IRS Form 8992: A comprehensive guide to 2026 reporting for US taxpayers with foreign investments
Many US expats run businesses abroad, and that is fine, but the IRS can step in when a controlled foreign corporation is not reported. This is where Form 8992 helps, because it shows the income the IRS needs to see under the GILTI rules in the Tax Cuts and Jobs Act. When a US taxpayer owns 10% of a foreign corporation, these rules can apply, and filing the return keeps things calm and stress-free.
This guide from Taxes for Expats keeps things simple so you can see how Form 8992 fits into your reporting. And when it is time to report your foreign investment earnings, our team is here to offer you steady guidance.
What is Form 8992?
The IRS calls Form 8992 the “US Shareholder Calculation of Global Intangible Low-Taxed Income.” It is the form the IRS uses to turn the yearly results of a foreign company into income that the United States can tax under section 951A. Think of it as the tool that brings foreign company profits into a 2026 US tax return when those profits fall under US tax rules.
This matters because Form 8992:
- shows how much income from foreign investments must be taxed in the United States for the year, even when that income was earned in another country.
- tracks any tested losses from a foreign company so that losses can reduce gains from other companies before the final amount is set.
- provides the base figure used for the section 250 deduction and foreign tax credit limits that apply to Net CFC Tested Income starting in 2026.
How it relates to GILTI (Global Intangible Low-Taxed Income)
The main calculation used to produce GILTI now produces Net CFC Tested Income for 2026 and later years. Congress changed the rules by removing the old 10% QBAI benefit and raising the effective tax rate for years starting after 2025. Because of this, Form 8992 now shows how a shareholder’s pro rata share of tested income, QBAI, and interest items from each foreign company flows into the new system.
All of these figures start at the CFC level. They come from the foreign company’s records and move through Schedules I-1 and A before they reach Form 8992. The form gathers all the numbers in one place so the IRS can see the full picture.
NOTE! Form 5471 supplies the ownership and income details that Form 8992 relies on, and the numbers on Schedules E, I, and I-1 later feed into the Net CFC Tested Income calculation. Because of this structure, the IRS wants added reporting, and Form 8992 becomes part of that review.
Who must file Form 8992?
In Moore v. United States, the Supreme Court explained that Congress can tax the earnings of an American-controlled foreign company even when no money is paid out to its owners. Because of that ruling, the people who must file are now easier to identify, and the rules point to a few main groups who carry this duty each year.
- US shareholders of CFCs – A taxpayer who owns part of a controlled foreign corporation is often pulled into this filing. When a foreign company is treated as a CFC for the year, the IRS wants the American owner to work out the income from that company, even when no cash comes home.
- Ownership thresholds – The key number is 10%. A person who owns at least 10% of the voting power or value in a foreign corporation is seen as a US shareholder under section 951A. When US shareholders together hold more than 50% of that company, it becomes a CFC. At that point, the IRS expects the owner to use Form 8992 to report the amount tied to GILTI or NCTI for that tax year.
- Situations when filing is mandatory – Filing is required when a US shareholder has tested income or a tested loss from one or more CFCs, because those numbers must be used in the GILTI math on Form 8992. The IRS expects this to be done every year as long as the foreign corporation stays a CFC and keeps producing results that matter for US tax.
Some entities, like domestic partnerships, S corporations, or consolidated groups, may pass the CFC details through Schedules K-2 and K-3 or through a single group filing. Even then, the law still looks at each owner’s pro rata share of the CFC’s income or loss to decide who picks up the final GILTI or NCTI amount on Form 8992.
This means the reporting may move through different hands, but the duty itself follows the owner who carries the economic impact.
Step-by-step guide to completing Form 8992
As a US business owner who lives abroad and runs a small company in another country. When tax season arrives for 2026, you’ll need to show the IRS how your company’s income connects to you and how much of it must be reported on Form 8992.
Step 1: Start in Part I by listing each controlled foreign corporation connected to the taxpayer for the year. Every CFC goes into the calculation, even if one had no profit at all. This gives the form the base information it needs before any income or deduction is counted.
Step 2: Next, the form pulls the tested income and tested loss from Schedule I-1 of each Form 5471. These amounts are added together to create the net CFC tested income that appears on line 3 of Part I. A positive total means the taxpayer continues into the GILTI section of Form 8992 for the rest of the computation.
Step 3: After the income and loss are combined, the form works out the deemed tangible income return. This uses 10% of the total qualified business asset investment. For example, a company with $400,000 of depreciable assets will show a $40,000 deemed return that reduces the income exposed to GILTI.
Step 4: The form then subtracts interest amounts linked to the CFCs. This adjustment helps the IRS see how much of the return on assets is real and how much is reduced by debt. Once these amounts are settled, the form updates the deemed tangible income return and prepares for the final GILTI figure.
