A U.S. person or entity who makes a transfer of property to a foreign corporation may be required to file this form, as set forth in tax code section 6038B(a)(1)(A) or 367(d). Generally, the form is required for transfers of property in exchange for stock in the foreign corporation, but there are an assortment of tax code sections (listed below) that may require the filing of this form.
This 1.5 page form requires the name, address and tax ID of the person or entity making the transfer, the name and tax ID of the controlling shareholder and a description of the property transferred to the foreign corporation.
With the tax return of the transferor for the year of the transfer.
With the IRS office where the person's or entity's tax return is filed.
The IRS estimate for the average time required to prepare this form is 4 hours and 22 minutes plus the time required to study the applicable instructions, tax code sections and regulations.
The penalty for a failure to file this form is 10% of the fair market value of the property transferred, up to a maximum of $100,000. The penalty may be waived by the IRS due to a showing of reasonable cause by the taxpayer.
Pertinent tax code sections include 318, 331, 352, 354, 356, 361, 367, 368, 936, 958B, 6038B.
In earlier years, Form 926 was also used to disclose transfers of property to a foreign partnership but that information is now provided on Form 8865. Transfers to a foreign trust or estate are now disclosed on Form 3520.
This information is not intended to represent an authoratative and detailed discussion of the Form 1040 filing requirements, which are only available in the applicable U.S. tax code and IRS regulations.