Schedule M (Form 5471), Transactions Between Controlled Foreign Corporation and Shareholders or Other Related Persons, is an Internal Revenue Service (IRS) schedule that you attach to Form 5471. It totals, by type of transaction, what a controlled foreign corporation (CFC) received from and paid to the persons named in columns (b) through (f) during its annual accounting period. On this page you can fill out the schedule online on FillingPDF and download or print the completed PDF. The form and its instructions are published by the IRS at www.irs.gov/Form5471.
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What is Schedule M (Form 5471)?
Schedule M (Form 5471), Transactions Between Controlled Foreign Corporation and Shareholders or Other Related Persons, is the IRS schedule attached to Form 5471 that lists the totals of each type of transaction between a controlled foreign corporation (CFC) and the related persons named on the form.
The schedule is issued by the Internal Revenue Service under OMB No. 1545-0123 and carries the printed revision Rev. December 2021. It has two pages. Lines 1 through 15 cover amounts the foreign corporation received, such as sales of stock in trade (inventory), sales of property rights, commissions, rents, royalties, dividends and interest, with line 15 as the total. Lines 16 through 30 cover the matching purchases and payments, with line 30 as the total. Lines 31 through 34 cover accounts payable, amounts borrowed, accounts receivable and amounts loaned.
Each line is answered in six columns: (a) the transaction type, (b) the U.S. person filing the return, (c) any domestic corporation or partnership controlled by that person, (d) any other foreign corporation or partnership controlled by that person, (e) a 10% or more U.S. shareholder of the CFC other than the filer, and (f) a 10% or more U.S. shareholder of any corporation controlling the foreign corporation.
The form says to complete a separate Schedule M for each controlled foreign corporation and to state all amounts in U.S. dollars translated from functional currency at the average exchange rate for the foreign corporation's tax year. It is a schedule of Form 5471, not a stand-alone return, and it is a different document from any other schedule that happens to be lettered M.
Who needs to file Schedule M (Form 5471)?
Persons who are completing Form 5471 for a controlled foreign corporation attach Schedule M (Form 5471) to it. The top of the schedule asks for the name and identifying number of the person filing Form 5471, so the schedule is completed by that filer, not by the foreign corporation separately.
Conditions printed on the form:
- Complete a separate Schedule M for each controlled foreign corporation. A filer with more than one CFC prepares one schedule per corporation.
- Enter the name of the foreign corporation, its EIN (if any) and the Reference ID number (see instructions) for the corporation the schedule covers.
- Report only the transaction types and the persons listed in columns (b) through (f).
The form does not say who may sign for or represent a filer, and it has no signature block of its own. For questions about whether Form 5471, and with it this schedule, applies to you, see the instructions at www.irs.gov/Form5471.
When to file Schedule M (Form 5471)
Schedule M (Form 5471) is completed whenever 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 and follows the timing of that form; the IRS instructions at www.irs.gov/Form5471 govern the deadline.
The amounts cover the annual accounting period of the foreign corporation, and the exchange rate is the average rate for the foreign corporation's tax year. Gather the corporation's totals by transaction type and by related person before you start. If you report on more than one controlled foreign corporation, prepare a separate Schedule M for each at the same time.
Documents you need
- Form 5471: Schedule M (Form 5471) is attached to it, one schedule for each controlled foreign corporation.
- A statement for line 14, Other amounts received: the line says to attach a statement.
- A statement for line 29, Other amounts paid: the line says to attach a statement.
How to fill out Schedule M (Form 5471)
Enter filer and corporation details
At the top of page 1, enter the name and identifying number of the person filing Form 5471, then the name of the foreign corporation, its EIN (if any) and the Reference ID number (see instructions). Repeat the filer name and identifying number at the top of page 2.
State the currency and exchange rate
Enter the relevant functional currency and the exchange rate used throughout the schedule on the line provided. All amounts must be in U.S. dollars translated at the average exchange rate for the foreign corporation's tax year.
Understand the six columns
Column (a) names the transaction. Columns (b) through (f) are the person filing this return, domestic and other foreign corporations or partnerships it controls, and the 10% or more U.S. shareholders described in (e) and (f).
Report amounts received, lines 1 to 14
For each type of transaction on lines 1 through 14, enter the total for the annual accounting period in the column of the related person. On line 10, exclude hybrid dividends, deemed distributions under subpart F and distributions of previously taxed income.
