Userid: ______DTD INSTR04 Leadpct: 0% Pt. size: 9 ❏ Draft ❏ Ok to Print PAGER/SGML Fileid: ...ents\Assignments 2008\Form 926\926 Instruction\Ok-to-Print\I926.SGM (Init. & date) Page 1 of 4 Instructions for Form 926 12:37 - 11-FEB-2009

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Department of the Treasury Instructions for Form 926 Internal Revenue Service (Rev. December 2008) Return by a U.S. Transferor of Property to a Foreign Corporation

Section references are to the Internal reported the income from the transfer on Revenue Code unless otherwise noted. Exceptions to Filing its timely filed return, or 1. For exchanges described in section • The transfer is considered to be to a 354 or 356, a U.S. person does not have foreign corporation solely by reason of What’s New to file Form 926 if: Regulations section 1.83-6(d)(1) and the a. The U.S. person exchanges stock fair market value of the property Form 926 has been substantially of a foreign corporation in a transferred did not exceed $100,000. redesigned. Part III is new and numerous recapitalization described in section changes have been made throughout the 368(a)(1)(E) or remaining parts. These instructions have When and How To File b. The U.S. person exchanges stock Form 926 (and the additional information been revised to reflect the changes made of a domestic or foreign corporation for to the form. Also, these instructions have required under Regulations section stock of a foreign corporation under an 1.6038B-1(c) and Temporary Regulations been updated to reflect changes made to asset reorganization described in section Regulations section 1.6038B-1 and sections 1.6038B-1T(c)(1) through (5) 368(a)(1) that is not treated as an indirect and 1.6038B-1T(d)) must be filed with the Temporary Regulations section stock transfer under Regulations section 1.6038B-1T by T.D. 9243 and T.D. 9300. U.S. transferor’s income tax return for the 1.367(a)-3(d). tax year that includes the date of the 2. Generally, a domestic corporation transfer. General Instructions that distributes stock or securities of a domestic corporation under section 355 is Other Forms That May Be Purpose of Form not required to file Form 926. However, Required this exception does not apply if the Persons filing this form may be required Use Form 926 to report certain transfers distribution is of stock or securities of a to file Form TD F 90-22.1, Report of of tangible or intangible property to a foreign controlled corporation to a Foreign Bank and Financial Accounts. foreign corporation required by section distributee shareholder who is not a U.S. 6038B. citizen or resident or a domestic A U.S. transferor that is required to corporation. enter into a gain recognition agreement Who Must File 3. A U.S. person that transfers stock under section 367 to qualify for or securities under section 367(a) does nonrecognition treatment must file Form Generally, a U.S. citizen or resident, a 8838, Consent To Extend the Time To domestic corporation, or a domestic not have to file Form 926 if either a or b below applies. Assess Tax Under Section 367—Gain estate or trust must complete and file Recognition Agreement, or a similar Form 926 to report certain transfers of a. The U.S. transferor owned less statement, to extend the statute of property to a foreign corporation that are than 5% of both the total voting power limitations with respect to the gain described in section 6038B(a)(1)(A), and the total value of the transferee realized but not recognized on the 367(d), or 367(e). See section 6038B, foreign corporation immediately after the transfer. and Regulations sections 1.6038B-1 and transfer and: 1.6038B-1T for more information. • The U.S. transferor qualified for Penalties for Failure to File nonrecognition treatment with respect to If a taxpayer fails to comply with section the transfer, or 6038B, the penalty equals 10% of the fair Special Rules • The U.S. transferor is a tax-exempt • market value of the property at the time of Transfers by a partnership. If the entity and the income was not unrelated the transfer. The penalty will not apply if