Which Form 8865 Defined 2023-2024

Welcome to our segment on foreign information reporting for foreign entities. If you own an interest in certain foreign entities, the IRS wants to know about it, and you're going to have to file some forms. So, if you have an ownership interest in a foreign corporation, you may have to file Form 5471. If you have an ownership interest in a foreign partnership, you may have to file Form 8865. Generally, you have to report ownership interests of ten percent or more. Remember, this ten percent or more can also be achieved by owning it indirectly or constructively. So, if you own an entity that owns a foreign entity, it's possible that you indirectly own the foreign entity through the level one entity. Well, what about indirectly indirectly? It is a little bit more complex because you're deemed to own a percentage of any subsidiary entities that are owned by an entity in which you directly own an interest. It's best illustrated with an example. Let's say I own twenty percent of a foreign corporation, and that foreign corporation in turn owns twenty percent of another foreign corporation. So now I directly own twenty percent of the first corporation, and I indirectly own twenty percent of the subsidiary corporation. I would need to report both corporations. There's also something known as constructive ownership. Constructive ownership means that you're deemed to own certain shares that are owned by your family members. So, let's say your father owns five percent of a foreign company, and you own five percent of a foreign company because your family members together you own ten percent. You're going to meet that threshold, and you're most likely going to have some filing requirements. When it comes to disregarded entities, you may have to file Form 8858....