8858 Instructions for Form 8858

Instructions for Form 8858

Department of the Treasury
Internal Revenue Service

(Rev. September 2021)

Information Return of U.S. Persons
With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs)
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments

For the latest information about
developments related to Form 8858,
Schedule M (Form 8858), and their
instructions, such as legislation enacted
after they were published, go to
IRS.gov/Form8858.

What's New
Schedule G, line 8. Line 8 on
Schedule G has been renumbered to
line 6. Old lines 6a through 7c are
renumbered to lines 7a through 8c,
respectively.
Schedule G, lines 7a through 8c. We
have added a statement above line 7a
asking for filers to complete lines 7 and
8, if they are not individuals who own an
FDE (foreign disregarded entity) or FB
(foreign branch) directly through tiers of
FDEs and FBs.
Changes to Schedule J. For
convenience of entering separate
information in each column, we have
split partial information from column (a)
and added a new column (b) to disclose
“Foreign Tax Year” and renumbered
columns (b) through (h) as columns (c)
through (i), respectively.
Two new lines added to Schedule M
(Form 8858). We have added lines 9
and 18 to Schedule M (Form 8858) to
disclose information about loan
guarantee fees received and loan
guarantee fees paid, respectively.

Reminders
COVID-19 emergency. Due to the
COVID-19 emergency, you may not be
required to take certain activities into
consideration that would otherwise
require the creation of an FB separate
unit for purposes of the dual
consolidated loss rules under section
1503(d), or require you to file Form
8858. For more information, see Rev.
Proc. 2020-30, available at IRS.gov/irb/
2020-22_IRB#REV-PROC-2020-30.
Initial or final checkboxes. We have
provided additional clarification for when
to check these boxes. See Initial or Final
8858 under Specific Instructions, later.
Sep 27, 2021

Functional currency. Filers of Form
8858 are now required to enter a
three-letter ISO 4217 “Alphabet Code”
on lines 1i, 2e, and 4d. For more
information, see the instructions for
line 1i, later.
Schedule C-1. We have made the
following changes to Schedule C-1.
• Boxes 2a and 3a have been grayed
out, because information on lines 2 and
3 applies only to the recipients of the
remittances (column (b)) and not the
FDE or FB (column (a)). See the
instructions for clarification.
• On line 3, the regulations citation has
been changed from 1.987-12T to
1.987-12 to reflect the publication of the
final section 1.987-12 regulation.

General Instructions
Purpose of Form

Form 8858 is used by certain U.S.
persons that operate an FB (foreign
branch) or own an FDE (foreign
disregarded entity) directly or, in certain
circumstances, indirectly or
constructively. See U.S. Person Filing
Form 8858, later. The form and
schedules are used to satisfy the
reporting requirements of sections
6011, 6012, 6031, and 6038, and
related regulations.

Who Must File

The following U.S. persons that are tax
owners of FDEs, operate an FB, or that
own certain interests in tax owners of
FDEs or FBs must file Form 8858 and
Schedule M (Form 8858).
1. A U.S. person that is a tax owner
of an FDE or operates an FB at any time
during the U.S. person's tax year or
annual accounting period. Complete the
entire Form 8858, including the
separate Schedule M (Form 8858),
Transactions Between Foreign
Disregarded Entity (FDE) or Foreign
Branch (FB) and the Filer or Other
Related Entities.
2. A U.S. person that directly (or
indirectly through a tier of FDEs or
partnerships) is a tax owner of an FDE
or operates an FB. Complete the entire
Form 8858, including the separate
Schedule M (Form 8858).
Cat. No. 38123Q