transferor is a partnership (domestic or business income, or the failure to comply is due to reasonable foreign), the domestic partners of the • The transfer was taxable to the U.S. cause and not to willful neglect. The partnership, not the partnership itself, are transferor under Regulations section penalty is limited to $100,000 unless the required to comply with section 6038B 1.367(a)-3(c) and such person properly failure to comply was due to intentional and file Form 926. Each domestic partner reported the income from the transferor disregard. Moreover, the period of is treated as a transferor of its on its timely filed return (including limitations for assessment of tax upon the proportionate share of the property. See extensions) for the tax year that includes transfer of that property is extended to the the instructions for line 2 for additional the date of transfer; or date that is 3 years after the date on information. • The transfer is considered to be to a which the information required to be • Transfers by a husband and wife. A foreign corporation solely by reason of reported is provided. husband and wife may file Form 926 Regulations section 1.83-6(d)(1) and the jointly, but only if they file a joint income fair market value of the property tax return. transferred did not exceed $100,000. • Transfers of cash. A U.S. person that b. The U.S. transferor owned 5% or Specific Instructions transfers cash to a foreign corporation more of the total voting power or the total Important: All information reported on must report the transfer on Form 926 if (a)value of the transferee foreign corporation Form 926 must be in English. All amounts immediately after the transfer the personimmediately after the transfer and: must be stated in U.S. dollars. If the holds directly or indirectly at least 10% of• The transferor (or one or more information required in a given section the total voting power or the total value ofsuccessors) properly entered into a gain exceeds the space provided within that the foreign corporation or (b) the amountrecognition agreement, or section, do not write “see attached” in the of cash transferred by the person to the• The U.S. transferor is a tax-exempt section and then attach all of the foreign corporation during the 12-monthentity and the income was not unrelated information on additional sheets. Instead, period ending on the date of the transferbusiness income, or complete all entry spaces in the section exceeds $100,000. See Regulations • The transfer was taxable to the U.S. and attach the remaining information on section 1.6038B-1(b)(3). transferor and such person properly additional sheets. The additional sheets

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must conform with the IRS version of that section 1.367(a)-1T(c)(3)(ii)(D). If the next to the information entered in this section. answer to line 2d is “Yes,” the rules of section. In addition, if you contributed Regulations section property to a foreign corporation as a part Part I—U.S. Transferor 1.367(a)-1T(c)(3)(ii)(C) apply. of a wider transaction, briefly describe the entire transaction. Information Part II—Transferee Identifying Number Foreign Corporation Part IV— Additional The identifying number of an individual is Information Information Regarding his or her social security number (SSN). The identifying number of all others is Line 5. Address. Enter the information Transfer of Property their employer identification number in the following order: city, province or Line 10. List the type of nonrecognition (EIN). state, and country. Follow the country’s transaction that gave rise to the reporting practice for entering the postal code, if obligation (e.g., section 332, 351, 354, any. Do not abbreviate the country name. Line 1a 356, or 361). Line 6. Enter the two-digit country code If you answered “Yes” to question 1a and Line 11a. If gain recognition was of the transferee foreign corporation’s the asset is a tangible asset, section required with respect to any transfer country of incorporation or organization. 