926 Filing Requirements
By The 926 filing is a crucial tax form that must be filed by US citizens and resident aliens who transfer property to a foreign corporation. The form is also known as the Return by a US Transferor of Property to a Foreign Corporation, and it is used to report the transfer of stock or assets to a foreign corporation. Failure to file the 926 form can result in significant penalties, so it is essential to understand the filing requirements and deadlines. In this blog post, we will discuss the 926 filing requirements, including who must file the form, when it must be filed, and how to complete it.
Who Must File Form 926?
The 926 form must be filed by US citizens or resident aliens who transfer property to a foreign corporation. This includes the transfer of stock, securities, or assets to a foreign corporation. If the transfer of property exceeds $100,000 in value, the transferor must file Form 926. Additionally, the transferor must file the form even if the transfer is tax-free, such as in a reorganization or merger.
When to File Form 926?
The 926 form must be filed within 45 days of the transfer of property to the foreign corporation. The transferor must also attach a copy of the 926 form to their tax return for the year in which the transfer occurred. It is crucial to note that the 926 form must be filed separately from the tax return, and failure to file the form can result in significant penalties.
How to Complete Form 926?
The 926 form is a straightforward form, consisting of only two pages. The form requires the transferor to provide information about the transfer of property, including the name of the foreign corporation, the type of property transferred, and the value of the property. The form also requires the transferor to provide information about the transferor and the foreign corporation, such as their names, addresses, and taxpayer identification numbers.
To complete the 926 form, the transferor must follow the instructions provided by the IRS carefully. The instructions provide detailed information about how to complete each section of the form and what information is required.
Penalties for Failing to File Form 926:
Failure to file the 926 form can result in significant penalties. The penalty for failing to file the form is 10% of the fair market value of the property transferred, up to a maximum of $100,000. Additionally, the penalty for failing to provide accurate information on the form is $10,000 or 10% of the fair market value of the property transferred, whichever is greater.
Frequently Asked Questions:
What is the purpose of Form 926?
Form 926 is used to report the transfer of stock or assets to a foreign corporation.
Who must file Form 926?
US citizens or resident aliens who transfer property to a foreign corporation must file Form 926.
When must Form 926 be filed?
Form 926 must be filed within 45 days of the transfer of property to the foreign corporation.
What are the penalties for failing to file Form 926?
The penalty for failing to file Form 926 is 10% of the fair market value of the property transferred, up to a maximum of $100,000.
What are the penalties for failing to provide accurate information on Form 926?
The penalty for failing to provide accurate information on Form 926 is $10,000 or 10% of the fair market value of the property transferred, whichever is greater.
Is Form 926 required for tax-free transfers?
Yes, Form 926 is required for tax-free transfers, such as in a reorganization or merger.
Can Form 926 be filed electronically?
Yes, Form 926 can be filed electronically using the IRS’s Modernized e-File (MeF) system.
Is Form 926 only required for transfers to foreign corporations?
Yes, Form 926 is only required for transfers to foreign corporations.
Can a tax professional file Form 926 on behalf of their client?
Yes, a tax professional can file Form 926 on behalf of their client. However, the client must provide the tax professional with the necessary information to complete the form accurately.
What should I do if I missed the deadline for filing Form 926? If you missed the deadline for filing Form 926, you should file the form as soon as possible. It is better to file the form late than not file it at all. However, be aware that filing the form late can result in penalties, so it is essential to file the form as soon as possible.
In conclusion, Form 926 is a crucial tax form that must be filed by US citizens and resident aliens who transfer property to a foreign corporation. Failure to file the form can result in significant penalties, so it is essential to understand the filing requirements and deadlines. The 926 form must be filed within 45 days of the transfer of property to the foreign corporation, and it must be filed separately from the tax return. To complete the form, the transferor must follow the instructions provided by the IRS carefully. If you have any questions about the 926 filing requirements, it is recommended that you consult with a tax professional.
