INFORMATION ABOUT YOU (LLC OWNER/SHAREHOLDER) INFORMATION ABOUT THE LLC
First Name (If US LLC is owned by a company add Company Name here, ignore next two lines): Name of LLC :
Middle Name: Physical and Mailing Address :
Last Name: EIN:
Country of Residence: Which State was LLC Formed ?:
Country of Citizenship: LLC Formation Date
Type of Business Activity/Business Description Below
Permanent Residence/Home Country Address:
Phone:
ITIN/SSN:
Foreign Tax ID - IF ANY:
IMPORTANT: If You own another company whether Foreign or Domestic, and that Company Conducted Businesss with This U.S LLC - See Next Tab
ENTER AMOUNTS THE FOREIGN SHAREHOLDER RECEIVED FROM THE LLC Amount Received From The U.S LLC in 2021
1. LLC funds Distributed to Owner
2. Expenses the LLC paid on behalf of the Owner
3. Amount Distributed to Owner after LLC Disolved/Closed
4. Any other items the LLC paid on behalf of the owner ? (add a description below)
5. Amount owner Collected from LLC sales or income directly into the owners personal bank account
ENTER AMOUNTS THE FOREIGN SHAREHOLDER PAID TO OR ON BEHALF OF THE LLC Amount Paid To "OR" on Behalf U.S LLC in 2021
1. Did you pay for Expenses with your personal bank account , credit/debit card on Behalf of the LLC? If yes, Enter the cost Below
(a)Domain and Website Expense
(b)Inventory Purchases
(c)Subscriptions
(d)Advertisement
(e)Legal and Professional Expenses
(f)Accounting and Bookkeeping
(g)Virtual Mail Box and Phone Services
(h)Contractor/Employee Payments
(i)Space Rental
(j)Shopify Subscriptions
(k)Other
2. LLC Formation , Virtual Address and Registered Agents Fees
3. Personal funds contributed to Dissolve/Close the LLC
4. Personal funds contributed to Fund the LLC bank Account
5. Any Other Items the Owner Paid on behalf of the LLC?
PLEASE ANSWER THE FOLLOWING QUESTIONS BELOW TRUE/FALSE
1. You own a single member LLC
2. You do not have any physical presence in the US
3. You do not have any employees or sales agents in the US
4. You do not have warehouses or offices on the US
5. You did not receive a 1099-K or any tax form from payment processor or e-commerce marketplace (for example a tax form from Stripe, Square, Amazon, Ebay etc)
6. You do not have any Rental property in the U.S ?
INFORMATION ABOUT A RELATED COMPANY YOU OWN (FOREIGN OR DOMESTIC
Name of the Related Company:
Country of Related Company Residence:
Country of Related Company Citizenship:
Address Of the Related Company:
Email:
EIN:
FOREIGN TAX ID:
Type of Business Activity/Business Description Below
ENTER AMOUNTS THE RELATED COMPANY RECEIVED FROM THE LLC
Sales of Stock in Trade (Inventory)
Sales of Tangible Property (Not Inventory)
Rental Income
Royalties
Sales , Leases , License etc
Consideration or wages or salaries received for Technical , managerial , engineering , construction or similar services
Commisions Received
Interest Received
Any other amount ?
ENTER AMOUNTS THE RELATED COMPANY PAID TO OR ON BEHALF OF THE LLC
(a)Domain and Website Expense
(b)Inventory Purchases
(c)Subscriptions
(d)Advertisement
(e)Legal and Professional Expenses
(f)Accounting and Bookkeeping
(g)Virtual Mail Box and Phone Services
(h)Contractor/Employee Payments
(i)Space Rental
(j)Shopify Subscriptions
(k)Other
Sales of Stock in Trade (Inventory)
Sales of Tangible Property (Not Inventory)
Rental Income
Royalties
Sales , Leases , License etc
Consideration or wages or salaries received for Technical , managerial , engineering , construction or similar services
Commisions Received
Interest Received
Amount Received From The U.S LLC in 2021
Amount Paid To "OR" on Behalf U.S LLC in 2021
Examples of related party transactions include those between:
a. A parent entity and its subsidiaries
b. Subsidiaries of a common parent
c. An entity and trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of the entity’s man
d. An entity and its principal owners, management, or members of their immediate families
e. Affiliates.