367(a)(5) may require basis adjustments. reported in Part III under section See the list of country codes which begins If you answered “No” to question 1a and 904(f)(3), attach a statement identifying on page 3. the asset is a tangible asset, the transfer the transfer and the amount of gain is taxable under sections 367(a)(1) and Line 7. List the entity classification (e.g., recognized. (a)(5). If the asset transferred is an partnership, corporation, etc.) of the intangible asset, see section 367(d) and transferee foreign corporation under the Line 11b. If gain recognition was its regulations. laws of the country of incorporation or required with respect to any transfer organization. reported in Part III under section Line 1b 904(f)(5)(F), attach a statement identifying the transfer and the amount of If the transferor went out of existence Line 8. See section 957(a) to determine gain recognized. pursuant to the transfer (e.g., as in a whether the corporation is a controlled reorganization described in section foreign corporation immediately after the transfer. Line 11c. If recapture was required with 368(a)(1)(C)), list the controlling respect to any transfer reported in Part III shareholders and their identifying under section 1503(d) (dual consolidated numbers. Part III—Information loss), attach a statement identifying the Regarding Transfer of transfer and the amount of recapture. See Line 1c section 1503(d) and the regulations If the transferor was a member of an Property thereunder. affiliated group filing a consolidated tax Column (a). Date of Transfer. Enter the return (see sections 1501 through 1504), Line 11d. If exchange gain recognition first date on which title to, possession of, was required with respect to any transfer but was not the parent corporation, list the or rights to the use of the property passed name and EIN of the parent corporation reported in Part III under section 987, for U.S. income tax purposes. See attach a statement identifying the transfer and file Form 926 with the parent Temporary Regulations section corporation’s consolidated return. and the amount of exchange gain 1.6038B-1T(b)(4) for additional recognized. See Regulations section Line 1d information. 1.987-5. If the answer to line 1d is ‘‘Yes,’’ and if the Column (b). Description of property. Provide a description of the property Line 12. If this transfer resulted from a asset is transferred in an exchange change in the classification of the described in section 361(a) or (b), attach transferred. With respect to section 6038B(a)(1)(A) transfers, see Temporary transferee to that of a foreign corporation the following: (a deemed transfer resulting from a • A statement that the conditions set Regulations section 1.6038B-1T(c)(4) for specific information that must be reported classification change on Form 8832, forth in the second sentence of section Entity Classification Election, or a 367(a)(5) and any regulations under that in column (b) (or, if necessary, under the Supplemental Information section or on termination of a section 1504(d) election), section have been satisfied. check the “Yes” box. If the transfer was • An explanation of any basis or other attached sheets). With respect to section 367(d) transfers, see Temporary an actual transfer of property to a foreign adjustments made pursuant to section corporation, check the “No” box. 367(a)(5) and any regulations thereunder. Regulations section 1.6038B-1T(d). With respect to section 367(e) transfers, see Line 13. See Temporary Regulations Line 2 Regulations section 1.6038B-1(e). sections 1.367(a)-4T through 1.367(a)-6T If a partnership (whether foreign or Column (c). Fair market value. Enter for instances in which a transferor must domestic) transfers property to a foreign the fair market value of the property recognize income on the transfer of corporation in an exchange described in transferred (measured as of the date of tangible property that qualifies for section 367(a)(1), then a U.S. person that transfer). nonrecognition treatment (see section is a partner in the partnership shall be 367(a)(3) and Temporary Regulations treated as having transferred a Column (d). Cost or other basis. Enter section 1.367(a)-2T). Additional proportionate share of the property in an your adjusted basis in the property information is required to be attached to exchange described in section 367(a)(1). transferred on the date of the transfer. this form. See Temporary Regulations A U.S. person’s proportionate share of See sections 1011 through 1016 for more sections 1.6038B-1T(c)(4)(iii) and (vii), partnership property shall be determined information for the determination of and 1.6038B-1T(c)(5). under the rules and principles of sections adjusted basis. 