Form 5452 Corporate Report of Nondividend Distributions

5452

Form
(Rev. December 2006)

Corporate Report of Nondividend Distributions
©

Department of the Treasury
Internal Revenue Service

©

OMB No. 1545-0205

For calendar year ending December 31,
Attach to the corporation’s income tax return.

Name

Employer identification number

A Has the corporation filed a Form 5452 for a prior calendar year?

©

Yes

No

©

Yes

No

If “Yes,” enter the applicable year(s)
B Are any of the distributions part of a partial or complete liquidation?
If “Yes,” attach explanation.
C Earnings and Profits (See Supporting
Information in instructions.)

D Shareholders at Date of Last Dividend
Payment

● Number of individuals
● Number of partnerships
● Number of corporations and other
shareholders

● Accumulated earnings and profits
(since February 28, 1913) at the
© $
beginning of the tax year
● Actual earnings and profits for the
© $
current tax year

E Corporate Distributions (see instructions)
Total Amount Paid
(Common (C),
Preferred (P),
Other (O))

Date Paid

$

Totals

$

Amount Paid During Calendar Year From Earnings & Profits
Since February 28, 1913

Amount
Per
Share

$

From the
Current Year

Accumulated

Total

Percent
Taxable

Amount Paid During
Calendar Year From
Percent
Other Than Earnings
Nontaxable
& Profits Since
February 28, 1913

$

$

$

% $

$

$

$

$

For Paperwork Reduction Act Notice, see the instructions.

Cat. No. 11881T

%

Form

5452

(Rev. 12-2006)

Form 5452 (Rev. 12-2006)

Instructions
Section references are to the Internal Revenue Code.

Purpose of Form
Complete Form 5452 if the corporation made nondividend
distributions to shareholders under section 301, section
1368(c)(3), or section 1371(e).

Who Must File
All corporations that have made nondividend distributions to
their shareholders must file Form 5452. If the corporation is a
member of a consolidated group, the parent corporation
must file Form 5452.
An S corporation should file this form only for distributions
made under section 1368(c)(3). However, a corporation
making cash distributions under section 1371(e) during the
post-termination transition period from being an S
corporation should file this form.

How and When To File
A calendar tax year corporation must attach Form 5452
and the items listed under Supporting Information to its
income tax return due for the tax year in which the
nondividend distributions were made.
A fiscal tax year corporation must attach Form 5452 and
the items listed under Supporting Information to its income
tax return due for the first fiscal year ending after the
calendar year in which the nondividend distributions were
made.

Nondividend Distributions
Nondividend distributions are distributions made to
shareholders in the normal course of business.
They are considered fully or partially nontaxable as
dividends only because the paying corporation’s current and
accumulated earnings and profits are less than the
distributions. Nondividend distributions do not include
tax-free stock dividends or distributions exchanged for stock
in liquidations or redemptions.

Supporting Information
1. Attach the following information to Form 5452. See
Revenue Procedure 75-17, 1975-1 C.B. 677.
● A computation of earnings and profits for the tax year (see
the example of a filled-in worksheet on page 3 and a blank
worksheet on page 4). If the corporation was required to
complete Schedule M-1 (Form 1120) or Schedule M-3 (Form
1120) for the tax year, also attach a schedule of the
differences between the earnings and profits computation
and the Schedule M-1 or Schedule M-3.
● A year-by-year computation of the accumulated earnings
and profits, and a schedule of differences since the origin of
the company, February 28, 1913, or the last year that
information was furnished, whichever is later.
● If the corporation was required to complete Schedule L
(Form 1120) for the tax year, a tax basis balance sheet.
Show application of the net differences to the balance sheet
items as shown on Schedule L. Explain any further
adjustments necessary to figure the balance sheet on a tax

Page

2

basis. If the corporation used an accelerated method of
depreciation, attach a schedule of the depreciation (and any
amortization) figured under the straight line method. Also
attach a reconciliation of any difference between that amount
and the amount deducted on Form 1120 or other
comparable return. See Exhibits B and C in Rev. Proc.
75-17.
2. The parent of a consolidated group must also attach the
following information.
● A schedule that shows the allocation of the consolidated
tax liability and identifies the method used. (Indicate if an
intercompany agreement is in effect.)
● A schedule that shows the taxable income or loss of each
member of the consolidated group.
● For each member of a consolidated group that made
nondividend distributions, provide the information requested
in Item 1 above.

E. Corporate Distributions
Complete Part E, Corporate Distributions, showing the
taxable and nontaxable status of distributions reported to
shareholders. The percent of distributions that is taxable and
the percent that is nontaxable are based on the amounts
shown on each line in the column labeled "Total Amount
Paid." If noncash distributions were made, attach a
statement and show both the tax bases and fair market
values.
Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You are required to give us the
information. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the right
amount of tax.
You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books
or records relating to a form or its instructions must be
retained as long as their contents may become material in
the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
average time is:
Recordkeeping
28 hr., 13 min.
Learning about
the law or the form
58 min.
Preparing the form
2 hr., 24 min.
Copying, assembling, and
sending the form to the IRS
16 min.
If you have comments concerning the accuracy of these
time estimates or suggestions for making this form simpler,
we would be happy to hear from you. See the instructions
for the tax return with which this form is filed.