Total amounts received on line 15
Add lines 1 through 14 for each column and enter the result on line 15. Attach a statement if you entered an amount on line 14.
Report amounts paid, lines 16 to 29
Enter the totals of purchases and payments on lines 16 through 29, by column. On line 25, exclude hybrid dividends paid, which are reported on line 24.
Total amounts paid on line 30
Add lines 16 through 29 for each column and enter the result on line 30. Attach a statement if you entered an amount on line 29.
Complete page 2 balances
On lines 31 and 33, enter accounts payable and accounts receivable. On lines 32 and 34, enter the maximum loan balance during the year for amounts borrowed and amounts loaned; see the instructions.
Prepare one schedule per corporation
If you report more than one controlled foreign corporation, complete a separate Schedule M for each, with its own header, currency and exchange rate.
Review and download the completed PDF
Check the header, currency, totals on lines 15 and 30 and any attached statements. Download or print the completed PDF from FillingPDF and attach it to Form 5471 as described under How to submit.
How to submit Schedule M (Form 5471)
Schedule M (Form 5471) is not submitted by itself: it is attached to Form 5471 and goes wherever that form is filed. The schedule prints no mailing address, portal or appointment rule of its own.
- With Form 5471: attach each completed Schedule M, one per controlled foreign corporation, to Form 5471.
- Statements: if you use line 14 or line 29, attach the statement the line calls for.
- Instructions: find the form, the instructions and the latest information at www.irs.gov/Form5471, as the schedule directs.
Check that your name and identifying number, and the foreign corporation's name, EIN (if any) and Reference ID number, appear at the top of both pages. FillingPDF lets you fill out and download the PDF; submission follows the IRS channels that apply to Form 5471.
Common mistakes to avoid
- Using one Schedule M for several controlled foreign corporations; the form says to complete a separate Schedule M for each one.
- Filing the schedule without attaching it to Form 5471.
- Entering amounts in the foreign currency instead of U.S. dollars translated at the average exchange rate for the foreign corporation's tax year.
- Leaving out the functional currency and exchange rate that the form asks you to enter and to use throughout the schedule.
- Entering the maximum loan balance during the year incorrectly: lines 32 and 34 ask for the maximum balance, not the year-end balance.
- Reporting dividends on line 10 without excluding hybrid dividends, deemed distributions under subpart F and distributions of previously taxed income.
- Entering an amount on line 14 or line 29 without attaching the required statement.
- Leaving the Reference ID number or the foreign corporation's EIN (if any) off the header.
Frequently asked questions
What is Schedule M (Form 5471)?
Schedule M (Form 5471) is the IRS schedule, attached to Form 5471, that reports totals of each type of transaction between a controlled foreign corporation and its related persons, such as the filer, controlled entities and 10% or more U.S. shareholders.
Do I file Schedule M (Form 5471) on its own?
No. The form says to attach it to Form 5471, so it is submitted with that form. It prints no separate address, portal or due date; check the instructions at www.irs.gov/Form5471 for filing details.
Do I need a separate Schedule M for each foreign corporation?
Yes. The form states that you must complete a separate Schedule M for each controlled foreign corporation. Each one has its own header, functional currency, exchange rate and totals.
What currency do I use on Schedule M (Form 5471)?
U.S. dollars. All amounts must be translated from the functional currency at the average exchange rate for the foreign corporation's tax year, and you enter the functional currency and the exchange rate used at the top of the schedule.
What do the columns (b) through (f) mean?
Column (b) is the U.S. person filing the return. (c) is any domestic corporation or partnership it controls, and (d) any other foreign corporation or partnership it controls. (e) and (f) are 10% or more U.S. shareholders of the CFC and of any corporation controlling it.
What do lines 32 and 34 ask for?
Line 32, Amounts borrowed, and line 34, Amounts loaned, ask for the maximum loan balance during the year, not the balance at year end. The schedule refers you to the instructions for both lines.
Do I attach anything to lines 14 and 29?
Yes. Line 14, Other amounts received, and line 29, Other amounts paid, each say to attach a statement. Attach it when you enter an amount on that line.
Can I fill out Schedule M (Form 5471) online?
Yes. You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not file the schedule with the IRS; you submit it with Form 5471 through the IRS channels.
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