3. Certain U.S. persons that are
required to file Form 5471 with respect
to a controlled foreign corporation
(CFC) that is a tax owner of an FDE or
operates an FB at any time during the
CFC's annual accounting period.
Category 4 filers of Form 5471.
Complete the entire Form 8858 and the
separate Schedule M (Form 8858).
Category 5 filers of Form 5471.
Complete only the identifying
information on page 1 of Form 8858 (for
example, everything before Schedule C)
and Schedules G, H, and J. Do not
complete the separate Schedule M
(Form 8858).
4. Certain U.S. persons that are
required to file Form 8865 with respect
to a controlled foreign partnership (CFP)
that is a tax owner of an FDE or
operates an FB at any time during the
CFP's annual accounting period. If the
U.S. person required to file by operation
of this rule is a U.S. individual, the U.S.
person is not required to complete lines
10 through 13 of Schedule G. If the U.S.
person is not an individual, the U.S.
person is required to report its
distributive share of the items on lines
10 through 13 of Schedule G.
Category 1 filers of Form 8865.
Complete the entire Form 8858 and the
separate Schedule M (Form 8858).
Category 2 filers of Form 8865.
Complete only the identifying
information on page 1 of Form 8858 (for
example, everything above Schedule C)
and Schedules G, H, J, and the
separate Schedule M (Form 8858). You
are not required to complete Form 8858
if there is a Category 1 filer of Form
8865 that completes the entire Form
8858 and separate Schedule M (Form
8858) with respect to the FDE or FB.
5. A U.S. partnership that directly
(or indirectly through a tier of FDEs or
partnerships) is a tax owner of an FDE
or operates an FB. Lines 10 and 11 of
Schedule G should be completed as if
the U.S. partnership filing the Form
8858 were a U.S. corporation. A U.S.
partnership is not required to complete
lines 10 and 11 of Schedule G if all
partners are individuals, regulated
investment companies (RICs), real

estate investment trusts (REITs), and/or
S corporations.
6. A U.S. corporation (other than a
RIC, a REIT, or an S corporation) that is
a partner in a U.S. partnership, which is
required to file a Form 8858 because
the U.S. partnership is the tax owner of
an FDE or an FB. Even though the U.S.
corporation is not the tax owner of the
FDE and/or the FB, the U.S. corporation
must complete the entire Form 8858,
including lines 1 and 2 of the identifying
information section and report its
distributive share of the items on lines
10 through 13 of Schedule G for each
FDE and FB of the U.S. partnership.
The U.S. partnership must furnish all
information necessary to the U.S.
corporate partner for the partner to
complete the entire Form 8858.
Note. Complete a separate Form 8858
and all applicable schedules for each
FDE or FB.

Exceptions To Filing Form
8858
Multiple filers of the same information. In the case of Category 4 or 5
filers of Form 5471 or Category 1 filers
of Form 8865 who are also required to
file Form 8858, one person may file
Form 8858 and Schedule M (Form
8858), if applicable, for other persons
who have the same filing requirements
with respect to both Form 8858 and
Form 5471 or Form 8865. If you and one
or more other persons are required to
furnish information for the same FDE or
indirect FB for the same period, this
information may be included with or
attached to, and filed in the same
manner as, the multiple filer information
provided with respect to the CFC or the
CFP. See Multiple filers of same
information in the Form 5471
instructions or Multiple Category 1 filers
in the Form 8865 instructions.

When and Where To File

Form 8858 is due when your income tax
return or information return is due,
including extensions. If you are the tax
owner of the FDE or operate an FB,
attach Form 8858 and the separate
Schedule M (Form 8858), if required, to
your income tax return or information
return. If you are not the tax owner of the
FDE or indirect FB, attach Form 8858 to
any Form 5471 or Form 8865 you are
filing with respect to the CFC or the CFP
that is the tax owner of the FDE or
operates the FB.

Definitions

IRS.gov/irb/2009-39_IRB#RP-2009-41,
for more information.

U.S. Person

A U.S. person is:
• A citizen or resident alien of the
United States (see Pub. 519 for
guidance on determining resident alien
status),
• A domestic partnership,
• A domestic corporation,
• Any estate (other than a foreign
estate, within the meaning of section
7701(a)(31)(A)), and
• Any domestic trust.
A domestic trust is any trust if:
1. A court within the United States is
able to exercise primary supervision
over the administration of the trust, and
2. One or more U.S. persons have
the authority to control all substantial
decisions of the trust.

U.S. Person Filing Form 8858
The U.S. person filing Form 8858 is any
U.S. person that:
• Is the tax owner of an FDE,
• Owns a specified interest in an FDE
indirectly or constructively through a
CFC or a CFP (see items 2 and 3 under
Who Must File, earlier, for more detailed
information), or
• Operates (directly or indirectly
through a tier of FDEs or partnerships)
an FB.
Throughout these instructions, when
the pronouns “you” and “your” are used,
they are used in reference to the U.S.
person filing Form 8858.

