The indebtedness statement is required for all Category 3 filers. The statement must include the name of the shareholder, tax ID, address, type of indebtedness between the CFC & shareholder, and the number of shares owned by the US shareholder.

This is the 16th video in a series which covers the preparation of IRS Form 5471 for the 2021 tax year. Each schedule has a separate video within the playlist titled "IRS Form 5471 - Beginner Series". A list of all of the videos with links is included in the description below.

The IRS Form 5471 is filed by U.S. persons that have an interest in a Controlled Foreign Corporation (CFC). The sample Form 5471 covered in this playlist is for a U.S. person that is a majority shareholder (75%) of a Cayman Island's Corporation. The remaining 25% of the stock is owned by a non-U.S. shareholder.

The CFC invests in various stocks, bonds & other investments, so the earnings of the CFC will constitute Subpart F income, specifically Foreign Personal Holding Company (FPHC) income under Section 954(c).

The link to the complete playlist and each individual video is below.

Playlist:    • IRS Form 5471 - Beginner Series  

Complete list of videos in the tutorial. We recommend watching in the order presented.

1. Introduction & Page 1 of Form 5471:    • How to Prepare IRS Form 5471 - Introd...  
2. Schedule B: U.S. Shareholders:    • Schedule B: US Shareholders - IRS For...  
3. Schedule C: Income Statement:    • Schedule C: Income Statement - IRS Fo...  
4. Schedule F: Balance Sheet:    • Schedule F: Balance Sheet - IRS Form ...  
5. Schedule H: Current E&P:    • Schedule H: Current E&P - IRS Form 5471  
6. Schedule I & Worksheet A: Shareholder's Income from FC:    • Schedule I: Summary of Shareholder In...  
7. Schedule G: Other Information:    • Schedule G: Other Information - IRS F...  
8. Schedule E: Income & Taxes Paid:    • Schedule E: Income Taxes Paid or Accr...  
9. Schedule E-1: Taxes Related to Type of Income:    • Schedule E-1: Taxes Paid or Deemed Pa...  
10. Schedule M: Related Party Transactions:    • Schedule M: Transactions with Related...  
11. Schedule I-1: GILTI:    • Schedule I-1: Global Intangible Low-T...  
12. Schedule J: E&P of Corporation:    • Schedule J: Accumulated E&P of CFC - ...  
13. Schedule P: Previously Tax E&P of US Shareholder:    • Schedule P: Previously Taxed E&P of U...  
14. Schedule Q: CFC Income by Groups:    • Schedule Q: CFC Income by Groups - IR...  
15. Schedule O: Organization & Stock Acquisition:    • Schedule O Part 1 & 2: Organization &...  
16. Category 3 Indebtedness Statement:    • Category 3: Indebtedness Statement - ...  
17. Schedule R: Dividend Distributions:    • Schedule R: Distributions From Foreig...  
18. Where to Report Subpart F Inclusion:    • Where to Report Subpart F Income - IR...  

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DISCLAIMER: The information provided in this video may contain information about tax, financial, and legal topics. Such materials are for informational purposes only and may not reflect the most current developments. These informational materials are not intended and should not be taken as tax, financial, or legal advice. You should contact an advisor to discuss your specific facts and circumstances. Self-help services may not be permitted in all states or jurisdictions. The use of these materials does not create an attorney-client or confidential relationship. This video does not include information about every topic or issue related to these informational materials.

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