 985 and 989, and

Question 4

can use the average exchange rate as

Regulations sections 1.985-1(a) through

determined under section 989(b). The

If the FDE is not owned directly or

rate used should be the rate stated on

determining the functional currency of a

indirectly by a domestic corporation or the

line 7, Schedule H. If you choose to use

qualified business unit (QBU) and the

FDE did not incur an NOL for the year,

the average exchange rate rather than

definition of a QBU.

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

the U.S. GAAP translation rules, check

Hyperinflationary exception. An entity

entry spaces for line 4 to indicate that the

the box above line 1 on Schedule C.

that otherwise would be required to use a

question is not applicable. Otherwise, if

hyperinflationary currency as its functional

Special rules for DASTM. If the FDE

you are checking the “Yes” box, you may

currency must use the U.S. dollar as its

uses DASTM, the functional currency

need to attach an elective relief

functional currency and compute income

column should reflect local

agreement and/or an annual certification

or loss or earnings and profits using the

hyperinflationary currency amounts

as provided in Regulations section

U.S. dollar approximate separate

computed in accordance with U.S. GAAP.

1.1503-2(g)(2).

-3-

Instructions For Form 8858 - Information Return Of U.s. Persons With Respect To Foreign Disregarded Entities - 2004 Page 3

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