Transactions between related parties commonly occur in the normal course of business. Examples of common transactions with related parties
a. Sales, purchases, and transfers of real and personal property
b. Services received or furnished, such as accounting, management, engineering, and legal services
c. Use of property and equipment by lease or otherwise
d. Borrowings, lendings, and guarantees
e. Maintenance of compensating bank balances for the benefit of a related party
f. Intra-entity billings based on allocations of common costs
g. Filings of consolidated tax returns.
MOST COMMONLY ASKED QUESTIONS FROM CLIENTS WHEN COMPLETING THIS FO
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MOST COMMONLY ASKED QUESTIONS FROM CLIENTS WHEN COMPLETING THIS FORM
I have transferred funds from my personal Payoneer/Personal local bank account etc to the LLC's Mercur
account.
this will be under ROW 44 “Personal funds contributed to Fund the LLC bank Account”
As for advertising, We do work with influencers, and most of them are paid based on a commission. We do n
have any legal agreement or anything with them. Does that count as an "affiliate related party" or should I p
that in the advertising budget?
NO, do not report any payment you make to 3rd parties, they are not related parties.
I use an American Express (personal) to pay certain expenses for my LLC, such as flights, some business meal
etc. Is this considered business expenses on behalf of the owner?
If you use your own personal funds to support the business or the LLC, this is considered as your contribution
the LLC and need to be reported on ROW 45
I did have expenses that could be considered also for the LLC although they were spent from the Foreign
company account, is this information needed for deductions and can I apply for these deductions in my case
The purpose of this form is not to determine your income and deduction – and based on your activity the incom
may not be taxable here in the US), it is strictly to determine whether there has been any related party
transaction that needs to be reported.
Therefore if the foreign parent or company made expenditures on behalf of the US LLC, it needs to report suc
information on ROW 44
In the Business Activity Description, Can I enter the description as " ANY LAWFUL ACTIVITY'?
NO, this description is not acceptable and the business must specifically state what it is set up to do, for examp
retail, software services, publishing etc
Do you also need the operating agreement?
Yes, however, it is optional if you do not have one.
I have a virtual office in Wilmington, DE for banking purposes, which I assume does not count as US presenc
That is correct, a virtual address, bank account, registered agent and the mere formation of an LLC does no
count as physical presence
Once you have the returns ready, Can you please submit a draft to me for review. I'd like to check if all my
details are correct, just in case.?
Can I please have a copy of the filed forms when you have sent them to the IRS?
We will not be sending any returns to the IRS yet, until you have reviewed and signed off. A return can never
submitted to the IRS without the taxpayers review and signature - this is a standard practice, and because clie
are ultimately liable for any taxes and penalty, it is their right to inspect the returns before its submitted to th
IRS
What do you mean by "Country where LLC Owner or Employees conduct all LLC activities", is it my place
residency or where the customers are located?
I mean the country where the owner is permanently located and where the owner directs the activity or
operations of the LLCs business.
"Amount Paid To "OR" on Behalf U.S LLC" If I paid from my own money for stuff such as a domain and reside
agent but don't remember the exact amount. I am working from home... Can I leave it blank?
NO, you cannot leave it blank, you have to at least provide a good faith estimate of what the amount is.
Fo Example: I transferred from the LLC bank account to my private bank account 73,000€ and funded the ba
account with 22,000€ (not USD). How shall I write it correctly on your file?
For the 73k EURO, you will enter it on ROW 16, the amount must be expressed in EURO - its original form, I
will convert to USD during the filing process
For the 22k EURO, you will enter it on ROW 44, the amount must be expressed in EURO - its original form, I
will convert to USD during the filing process
On LLC address space I wrote business address. Will IRS send me something after?
will we receive a reply from the IRS after the forms have been processed or not?
