Schedule H (Form 5471), Current Earnings and Profits

Schedule H (Form 5471), Current Earnings and Profits, is the IRS schedule attached to Form 5471 that works out a foreign corporation's current earnings and profits, starting from its book income and ending with the amount in U.S. dollars.

The schedule runs in a fixed order. Line 1 takes the current year net income or (loss) per the foreign books of account. Line 2 lists adjustments, each with a Net Additions and a Net Subtractions column: capital gains or losses, depreciation and amortization, depletion, investment or incentive allowance, charges to statutory reserves, inventory adjustments, income taxes, foreign currency gains or losses, and other items (attach statement). Lines 3 and 4 total the additions and subtractions, and line 5a is line 1 plus line 3 minus line 4.

Line 5b adds the DASTM gain or (loss) for foreign corporations that use DASTM. Line 5c combines lines 5a and 5b and splits the result by category of income: general category, passive category and the section 901(j) category, which is reported by sanctioned country code. Line 5d translates line 5c into U.S. dollars at the average exchange rate defined in section 989(b)(3), and line 5e records the rate used.

The form is identified as OMB No. 1545-0123, Rev. December 2021. It is not filed on its own: it says to attach it to Form 5471. It is not the Schedule H that belongs to other IRS forms; this one is a schedule of Form 5471 only.

The person who files Form 5471 attaches Schedule H (Form 5471) to it. The form's first entry is the name of the person filing Form 5471, followed by that person's identifying number, so the schedule is completed for one foreign corporation at a time: its name, its EIN (if any) and a Reference ID number (see the IRS instructions) are entered below.

Use this schedule when you are completing Form 5471 and need to report the foreign corporation's current earnings and profits. Lines 1 through 5c must be entered in the corporation's functional currency; only line 5d is in U.S. dollars.

The schedule ties into others: line 2g refers to Schedule E, and the amounts on lines 5c(i), 5c(ii) and 5c(iii)(A) through 5c(iii)(D) are carried to the applicable Schedule J, Part I, line 3, column (a). The form does not say who may sign for someone else or who is exempt; for eligibility questions, see the IRS instructions at www.irs.gov/Form5471.

Schedule H (Form 5471) is completed when you complete Form 5471, because the form says to attach it to Form 5471. No separate due date is printed on the schedule, so it travels with Form 5471 whenever that form is filed. For any deadline or extension that applies to Form 5471, check the IRS instructions at www.irs.gov/Form5471.

Have the foreign corporation's books of account for the current year ready before you start, because line 1 begins from the net income or (loss) shown there. You will also need the average exchange rate for line 5d and the figures from Schedule E that line 2g refers to.

Schedule H (Form 5471) is submitted as an attachment to Form 5471; it has no filing channel, address or portal of its own printed on it.

• With Form 5471: attach the completed schedule, together with the statement required by line 2i if you use that line, to Form 5471.
• Same channel as Form 5471: send the package the way you file Form 5471. The schedule gives no mailing address or appointment rule.
• Instructions: the form directs you to www.irs.gov/Form5471 for instructions and the latest information.

Before sending, check that the name of the person filing Form 5471 and the identifying number appear at the top. FillingPDF lets you fill out and download the PDF; submission follows the IRS channels that apply to Form 5471.