Demystifying the 2021 Schedule M “Transactions Between Foreign Corporations” of IRS Form 5471
By Anthony Diosdi Schedule M is designed to measure Controlled Foreign Corporation (“CFC”) intercompany payments. Schedule M requires the majority U.S. owner to provide information on transactions between the CFC and its shareholders or other related persons. This article is designed to provide a basic overview of the Internal Revenue Service (“IRS”) Form 5471, Schedule M. Who Must Complete Schedule MAnyone preparing a Form 5471 knows that the return consists of many schedules. Schedule M is just one schedule of the Form 5471. Whether or not a CFC shareholder is required to complete Schedule M depends on what category of filer he or she can be classified as. For purposes of Form 5471, CFC shareholders are broken down by the following categories:Key TermsU.S. person: A U.S. person is generally a…