Instructions For Form 8858 Sheet (Page 4 of 4) in pdf

than starting with foreign book income,

on line 7 the same amount entered on

owner is a CFP, check the box for CFPs

and show GAAP-to-tax adjustments on

line 6.

and complete lines 1 through 19 using the

lines 2 and 3.

headings in columns (a) through (e) of the

Blocked income. The E&P or taxable

CFP set of columns. If you are completing

income of the FDE, as reflected on

The adjustments may include the

Schedule M for an FDE for which the tax

Schedule H, must not be reduced by all or

following:

owner is a CFC, check the box for CFCs

any part of such E&P or taxable income

•

Capital gains and losses.

and complete lines 1 through 19 using the

that could not have been distributed by

•

Depreciation, amortization, and

the FDE due to currency or other

headings in columns (a) through (f) of the

depletion.

CFC set of columns.

restrictions or limitations imposed under

•

Investment or incentive allowance.

the laws of any foreign country.

•

Charges to statutory reserves.

Column (e). Use column (e) to report

•

Inventory adjustments. Inventories

Schedule M

transactions between the FDE and any

must be taken into account according to

U.S. person with a 10% or more direct

Important: In translating the amounts

the rules of sections 471 (incorporating

interest in the CFP or any 10% or more

from functional currency to U.S. dollars,

the provisions of section 263A) and 472

U.S. shareholder of any corporation

use the average exchange rate for the

and the related regulations.

controlling the CFC. If you are a Category

FDE’s tax year. See section 989(b).

•

Taxes. See the instructions for

1 filer of Form 8865, or a Category 4 filer

Report the exchange rate in the entry

Schedule C, line 7.

of Form 5471, do not report transactions

space provided at the top of Schedule M

between yourself and the FDE under

Attach a separate schedule that lists

using the “divide-by convention” specified

column (e). Report the transactions only

each applicable adjustment item. For

under Reporting Exchange Rates on

under column (b).

each adjustment item, indicate the

Form 8858 on page 2.

adjustment amount and whether the

Every U.S. person that is required to

Line 6. Report on line 6 dividends

amount is a net addition or net

file Schedule M (see Who Must File on

received by the FDE that were not

subtraction. The separate schedule

page 1) must file the schedule to report

previously taxed under subpart F in the

should also show two totals, the total net

the transactions that occurred during the

current year or in any prior year.

additions amount to be entered on line 2,

FDE’s annual accounting period ending

and the total net subtractions amount to

with or within the U.S. person’s tax year.

Lines 18 and 19. Report on lines 18 and

be entered on line 3.

19 the largest outstanding balances

If a U.S. corporation is the U.S. person

Line 5. DASTM gain or (loss), reflecting

filing Schedule M and is a member of a

during the year of gross amounts

unrealized exchange gain or loss, should

borrowed from, and gross amounts

consolidated group, list the common

be entered on line 5 only for FDEs that

parent as the U.S. person filing Schedule

loaned to, the related parties described in

use DASTM.

columns (b) through (f). Do not enter

aggregate cash flows, year-end loan

Line 7. Enter the line 6 functional

Column headings. There are 2 sets of

balances, average balances, or net

currency amount translated into U.S.

column headings above lines 1 through

balances. Do not include open account

dollars at the average exchange rate for

19. The first set of column headings is to

balances resulting from sales and

the FDE’s tax year. See section 989(b).

be used in cases where the tax owner is a

purchases reported under other items

Report the exchange rate using the

CFP. The second set of column headings

listed on Schedule M that arise and are

“divide-by convention” specified under

is to be used in cases where the tax

Reporting Exchange Rates on Form 8858

owner is a CFC. If you are completing

collected in full in the ordinary course of

on page 2. If the FDE uses DASTM, enter

Schedule M for an FDE for which the tax

business.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United

States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to

figure and collect the right amount of tax.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the

form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their

contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are

confidential, as required by section 6103.

The time needed to complete and file this form and related schedules will vary depending on individual circumstances. The

estimated burden for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the

estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this

form is shown below.

Learning about the

Preparing and sending

Form

Recordkeeping

law or the form

the form to the IRS

8858

17 hr., 56 min.

4 hr., 10 min.

4 hr., 38 min.

Sch. M (8858)

24 hr., 9 min.

6 min.

30 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form and related

schedules simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

-4-

Instructions For Form 8858 Sheet Page 4

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