Foreign Disregarded Entity
(FDE)

An FDE is an entity that is not created or
organized in the United States and that
is disregarded as an entity separate
from its owner for U.S. income tax
purposes under Regulations sections
301.7701-2 and 301.7701-3. See the
instructions for Form 8832 for more
information.
An eligible entity uses Form 8832 to
elect how it will be classified for federal
tax purposes. A copy of Form 8832 is
attached to the entity's federal tax return
for the tax year of the election; however,
special rules apply if the entity is not
required to file a tax return. For more
information, see Where To File in the
instructions for Form 8832.
Note. Rules, effective September 28,
2009, allow an eligible entity to request
a late entity classification election. See
Rev. Proc. 2009-41, available at
-2-

Tax Owner of FDE

The tax owner of the FDE is the person
that is treated as owning the assets and
liabilities of the FDE for purposes of
U.S. income tax law.

Direct Owner of FDE

The direct owner of an FDE is the legal
owner of the disregarded entity.
For example, assume A, a U.S.
individual, is a 60% partner of a CFP.
FDE 1 is a foreign disregarded entity
owned by a CFP, and FDE 2 is a foreign
disregarded entity owned by FDE 1. In
this example, FDE 1 is the direct owner
of FDE 2, and controlled foreign
partnership is the direct owner of FDE 1.
Controlled foreign partnership is the tax
owner with respect to both FDE 1 and
FDE 2. A would be required to file the
Forms 8858 relating to FDE 1 and FDE
2 with the Form 8865 it files with respect
to CFP.

Foreign Branch (FB)

An FB is defined in Regulations section
1.367(a)-6T(g). For purposes of filing a
Form 8858, an FB also includes a
qualified business unit (QBU) (as
defined in Regulations section
1.989(a)-1(b)(2)(ii)) that is foreign.

Example. Assume A, a domestic
corporation, operates a foreign branch,
FB1, in country X and is the tax owner of
a foreign disregarded entity, FDE1, in
country Y that also operates a foreign
branch, FB2, in country Z. In addition, A
is the sole owner of controlled foreign
corporation that operates a foreign
branch, FB3, in country Z. FB1, FB2,
and FB3 qualify as foreign branches
under Regulations section
1.367(a)-6T(g).
A is the direct owner of the activities
of FB1 and FDE1, and an indirect owner
of the activities of FB2, through its
ownership of FDE1.
A would be required to file separate
Forms 8858 relating to FB1, FDE1, and
FB2, its indirect foreign branch through
its ownership of FDE1. Unless indicated
otherwise on the Form 8858 or in the
instructions, the Form 8858 filed relating
to FDE1 would include only items
attributable to FDE1 and therefore
would not include any items attributable
to FB2. Similarly, unless indicated
otherwise, the Form 8858 filed for FB2
would include only items attributable to
FB2 and not to FDE1.
Controlled foreign corporation is the
direct owner of the activities of FB3.
Instructions for Form 8858 (Rev. 09-2021)

Also, controlled foreign corporation is
the tax owner with respect to the foreign
branch activities of FB3. A would be
required to file the Form 8858 relating to
FB3 with the Form 5471 it files with
respect to controlled foreign
corporation. The Form 5471 for
controlled foreign corporation would
include any income or loss incurred by
FB3.
Accounting books and records. The
existence of a separate set of books
and records, or lack thereof, may affect
the determination of whether a trade or
business activity qualifies as an FB that
is required to file Form 8858. For more
information, see Regulations sections
1.989(a)-1(d) and 1.367(a)-6T(g)(1).

Penalties
Failure to file information required
by section 6038(a) (Form 8858 and
Schedule M (Form 8858)).
• A $10,000 penalty is imposed for
each annual accounting period of each
CFC or CFP for failure to furnish the
required information within the time
prescribed. If the information is not filed
within 90 days after the IRS has mailed
a notice of the failure to the U.S. person,
an additional $10,000 penalty (per CFC
or CFP) is charged for each 30-day
period, or fraction thereof, during which
the failure continues after the 90-day
period has expired. The additional
penalty is limited to a maximum of
$50,000 for each failure.
• Any person who fails to file or report
all of the information required within the
time prescribed will be subject to a
reduction of 10% of the foreign taxes
available for credit under sections 901
and 960. If the failure continues 90 days
or more after the date the IRS mails
notice of the failure to the U.S. person,
an additional 5% reduction is made for
each 3-month period, or fraction thereof,
during which the failure continues after
the 90-day period has expired. See
section 6038(c)(2) for limits on the
amount of this penalty.
Criminal penalties. Criminal penalties
under sections 7203, 7206, and 7207
may apply for failure to file the
information required by section 6038.
Note. Any person required to file Form
8858 and Schedule M (Form 8858) who
agrees to have another person file the
form and schedules for him or her may
be subject to the above penalties if the
other person does not file a correct and
proper form and schedule.

