Form 5472 related party and reportable transactions guide
How the related-party and reportable-transaction questions apply to the simple Part V lane, and why complex transactions are hard stops.
Summary
For a foreign-owned U.S. disregarded entity, the foreign owner is usually the related party in the simple supported lane. Part V asks for amounts connected with formation, dissolution, acquisition, disposition, contributions, and distributions. Form 5472 Desk supports simple owner contributions or distributions only; a no-reportable-transaction case stops before purchase, as do loans, services, rents, royalties, IP, assets, nonmonetary transfers, and transfer pricing.
Part V owner-capital activity is supported only when it stays simple and records are ready.
| Simple related party | Foreign individual owner100% direct owner in the product lane. |
|---|---|
| Supported Part V | Formation/contributions/distributionsAt least one simple owner contribution or distribution with ready records. |
| Hard stop | Part IV/VI/complex Part VUse official guidance or professional review. |
| Owner loan to the LLC | Part IV, line 17 (amounts borrowed)Beginning and ending balances, or the monthly average on line 17b. |
| Small amounts | "$50,000 or less"Allowed in Part IV when the actual amount does not exceed $50,000. |
Related party in the supported case
The IRS definition of related party is broad. The product deliberately narrows that concept to a clean fact pattern: one foreign individual directly owns 100% of the domestic single-member LLC treated as disregarded.
Part V in plain English
Part V is the foreign-owned U.S. DE section for amounts paid or received in connection with formation, dissolution, acquisition, disposition, contributions, and distributions. The product can organize simple owner capital amounts when the records are ready.
Where each owner transaction goes
Checked against the Instructions for Form 5472 (Rev. December 2024) on October 28, 2026.
| Transaction | Form 5472 part and line | In the Form 5472 Desk packet? |
|---|---|---|
| Owner puts money into the LLC (contribution) | Part V, attached statement; counted in line 1f | Yes, when records are ready |
| LLC pays money to the owner (distribution) | Part V, attached statement; counted in line 1f | Yes, when records are ready |
| Owner lends money to the LLC | Part IV, line 17 (amounts borrowed); interest on line 32 | No: hard stop |
| LLC lends money to the owner | Part IV, line 31 (amounts loaned) | No: hard stop |
| Services, rents or royalties with the owner | Part IV | No: hard stop |
| Property transferred without full payment | Part VI, attached schedule | No: hard stop |
| Cost sharing arrangement | Part VIII, line 44; count on line 1k | No: hard stop |
Part IV amounts may be reported as "$50,000 or less" when the actual amount does not exceed $50,000.
Transactions that stop the workflow
Stop for sales, services, commissions, rents, royalties, premiums, insurance, loans, interest, IP, asset transfers, debt instruments, cost-sharing arrangements, nonmonetary transfers, less-than-full-consideration transactions, or any section 482 transfer-pricing analysis.
What this tool prepares
Form 5472 Desk turns clean user-entered Part V facts into a self-review packet and checklist. It does not classify ambiguous transactions, value property, draft transfer-pricing support, or decide whether an unusual transfer is reportable.
Next steps
Zero-income foreign-owned LLC guide
Separate zero income from owner capital activity before preparing a packet.
Filing requirements guide
Review who must file before treating a transaction as a supported packet input.
$25,000 penalty guide
See why incomplete or unsupported transaction facts should stop before checkout.
Common questions
What is a related party for Form 5472?
The IRS instructions define related party broadly. In the supported Form 5472 Desk lane, the related-party fact is narrowed to the foreign individual who directly owns 100% of the U.S. single-member LLC.
What Part V transactions does Form 5472 Desk support?
At least one simple owner contribution or distribution with ready records. A no-reportable-transaction case and other reportable transactions, nonmonetary transfers, loans, services, rents, royalties, IP, asset transfers, cost sharing, and transfer-pricing questions are outside scope.
Where do capital contributions go on Form 5472?
For a foreign-owned U.S. DE, in Part V: check the box and describe the contributions (and distributions) on an attached statement. The instructions for line 1f add Part V amounts to the total for a foreign-owned U.S. DE.
Where do amounts borrowed from the foreign owner go?
In Part IV, line 17 (amounts borrowed), using either the outstanding balance method (beginning balance on 17a, ending balance on 17b) or the monthly average method (17b only). Interest paid goes on line 32. A loan takes the case out of the Form 5472 Desk packet.
Can I write "$50,000 or less" instead of the exact amount?
In Part IV, yes: the instructions allow "$50,000 or less" when the actual amount of a transaction or series of transactions with the foreign related party does not exceed $50,000, and reasonable estimates within 75% to 125% of the actual amount.
What about a cost sharing arrangement?
Part VIII, line 44: a short description of the arrangement, the industry and the intangibles involved, one Part VIII per arrangement, counted on line 1k. Outside the product.
Does Form 5472 Desk file with the IRS?
No. It prepares a self-review packet and checklist. The user reviews, signs where required, and files through the official IRS mail or fax path.
Does this product provide tax advice?
No. It is self-help software for a narrow packet-preparation lane. Treaty positions, ECI analysis, transfer pricing, reasonable cause, notices, and representation are outside scope.
Run the strict Form 5472 checker
Check whether the facts fit the foreign individual, 100% single-member LLC, disregarded entity, current on-time packet lane before preparing anything.
Open checkerRelated guides
Form 5472 no reportable transactions for a foreign-owned LLC
A cautious guide to the no-reportable-transactions exception for foreign-owned U.S. disregarded entities and the product boundary.
Foreign-owned LLC Form 5472 filing guide
A narrow source-linked guide for foreign-owned single-member LLC owners checking the Form 5472 plus pro forma Form 1120 filing lane.
Foreign-owned disregarded entity Form 5472 guide
A plain-English guide to the IRS foreign-owned U.S. disregarded entity term for Form 5472 packets.
Official sources for this guide
Last reviewed: .