701 through 761 and the regulations Line 17a. If you checked the ‘‘Yes’’ box, thereunder. See Temporary Regulations Supplemental information required additional information is required to be section 1.367(a)-1T(c)(3). to be reported attached to this form. See Temporary Regulations section 1.6038B-1T(d). Line 2d. For definition of “regularly Enter any information from Part III that is traded on an established securities required to be reported in greater detail. Line 17b. See Temporary Regulations market,” see Temporary Regulations Identify the applicable column number section 1.6038B-1T(d). -2- Page 3 of 4 Instructions for Form 926 12:37 - 11-FEB-2009

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Congo, Democratic Republic of Jamaica ...... JM Foreign Country and U.S. (Zaire) ...... CG Jan Mayen ...... JN Cook Islands ...... CW Japan ...... JA Possession Codes Coral Sea Islands Territory ...... CR Jarvis Island ...... DQ Enter the applicable code in Part II, line 6. Corsica ...... VP Jersey ...... JE Costa Rica ...... CS Johnston Atoll ...... JQ Country Code Cote D’Ivoire (Ivory Coast) ...... IV Jordan ...... JO Afghanistan ...... AF Croatia ...... HR Juan de Nova Island ...... JU Akrotiri ...... AX Cuba ...... CU Kazakhstan ...... KZ Albania ...... AL Cyprus ...... CY Kenya ...... KE Algeria ...... AG Czech Republic ...... EZ Kingman Reef ...... KQ Aland Island ...... XI Denmark ...... DA Kiribati (Gilbert Islands) ...... KR American Samoa ...... AQ Dhekelia ...... DX Korea, Democratic People’s Andorra ...... AN Djibouti ...... DJ Republic of (North) ...... KN Angola ...... AO Dominica ...... DO Korea, Republic of (South) ...... KS Anguilla ...... AV Dominican Republic ...... DR Kuwait ...... KU Antarctica ...... AY Ecuador ...... EC Kyrgyzstan ...... KG Antigua and Barbuda ...... AC Egypt ...... EG Laos ...... LA Argentina ...... AR El Salvador ...... ES Latvia ...... LG Armenia ...... AM England ...... XE Lebanon ...... LE Aruba ...... AA Equatorial Guinea ...... EK Lesotho ...... LT Ascension ...... XA Eritrea ...... ER Liberia ...... LI Ashmore and Cartier Islands ..... AT Estonia ...... EN Libya ...... LY Australia ...... AS Ethiopia ...... ET Liechtenstein ...... LS Austria ...... AU Europa Island ...... EU Lithuania ...... LH Azerbaijan ...... AJ Falkland Islands (Islas Malvinas) . . FK Luxembourg ...... LU Azores ...... XZ Faroe Islands ...... FO Macau ...... MC Bahamas, The ...... BF Fiji ...... FJ Macedonia ...... MK Bahrain ...... BA Finland ...... FI Madagascar (Malagasy Republic) MA Baker Island ...... FQ France ...... FR Malawi ...... MI Bangladesh ...... BG French Guiana ...... FG Malaysia ...... MY Barbados ...... BB French Polynesia (Tahiti) ...... FP Maldives ...... MV Bassas da India ...... BS French Southern and Antarctic Mali ...... ML Belarus ...... BO Lands ...... FS Malta ...... MT Belgium ...... BE Gabon ...... GB Marshall Islands ...... RM Belize ...... BH Gambia ...... GA Martinique ...... MB Benin (Dahomey) ...... BN Gaza Strip ...... GZ Mauritania ...... MR Bermuda ...... BD Georgia ...... GG Mauritius ...... MP Bhutan ...... BT Germany ...... GM Mayotte ...... MF Bolivia ...... BL Ghana ...... GH Mexico ...... MX Bosnia-Herzegovina ...... BK Gibraltar ...... GI Micronesia, Federated States of . . FM Botswana ...... BC Glorioso Islands ...... GO Midway Islands ...... MQ Bouvet Island ...... BV Greece ...... GR Moldova ...... MD Brazil ...... BR Greenland ...... GL Monaco ...... MN British Indian Ocean Territory .... IO Grenada (Southern