Instructions for Form 8858 (Rev. 09-2021)

Other Reporting
Requirements
Reporting Exchange Rates on
Form 8858

When translating amounts from
functional currency to U.S. dollars, you
must use the method specified in these
instructions. But, regardless of the
specific method required, all exchange
rates must be reported using a
“divide-by convention” rounded to at
least 4 places. That is, the exchange
rate must be reported in terms of the
amount by which the functional currency
amount must be divided in order to
reflect an equivalent amount of U.S.
dollars. As such, the exchange rate
must be reported as the units of foreign
currency that equal 1 U.S. dollar,
rounded to at least 4 places. Do not
report the exchange rate as the number
of U.S. dollars that equal 1 unit of
foreign currency.
Note. You must round the result to
more than 4 places, if failure to do so
would materially distort the exchange
rate or the equivalent amount of U.S.
dollars.
Example. During its annual
accounting period, an FDE owned by a
U.S. person had current income of
30,255,400 Yen on Schedule H, line 6.
The Schedule H, line 7, instructions
specify that the filer must translate these
amounts into U.S. dollars at the average
exchange rate for the tax year in
accordance with the rules of section
989(b).
The average exchange rate is
105.7846 Japanese Yen to 1 U.S. dollar
(0.00945317 U.S. dollars to 1 Japanese
Yen). Divide 30,255,400 Yen by
105.7846 to determine the U.S. dollar
amount to enter on line 7 of Schedule H.
Enter 105.7846 on line 8.

Electronic Filing of Form 8858
If you file your income tax return
electronically, see the instructions for
your income tax return for general
information about electronic filing.

Note. If you are filing Form 1120 or
1065 electronically, you must attach
Form 8858 electronically (as an
attachment to your electronically filed
Form 1120, Form 1065, Form 5471, or
Form 8865). If you are filing Form 1040,
Form 1040-SR, or Form 1041
electronically (with or without a Form
5471 or Form 8865), attach Form 8858
to the applicable Form 8453.

-3-

Computer-Generated Form
8858 and Schedules

A computer-generated Form 8858 and
its schedules may be filed if they
conform to and do not deviate from the
official form and schedules. Generally,
all computer-generated forms must
receive prior approval from the IRS and
are subject to an annual review.
Submit all requests for approval to:
Internal Revenue Service
Attn: Substitute Forms Program
SE:W:CAR:MP:P:TP
1111 Constitution Avenue NW
Room 6554
Washington, DC 20224
Important: Be sure to attach the
approval letter to Form 8858.
Every year, the IRS issues a revenue
procedure to provide guidance for filers
of computer-generated forms. In
addition, every year, the IRS issues
Pub. 1167, General Rules and
Specifications for Substitute Forms and
Schedules, which reprints the most
recent applicable revenue procedure.
Pub. 1167 is available at IRS.gov/
Pub1167, or can be ordered by calling
800-TAX-FORM (800-829-3676).

Dormant FDEs

Announcement 2004-4, 2004-4 I.R.B.
357, available at IRS.gov/irb/
2004-04_IRB#2004-4, provides for a
summary filing procedure for filing Form
8858 for a dormant FDE. A dormant
FDE would be a dormant controlled
foreign corporation if it were treated as a
foreign corporation for U.S. tax
purposes.

If you elect the summary procedure,
complete only the identifying information
before Schedule C on page 1 of Form
8858 for each dormant FDE as follows.
• The top margin of the summary return
must be labeled “Filed Pursuant to
Announcement 2004-4 for Dormant
FDE.”
• Include the name, address,
identifying number, and tax year of the
U.S. person filing Form 8858 (see U.S.
Person, earlier).
• Include the annual accounting period
of the dormant FDE (below the title of
the form) and complete lines 1a through
1e, and 1g.
• Complete lines 3a through 3d, if
applicable.
• Complete lines 4a through 4c, if
applicable.
File this summary return in the
manner described in When and Where
To File, earlier.