The IRS does not send anything back letting you know that they have received or accepted the Form 5472
However, you will hear from them if there is something missing or wrong with the forms, and they will use th
address you provided
Related Party or company -- is it me or LLC?
if you own the LLC directly, you and the LLC are related, i.e {You >> U.S LLC} (in this structured, both you
the U.S LLC are related)
If you own the LLC through a foreign company you own, such as {You >> Foreign Company >> U.S LLC} (I
this structure, You, the foreign company and the U.S LLC are all related)
so questions about residence and address -- should I put my residence and my address here in my home count
for example: Ukraine?
Yes
Amounts received from the LLC -- I checked forms and understand that I need to put the amount I withdra
from my LLC. But where exactly should I put it? what row?
Enter on ROW 16 "LLC Funds Distributed to Owner"
It seems like these filings need relatively little information; there is no other information to report? Like for
example the gross income, net profit, etc?
That is correct, the purpose of this form is not to tax you or determine what your asset, liability or equity is, it
simply for the purpose of providing information on reportable transactions between related parties.
If a foreign person/corporation has USTB or ECI income that needs to be reported and taxes paid, it should
reported on form 1040NR and 1120-F respectively, NOT this form.
I am confused regarding virtual address. Although I dont have any physical setup in US, does owning a virtu
address make the business physcially present?
The following items does not cause an owner of a single member LLC to have a physical presence:
1. Forming an LLC or owning an LLC does not create a physical presence
2. Opening a U.S bank account does not create physical presence
3. Having a Virtual address or registered agent does not create physical presence.
I transfer $10,000 from my LLC bank account into my personal bank account,
I then use the same $10,000 already transferred to my personal account to pay for such services as accounting,
banking, contractors, advertising etc
Where do I enter the first transfer from my LLC bank account into my personal bank account ?
Where do I enter the subsequent payment I made on behalf of the LLC through my personal bank account ?
Great question:
First, you will enter the $10,000 from the LLC bank to your personal bank in ROW 16 - "LLC funds distribu
to owner"
Second, you will enter the $10,000 expenses you spent on behalf of the LLC in ROW 29 - 39, depending on wha
description fits well.
OR you can insert your own ROW and description and enter the correct amount
My LLC made payments of $64,910 to a contractor company outside of the US. I didn't find a way to add that
the organizer. Do we need to report that?
If money was paid directly from the LLC bank account directly to the contractor, then it should NOT be on
information return. If the LLC paid directly to a 3rd party, it is not a related party transaction.
However, assuming you paid this money directly from your personal account on behalf of the LLC, then it wil
reportable and you will indicate it on ROW 36 "Contractor/Employee Payments"
Do we need to report the fees charged by the mercury bank for each transaction somewhere as well?
Same as the issue above, if the LLC is paying this directly through the LLCs own bank account, it is not a rela
party transaction, and should NOT be reported on this organizer
The formation cost include the money I paid the agent to get the LLC EIN number. I assume that is correct
That is correct
I have not included the potential accounting cost I may incur from yourself, as I intend to pay that using the
company account. Should I report it on this years form?
If you are paying this personally on behalf of the LLC, it will rather be reported for TY 2022, which is due ne
year.
If you are paying me directly via the company’s account, then it will not be reportable or related party
transactions, because your LLC paid me and I am not a related party to your LLC.
This 2021 report is only focused on transactions from Jan 1 – Dec 31, 2022
If you have factored any 2022 expenses on this form, please let me know and we can revise the sheet.
- Do you charge for faxing/submitting the forms to the IRS?
No, it is free as a courtesy and convenience to our clients
I am a DIGITAL nomad and have been living in various locations, Do you have any advice on determining
country of residence?
you will usually be considered tax-resident in the country where you spend more than 6 months a year
you will normally remain tax-resident in your home country if you spend less than 6 months a year in another
country.