Form 5452 (Rev. 12-2006)

Page

3

Example of a Filled-In Worksheet for Figuring Current Year Earnings and Profits
XYZ Corporation, EIN 00-0000000
123 Main Street
Anycity, Yourstate 20200
Date Incorporated: 1/1/99
Method of Accounting: Accrual

Retained Earnings
Shown in Books

Earnings and Profits
Current Year

Debit

Debit

2
3

Credit

$225,000

Balance forward 12/31/04
2005
1

Credit

Accumulated
Earnings and
Profits
Credit
Balance

Taxable income* from Form 1120, line 28 (or
comparable line of other income tax return)
Federal income taxes per books and tax return
Excess of capital losses over capital gains (tax basis)

Depreciation adjustment on earnings and profits
(section 312(k))
5 Depreciation adjustment on sale of property
6 Total itemized expenses from line 5, Schedule M-1
a Travel and entertainment

$20,900

214,700
$60,000
3,600

Key

$214,700

a
a
a

$60,000
3,600

4

b Life insurance premium greater than cash
surrender value (CSV)
c Nondeductible interest paid for tax-exempt bonds
d Contributions carryover
e Other (list separately)
7 Total itemized income from line 7, Schedule M-1
a Life insurance proceeds greater than CSV
b Bad debt recovery (not charged against taxable
income)
c Tax-exempt interest on municipal bonds
d Other (list separately)
8 Refund of prior year Federal income taxes
9 Reserve for contingencies
10 Additional adjustments:

E
L
P
AM

24,000
4,000
11,050
$200

200

a

9,500
850
500

9,500
850
500

a
a
a

14,500
6,000

6,000

a

3,500
5,000

5,000

b
a

10,000

c

S

11 Totals
Current Year Earnings and Profits
Cash Distributions:
Preferred stock: 3/15/05, 6/15/05, 9/15/05, 12/15/05
10,000 Shares at $1.00/Share × 4 quarters = $40,000
Common stock:
1. 3/31/05 - 90,000 Shares at $1.00 = $90,000
72.81%
From current year earnings and profits
23.22%
From accumulated earnings and profits
96.03%
Total distribution from earnings and profits
3.97%
From other distribution
100%
Total distribution
2. 9/30/05 - 90,000 Shares at $1.00 = $90,000
From current year earnings and profits
From other distribution
Total distribution
Total cash distributions
Totals
Current year change
Balance forward 12/31/05

72.81%
27.19%
100%

78,650

40,000

40,000

65,525
20,900
86,425
3,575
90,000

65,525

65,525
24,475
90,000

65,525

249,700
171,050
a

(20,900)

220,000
304,650
75,450

Explanation of Key
a - Identical items on the same line.
b - Item offset in 2003. Bad debt reserve method used for book accounting.
c - Item partially offset.
* Taxable income before net operating loss deduction and special deductions.

229,200
$149,550

171,050

a
a

a

171,050
(20,900)
$—0—
Form

5452

(Rev. 12-2006)

Form 5452 (Rev. 12-2006)

Page

4

Worksheet for Figuring Current Year Earnings and Profits
Date Incorporated:
Method of Accounting:

Retained Earnings
Shown in Books

Earnings and Profits
Current Year

Debit

Debit

Credit

Credit

Accumulated
Earnings and
Profits
Credit
Balance

Key

Balance forward 12/31/
Year
1
2
3

Taxable income* from Form 1120, line 28 (or
comparable line of other income tax return)
Federal income taxes per books and tax return
Excess of capital losses over capital gains (tax basis)

4

Depreciation adjustment on earnings and profits
(section 312(k))
5 Depreciation adjustment on sale of property
6 Total itemized expenses from line 5, Schedule M-1
a Travel and entertainment
b Life insurance premium greater than cash
surrender value (CSV)
c Nondeductible interest paid for tax-exempt bonds
d Contributions carryover
e Other (list separately)
7 Total itemized income from line 7, Schedule M-1
a Life insurance proceeds greater than CSV
b Bad debt recovery (not charged against taxable
income)
c Tax-exempt interest on municipal bonds
d Other (list separately)
8 Refund of prior year Federal income taxes
9 Reserve for contingencies
10 Additional adjustments:

11 Totals
Current Year Earnings and Profits
Cash Distributions:

From current year earnings and profits
From accumulated earnings and profits
Total distribution from earnings and profits
From other distribution
Total distribution

%
%
%
%
100%

Total cash distributions
Totals
Current year change
Balance forward 12/31/

* Taxable income before net operating loss deduction and special deductions.

Printed on recycled paper

Form

5452

(Rev. 12-2006)