Specific Instructions

and the U.S. person has a P.O. box,
show the box number instead.

Important: If the information required
in a given section exceeds the space
provided within that section, do not write
“see attached” in the section and then
attach all of the information on
additional sheets. Instead, complete all
entry spaces in the section and attach
the remaining information on additional
sheets. The additional sheets must
conform with the IRS version of that
section.

Foreign addresses. Enter the
information in the following order: city,
province or state, and country. Follow
the country's practice for entering the
postal code, if any. Do not abbreviate
the country name. However, if you are
filing Form 8858 electronically, enter a
valid country code (from the list at
IRS.gov/CountryCodes) instead of the
country name.

Identifying Information

Only one of these boxes can be
checked on each Form 8858 filed. For
example, if an FDE is formed or bought,
and terminated or sold, within the same
tax year (even if it was on the same
day), you are required to file a separate
Form 8858 for each event.

Annual Accounting Period

Enter, in the space provided below the
title of Form 8858, the annual
accounting period of the FDE or FB for
which you are furnishing information.
The annual accounting period of an
FDE or FB is the annual accounting
period or tax year of the tax owner.
Therefore, in the case of a U.S. tax
owner, the annual accounting period of
the FDE or FB is the tax year of the U.S.
tax owner; and in the case of a CFC or
CFP that is a tax owner, the annual
accounting period of the FDE or FB is
the annual accounting period of the
CFC or CFP.

Person Filing This Return

In the spaces provided at the top of
page 1 of Form 8858, provide the
identifying information for the U.S.
person filing Form 8858 (see U.S.
Person, earlier).
If a U.S. corporation is the U.S.
person filing Form 8858 and is a
member of a consolidated group, list the
common parent as the person filing the
return and enter its identifying
information in the spaces provided at
the top of page 1 of the form.

Name Change

If the name of the person filing the
return, the tax owner, the direct owner,
the FB, or the FDE whose activities are
being reported changed within the past
3 years, show the prior name(s) in
parentheses after the current name.

Addresses

Use the following instructions to
complete lines 1a, 2a, 2b, 3a, and 4a,
and the entry spaces at the top of
page 1 of the form for the filer's address.
U.S. addresses. Include the suite,
room, or other unit number after the
street address. If the Post Office does
not deliver mail to the street address

Initial Form or Final Form 8858

On one Form 8858, you would check
the Initial 8858 checkbox to reflect the
formation or purchase of the FDE, and
complete the rest of the form. On the
other Form 8858 you would check the
Final 8858 checkbox to reflect the
termination or sale of the FDE, and
complete the rest of the form.

Identifying Numbers

Use the following instructions to
complete lines 1b(1), 3c(1), and 4c, and
the entry space at the top of page 1 of
the form for the filer's identifying
number. The identifying number of an
individual is his or her social security
number (SSN). The identifying number
of all others is their employer
identification number (EIN).
If a U.S. corporation is the U.S.
person filing Form 8858 and is a
member of a consolidated group, see
Person Filing This Return, earlier.

Line 1b(1)—U.S. identifying number.
Generally, you must enter an EIN on
line 1b(1). If you don’t have an EIN
when you file Form 8858, you must
enter a reference ID number on
line 1b(2).
Foreign disregarded entity (FDE).
An EIN is required for an FDE to file
Form 8832 to elect to be treated as an
FDE. The new EIN must be included on
the Form 8858 filed by the FDE for the
first year in which it elects to be treated
as an FDE, and the old reference ID
number must be entered on line 1b(2).
In subsequent years, the FDE must
enter the EIN on line 1b(1) of the Form
8858, but entering the old reference ID
number on line 1b(2) is optional.
Foreign branch (FB). An FB does
not file Form 8832 and thus may not be
-4-