Step 5: Part I now subtracts the deemed return from the net CFC tested income. The result becomes the GILTI amount that carries over to the main tax return for a US taxpayer with foreign investments. Foreign tax credits may reduce the final tax, but this inclusion must still be reported before any credit can apply.
Step 6: Part II and Schedule A break the data down by company. Each row on Schedule A shows the shareholder’s pro rata share of tested income, QBAI, and interest items for one CFC. A 70% stake in a foreign business, for example, will appear on one line, while a smaller holding in another business will appear on its own line.
Step 7: Before filing, all attachments must be in place: Schedule A for single filers, Schedule B for consolidated groups, and each Form 5471 with Schedule I-1. Large groups often have many pages because each US shareholder needs to be tied back to the same set of foreign-company figures.
A single-owner filing is simpler, but still must show a full path from the controlled foreign corporation to the final GILTI amount on the return.
How GILTI works in practice
GILTI began in 2017 and works like a yearly check-in on the money earned inside a foreign company, even when the cash stays overseas. It looks at a special number called “tested income” to make sure these profits are still counted for US tax, giving a clear picture of what the business really earns.
For anyone who owns a controlled foreign corporation, this means foreign profits can still affect a US tax return, and knowing how this works makes the 2026 rules much easier to handle.
What are the 2026 deadlines and filing requirements
For the 2025 income that you report in 2026, Form 8992 is sent in with your main US tax return. It follows the same due dates and the same extensions, so there is only one calendar to keep in mind.
Most people on a calendar year have an April 15, 2026, deadline, while Americans living abroad get an automatic move to June 15, 2026, and can extend to October 15, 2026, by filing Form 4868 or Form 7004.
What are the penalties for incorrect or missed Form 8992 filing?
Any US shareholder that owns part of a controlled foreign corporation should know that section 6038 penalties can apply when foreign information forms are late or incomplete.
- $10,000 base penalty – section 6038(b) starts with a $10,000 penalty for each foreign corporation when Form 8992 is not filed on time with full details.
- An extra $10,000 for every 30 days – once the IRS sends a notice, another $10,000 can apply for every 30 days past 90 days, up to a $50,000 limit each year.
- Foreign tax credit cuts – section 6038(c) can lower foreign tax credits by 10%, and then another 5% for every three months after the 90-day point. The cut can go to the greater of $10,000 or the income of the foreign entity.
- Small owners are not exempt – penalties can apply even when the pro rata share of CFC income on the US return is small, since the duty to file stands on its own.
- IRS can collect these penalties – the D.C. Circuit in Farhy confirmed that section 6038(b) penalties can be assessed and collected through normal IRS tools, so timely Form 8992 filing is key for US taxpayers with foreign investments.
- The Form 8992 instructions say the form must be completed and attached to the return by the due date, including extensions, so missing CFC details can count as failing to file.
NOTE! For a late Form 8992 tied to a CFC, the real “amnesty” is usually a mix of DIIRP plus a strong, reasonable cause statement, or Streamlined Procedures if there is unreported income.
Need help navigating Form 8992? Talk to a tax expert today
Form 8992 is a key part of reporting income from a controlled foreign corporation, and it ties directly to figures like tested loss, pro rata share, and Net CFC Tested Income. Because it connects to Form 5471, Form 8993, foreign tax credits, and strict section 6038 penalties, it plays a much bigger role in your return than most taxpayers expect.
Knowing what Form 8992 covers and how it works – from filing rules to the GILTI calculation – helps keep your 2026 reporting clear and accurate. Taxes for Expats can walk you through every step so your filing stays correct, complete, and stress-free.
FAQ
If Form 8992 is missed, the IRS may treat it as a failure to file foreign information returns, which can lead to section 6038 penalties and reduced foreign tax credits until it is corrected.
An LLC itself usually does not file Form 8992, but its owners may need to file it when the LLC is treated as a partnership or disregarded entity that holds CFC shares for them.
Subpart F covers specific types of passive or mobile income, while GILTI (reported through Form 8992) pulls in most of the remaining active earnings of controlled foreign corporations each year.
Form 5471 provides the detailed CFC financials and ownership data used to calculate tested income, tested loss, and other figures that then flow into Form 8992.
Form 8993 takes the GILTI amount from Form 8992 and computes the Section 250 deduction, which can lower the US tax on that income, especially for corporations and individuals using a Section 962 election.
Schedule A lists each CFC’s information that feeds into the Form 8992 totals, while Schedule C of Form 1120 is where a corporation reports the GILTI or Net CFC Tested Income amount from Form 8992 on its main return.
Form 1118 is where a corporation claims foreign tax credits that can offset the GILTI inclusion from Form 8992, so both forms must line up to avoid paying tax twice on the same income.
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