Grenadines) .. GJ Mongolia ...... MG British Virgin Islands ...... VI Grenadines ...... VC Montenegro ...... MJ Brunei ...... BX Guadeloupe ...... GP Montserrat ...... MH Bulgaria ...... BU Guam ...... GQ Morocco ...... MO Burkina Faso (Upper Volta) ...... UV Guatemala ...... GT Mozambique ...... MZ Burma ...... BM Guernsey ...... GK Myanmar ...... XM Burundi ...... BY Guinea ...... GV Namibia ...... WA Cambodia (Kampuchea) ...... CB Guinea-Bissau ...... PU Nauru ...... NR Cameroon ...... CM Guyana ...... GY Navassa Island ...... BQ Canada ...... CA Haiti ...... HA Nepal ...... NP Canary Islands ...... XY Heard Island and McDonald Islands HM Netherlands ...... NL Cape Verde ...... CV Honduras ...... HO Netherlands Antilles ...... NT Cayman Islands ...... CJ Hong Kong ...... HK New Caledonia ...... NC Central African Republic ...... CT Howland Island ...... HQ New Zealand ...... NZ Chad ...... CD Hungary ...... HU Nicaragua ...... NU Channel Islands ...... XC Iceland ...... IC Niger ...... NG Chile ...... CI India ...... IN Nigeria ...... NI China, People’s Republic of Indonesia (including Bali, Belitung, Niue ...... NE (including Inner Mongolia, Tibet, Flores, Java, Moluccas, Sumatra, Norfolk Island ...... NF and Manchuria) ...... CH etc.) ...... ID Northern Ireland ...... XN Christmas Island (Indian Ocean) . . KTIran ...... IR Northern Mariana Islands ...... CQ Clipperton Island ...... IP Iraq ...... IZ Norway ...... NO Cocos (Keeling) Islands ...... CK Ireland, Republic of (Eire) ...... EI Oman ...... MU Colombia ...... CO Isle of Man ...... IM Pakistan ...... PK Comoros ...... CN Israel ...... IS Palau ...... PS Congo (Brazzaville) ...... CF Italy ...... IT Palmyra Atoll ...... LQ

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Panama ...... PM Singapore ...... SN Tromelin Island ...... TE Papua New Guinea ...... PP Slovak Republic (Slovakia) ...... XR Tunisia ...... TS Paracel Islands ...... PF Slovakia ...... LO Turkey ...... TU Paraguay ...... PA Slovenia ...... SI Turkmenistan ...... TX Peru ...... PE Solomon Islands ...... BP Turks and Caicos Islands ...... TK Philippines ...... RP Somalia ...... SO Tuvalu ...... TV Pitcairn Island ...... PC South Africa ...... SF Uganda ...... UG Poland ...... PL South Georgia and the South Ukraine ...... UP Portugal ...... PO Sandwich Islands ...... SX United Arab Emirates ...... AE Puerto Rico ...... RQ Spain ...... SP United Kingdom (England, Wales, Qatar (Katar) ...... QA Spratly Islands ...... PG Scotland, No. Ireland) ...... UK Reunion ...... RE Sri Lanka ...... CE Uruguay ...... UY Romania ...... RO Sudan ...... SU Uzbekistan ...... UZ Russia ...... RS Suriname ...... NS Vanuatu ...... NH Rwanda ...... RW Svalbard (Spitsbergen) ...... SV Vatican City ...... VT St. Helena (Ascension Island and Swaziland ...... WZ Venezuela ...... VE Tristan de Cunha Island Group) . . . SH Sweden ...... SW Vietnam ...... VM St. Kitts (St. Christopher and Nevis) SC Switzerland ...... SZ Virgin Islands (U.S.) ...... VQ St. Lucia ...... ST Syria ...... SY Wake Island ...... WQ St. Pierre and Miquelon ...... SB Taiwan ...... TW Wales ...... XW St. Vincent and the Grenadines Tajikistan ...... TI Wallis and Futuna ...... WF (Northern Grenadines) ...... VC Tanzania ...... TZ West Bank ...... WE Samoa ...... WS Thailand ...... TH Western Sahara ...... WI San Marino ...... SM Timor-Leste (formerly East Timor) TT Yemen (Aden) ...... YM Sao Tome and Principe ...... TP Togo ...... TO Yugoslavia ...... YI Saudi Arabia ...... SA Tokelau ...... TL Zambia ...... ZA Scotland ...... XS Tonga ...... TN Zimbabwe ...... ZI Senegal ...... SG Trinidad and Tobago ...... TD Other countries ...... OC Serbia ...... RB Tristan Da Cunha ...... XT Seychelles ...... SE Sierra Leone ...... SL

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 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. Recordkeeping ...... 23 hr., 12 min. Learning about the law or the form ...... 6hr., 52min. Preparing and sending the form to the IRS ...... 14hr., 44 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

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