Instructions For Form 8858 - 2011 (Page 3 of 5) in pdf

accounting period or taxable year of the

qualified business unit (QBU) and the

covered by Form 8865 (as described in

tax owner. Therefore, in the case of a

definition of a QBU.

Regulations section 1.6038-3(f)).

U.S. tax owner, the annual accounting

Hyperinflationary exception. An entity

Line 5

period of the FDE is the taxable year of

that otherwise would be required to use a

You must attach an organizational chart

the U.S. tax owner; and in the case of a

hyperinflationary currency as its functional

that includes the following information

CFC or CFP that is a tax owner, the

currency must use the U.S. dollar as its

with respect to the chain of ownership

annual accounting period of the FDE is

functional currency and compute income

between the tax owner and the FDE and

the annual accounting period of the CFC

or loss or earnings and profits using the

the chain of ownership between the FDE

or CFP.

U.S. dollar approximate separate

and all entities in which the FDE has a

transactions method of accounting

10% or more direct or indirect interest:

Person Filing This Return

(DASTM) under the special rules of

•

The name and percentage of

Regulations section 1.985-3. See

In the spaces provided at the top of page

ownership of all entities in the chain of

Regulations section 1.985-1(b)(2).

1 of Form 8858, provide the identifying

ownership, including partnerships and

information for the U.S. person filing Form

Line 1b(2)—Reference ID

entities disregarded as separate from

8858 (see definition on page 1).

Number

their owners.

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

•

The FDE’s position in the chain of

This line is optional for the foreign

person filing Form 8858 and is a member

ownership.

disregarded entity’s tax year that begins

•

of a consolidated group, list the common

The tax classification of all entities in

in 2011. For that tax year, this line may be

parent as the person filing the return and

the chain of ownership (see Form 8832

used to include any referencing

enter its identifying information in the

instructions for tax classification rules and

information that is useful to the filer in

spaces provided at the top of page 1 of

related definitions).

carrying out its obligations under section

the form.

•

The country under whose law each

6038. For example, filers may want to use

entity is organized.

Name Change

line 1b(2) to assign a reference ID

number to a foreign disregarded entity to

For these purposes, the rules of

If the name of the person filing the return,

uniquely identify the foreign disregarded

section 958(a) (relating to “direct and

the tax owner, the direct owner, or the

entity in order to keep track of the foreign

indirect ownership”) apply.

FDE whose activities are being reported

disregarded entity from tax year to tax

changed within the past 3 years, show the

Each filer of Form 8858 that is required

year.

prior name(s) in parentheses after the

to file an organizational chart with respect

current name.

The reference ID number must meet

to more than one FDE may satisfy this

the requirements set forth below.

requirement by filing a single

Addresses

organizational chart that includes the

Note. Because reference ID numbers

Use the following instructions to complete

required information with respect to all

are established by or on behalf of the

lines 1a, 2a, 2b, 3a, 4a, and the entry

FDEs.

U.S. person filing Form 8858, there is no

spaces at the top of page 1 of the form for

need to apply to the IRS to request a

Schedule C

the filer’s address.

reference ID number or for permission to

U.S. Addresses. Include the suite,

use these numbers.

Use Schedule C to report a summary

room, or other unit number after the street

income statement for the FDE computed

Note. The reference ID number

address. If the Post Office does not

in the FDE’s functional currency in

assigned to a foreign disregarded entity

deliver mail to the street address and the

accordance with U.S. generally accepted

on Form 8858 generally has relevance

U.S. person has a P.O. box, show the box

accounting principles (GAAP). Enter in

only on Form 8858 and should generally

number instead.

the U.S. dollar column each line item

not be used with respect to that foreign

Foreign Addresses. Enter the

functional currency amount translated into

disregarded entity on any other IRS tax

information in the following order: city,

dollars using U.S. GAAP translation rules.

form.

province or state, and country. Follow the

If the FDE does not maintain U.S. GAAP

Requirements

country’s practice for entering the postal

income statements in U.S. dollars, you

code, if any. Do not abbreviate the

can use the average exchange rate as

The reference ID number that is entered

country name. However, if you are filing

determined under section 989(b). The

in item 1b(2) must be alphanumeric and

Form 8858 electronically, enter a valid

rate used should be the rate stated on

no special characters or spaces are

country code posted on the IRS website

line 7, Schedule H. If you choose to use

permitted. The length of a given reference

instead of the

the average exchange rate rather than

ID number is limited to 50 characters.

country name.

the U.S. GAAP translation rules, check

As a reminder for future tax years,

the box above line 1 on Schedule C.

Identifying Numbers

as announced by the IRS in

Special rules for DASTM. If the FDE

Use the following instruction to complete

October 2011

CAUTION

uses DASTM, the functional currency

lines 1b, 3c, 4c, and the entry space at

businesses/corporations/article/

column should reflect local

the top of page 1 of the form for the filer’s

0,,id=246596,00.html, for the foreign

hyperinflationary currency amounts

identifying number. The identifying

disregarded entity’s tax year that begins

computed in accordance with U.S. GAAP.

number of an individual is his or her social

in 2012 and for all years thereafter, the

The U.S. dollar column should reflect

security number (SSN). The identifying

use of a reference ID number (Form

such amounts translated into dollars

number of all others is their employer

8858, line 1b(2)) will be mandatory in

under U.S. GAAP translation rules.

identification number (EIN).

cases where no EIN was entered in item

Differences between this U.S. dollar

1b(1).

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

GAAP column and the U.S. dollar income

person filing Form 8858 and is a member

or loss figured for tax purposes under

Line 1h—Principal Business

of a consolidated group, see Person

Regulations section 1.985-3(c) should be

Activity

Filing This Return above.

accounted for on Schedule H. See

Enter a brief description of the FDE’s

Special rules for DASTM, under Schedule

Functional Currency

principal business activity.

H, below.

Use the following instruction to complete

Line 7. Include on line 7, adjustments for

lines 1i, 3e, and 4d.

Line 3b

extraordinary items, prior period

Enter the entity’s functional currency.

If the tax owner is a CFC, enter the

adjustments, and the provision for

See sections 985 and 989, and

annual accounting period covered by

income, war profits, and excess profits

Regulations sections 1.985-1(a) through

Form 5471 (as described in Regulations

taxes deducted in accordance with U.S.

section 1.6038-2(e)). If the tax owner is a

GAAP. The terms “extraordinary items”

determining the functional currency of a

CFP, enter the annual accounting period

and “prior period adjustments” have the

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Instructions For Form 8858 - 2011 Page 3

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