A foreign-owned LLC
Disregarded for income tax, a corporation for Form 5472: the pro forma 1120 a foreign owner can't skip.
A single-member US LLC owned by a non-US person is a disregarded entity for income tax, but not for reporting. The IRS treats a foreign-owned US disregarded entity as a corporation for the limited purpose of Form 5472, filed with a pro forma Form 1120 to report its transactions with its owner and related parties. A US corporation 25% or more foreign-owned files Form 5472 with its own Form 1120.
Who files, what counts as a reportable transaction, the $25,000 penalty and why the beneficial ownership report no longer applies to US-formed companies are the compliance track's Form 5472 and BOI lesson.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- IRS guidance
- Instructions for Form 5472 (Rev. 12/2024), Foreign-owned U.S. DE (opens in a new tab)A foreign-owned single-member LLC files Form 5472 with a pro forma Form 1120Free to read
- Instructions for Form 5472 (Rev. 12/2024), Penalties (opens in a new tab)Information return of a 25% foreign-owned U.S. corporation or a foreign corporation engaged in a U.S. trade or businessFree to read
- Official form
- Form 5472 (opens in a new tab)Information Return of a 25% Foreign-Owned U.S. Corporation (PDF)PDF · Free to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Disregarded entityAn eligible entity with one owner that has not elected to be a corporation, ignored for income tax so its results go on the owner's return — Schedule C for an individual owner. It is still a separate legal entity, and still the employer for employment taxes
- Form 5472The IRS information return a US corporation that is 25% or more foreign-owned at any time in the year — or a US disregarded entity wholly owned by a foreign person — attaches to its income tax return to report transactions with related foreign parties. $25,000 penalty for each failure to file, and $25,000 more for each 30 days it continues past 90 days after IRS notice