5471 Sch. M

Transactions Between Controlled Foreign Corporation and Shareholders or Other Related Persons

Agency
IRS
Revision
Rev. December 2021
Fillable fields
178
Pages
2
Official source
IRS form page
Checked
October 21, 2026
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Page 1 of form 5471 Sch. M

Schedule M (Form 5471): Transactions Between CFC and Shareholders or Other Related Persons

Schedule M (Form 5471) reports transactions between a controlled foreign corporation and shareholders or other related persons. The Instructions for Form 5471 say every U.S. person described in Category 4 files it to report the transactions that occurred during the foreign corporation's annual accounting period ending with or within the U.S. person's tax year.

The schedule says to complete a separate Schedule M for each controlled foreign corporation and to enter the totals for each type of transaction with the persons in columns (b) through (f). Lines 1 to 15 cover amounts the foreign corporation received, lines 16 to 30 cover amounts it paid, and lines 31 to 34 cover accounts payable, accounts receivable and loan balances. All amounts are stated in U.S. dollars translated at the average exchange rate for the foreign corporation's tax year.

The schedule says "Attach to Form 5471." You can fill out Schedule M (Form 5471) free in your browser on this page and download it without an account.

What's on Schedule M (Form 5471)

Heading

Name and identifying number of the person filing Form 5471, name of the foreign corporation, its EIN if any, its reference ID number, and the functional currency and exchange rate used.

Columns (b) to (f)

The U.S. person filing the return, domestic and other foreign corporations or partnerships it controls, and 10% or more U.S. shareholders of the controlled foreign corporation or of a corporation controlling it.

Lines 1 to 15: amounts received

Sales of inventory, tangible property and property rights, platform contribution and cost sharing payments, services, commissions, rents and royalties, hybrid dividends, dividends, interest, premiums, loan guarantee fees and other amounts, totaled on line 15.

Lines 16 to 30: amounts paid

The same types of transactions as purchases and payments by the foreign corporation, totaled on line 30.

Lines 31 to 34: balances

Accounts payable, amounts borrowed, accounts receivable and amounts loaned, on page 2. Lines 32 and 34 ask for the maximum loan balance during the year.

How to fill out Schedule M (Form 5471)

  1. 1

    Heading

    Enter the filer and foreign corporation details. The instructions say to use the reference ID number shown on Form 5471, page 1, item 1b(2), and, for a consolidated return, the name of the U.S. parent.

  2. 2

    Currency and exchange rate

    Translate amounts at the average exchange rate for the foreign corporation's tax year. The instructions say to report the rate using the divide-by convention, rounded to at least four places.

  3. 3

    Lines 1 to 15

    Enter the totals received from each related person in its column. The instructions say lines 4 and 5 are reported without netting payments, and line 5 is completed only if the corporation itself incurred intangible development costs.

  4. 4

    Lines 16 to 30

    Enter the totals paid to each related person. Line 24 is for hybrid dividends or tiered hybrid dividends paid, and line 30 adds lines 16 through 29.

  5. 5

    Lines 14 and 29 statements

    If an amount is entered on line 14 or 29, the instructions say to attach a statement describing the other amounts by column, with a totals line that ties to that line.

  6. 6

    Lines 31 to 34

    Enter the largest outstanding balances during the year. The instructions say not to enter aggregate cash flows, year-end loan balances, average balances or net balances on lines 32 and 34.

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How it is filed, timing and penalties

Attached to Form 5471

The schedule says to attach it to Form 5471. The instructions say Form 5471 is attached to the income tax return, or partnership or exempt organization return, and filed by its due date, including extensions.

One per controlled foreign corporation

The schedule says to complete a separate Schedule M for each controlled foreign corporation.

Zero amounts

The instructions say that when a schedule is required but all amounts are zero, it is still filed with one or more zero amounts.

Accrual method

The instructions say a corporation using an accrual method uses accrued payments and accrued receipts to compute each line of Schedule M.

Penalties

The instructions list a $10,000 penalty for each annual accounting period of each foreign corporation for failure to furnish the section 6038(a) information on time, with further penalties after IRS notice.

Related forms

Who files Schedule M (Form 5471)?

  • Category 4 filers

    The instructions say Category 4 includes a U.S. person who had control of a foreign corporation during the foreign corporation's annual accounting period.

  • What control means

    The instructions say control is owning stock with more than 50% of the total combined voting power, or more than 50% of the total value of shares, at any time during the person's tax year.

  • Individuals, partnerships, corporations, estates and trusts

    For Category 4, the instructions list citizens and residents, certain electing nonresident aliens, domestic partnerships, domestic corporations, and estates or trusts that are not foreign.

  • Consolidated groups

    If a U.S. corporation that owns the stock is a member of a consolidated group, the instructions say to list the common parent as the U.S. person filing Schedule M.

  • Certain constructive owners

    The instructions describe exceptions for a Category 4 filer that owns no direct interest and is required to report only because of constructive ownership, when the conditions they list are met.

The U.S. person who files Form 5471 as a Category 4 filer completes Schedule M and attaches it to that Form 5471, which goes with the filer's own return.

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Questions about Form 5471 Sch. M

Who has to file Schedule M (Form 5471)?

The instructions say every U.S. person described in Category 4, a U.S. person who had control of the foreign corporation during its annual accounting period.

Is a separate Schedule M needed for each foreign corporation?

Yes. The schedule says to complete a separate Schedule M for each controlled foreign corporation.

Which exchange rate is used?

The schedule says amounts are translated from functional currency at the average exchange rate for the foreign corporation's tax year, and the rate is entered at the top.

What goes on lines 32 and 34?

The largest outstanding balances during the year of gross amounts borrowed from and loaned to the related persons in columns (b) through (f), not year-end or average balances.

Is Schedule M filed by itself?

No. It is attached to Form 5471, which is attached to the filer's income tax return or partnership or exempt organization return.

What if all amounts are zero?

The instructions say a required schedule is still filed with one or more zero amounts.