required to have an EIN. In that case,
the FB must enter a reference ID
number on line 1b(2).
Note. Do not enter an SSN on
line 1b(1) or 1b(2).
Line 1b(2)—Reference ID number. A
reference ID number (defined below) is
required on line 1b(2) only in cases
where no EIN was entered on line 1b(1)
for the FDE or FB. However, filers are
permitted to enter both an EIN on
line 1b(1) and a reference ID number on
line 1b(2). If applicable, enter the
reference ID number you have assigned
to the FDE or FB identified on line 1a.
A "reference ID number" is a number
established by the U.S. person
identified at the top of page 1 of the
Form 8858 who is responsible for
completing the Form 8858 for the FDE
or FB. The reference ID number must
meet the requirements set forth below.
Note. Because reference ID numbers
are established by or on behalf of the
U.S. person filing Form 8858, there is no
need to apply to the IRS to request a
reference ID number or for permission
to use these numbers. Reference ID
numbers must be used consistently
from year to year to identify a specific
FB or FDE.
Requirements. The reference ID
number that is entered on line 1b(2)
must be alphanumeric (defined below)
and no special characters or spaces are
permitted. The length of a given
reference ID number is limited to 50
characters.
For these purposes, the term
"alphanumeric" means the entry can be
alphabetical, numeric, or any
combination of the two.
The same reference ID number must
be used consistently from tax year to tax
year with respect to a given FDE, FB, or
tax owner. If for any reason a reference
ID number falls out of use (for example,
the FDE, FB, or tax owner no longer
exists due to disposition or liquidation),
the reference ID number used for that
FDE, FB, or tax owner cannot be used
again for another FDE, FB, or tax owner
for purposes of Form 8858 reporting.
There are some situations that
warrant correlation of a new reference
ID number with a previous reference ID
number when assigning a new
reference ID number to an FDE, FB, or
tax owner partnership. For example:
• In the case of a merger or acquisition,
a Form 8858 filer must use a reference
ID number which correlates the previous
Instructions for Form 8858 (Rev. 09-2021)

reference ID number with the new
reference ID number assigned to the
FDE, FB, or tax owner; or
• Under Regulations section
301.6109-1(b)(2)(v), a foreign entity that
makes an entity classification election
on Form 8832 to become an FDE must
have an EIN. For the first year that Form
8858 is required to be filed after an
entity classification election is made on
behalf of the foreign entity on Form
8832, the new EIN must be entered on
line 1b(1) of Form 8858 and the old
reference ID number must be entered
on line 1b(2) of Form 8858. In
subsequent years, a filer may continue
to enter both the EIN on line 1b(1) and
the reference ID number on line 1b(2),
but must enter at least the EIN on
line 1b(1).
You must correlate the reference ID
numbers as follows: New reference ID
number (space) Old reference ID
number. If there is more than one old
reference ID number, you must enter a
space between each such number. As
indicated above, the length of a given
reference ID number is limited to 50
characters and each number must be
alphanumeric and no special characters
are permitted.

Hyperinflationary exception. An
entity that would otherwise be required
to use a hyperinflationary currency as its
functional currency must use the U.S.
dollar as its functional currency and
figure income or loss or earnings and
profits using the U.S. dollar approximate
separate transactions method of
accounting (DASTM) under the special
rules of Regulations section 1.985-3.
However, if the hyperinflationary QBU is
an FDE or FB of a foreign corporation
with a non-U.S. dollar functional
currency that is not hyperinflationary,
the functional currency of the FDE or FB
is the functional currency of the foreign
corporation and such QBU applies
Regulations section 1.985-3 by
substituting the functional currency of
the foreign corporation for the U.S.
dollar. See Regulations section
1.985-1(b)(2).

Note. This correlation requirement
applies only to the first year the new
reference ID number is used.

Line 3c(1)—U.S. Identifying
Number

Line 1g—Country in Which
Principal Business Activity Is
Conducted

To complete line 3c(1), see
Line 1b(1)—U.S. identifying number,
earlier. If the tax owner does not have
an EIN when Form 8858 is filed, a
reference ID number must be entered
on line 3c(2). See the instructions for
line 3c(2), later.

Enter the two-letter country code
(from the list at IRS.gov/CountryCodes)
of the country in which the principal
business activity of the FDE or FB is
conducted.
Enter “US” if the principal business
activity of an FDE is conducted in the
United States.

Line 1h—Principal Business
Activity

Enter a brief description of the FDE’s or
FB’s principal business activity.

Line 1i—Functional Currency

Enter the entity's three-letter functional
currency code. This is an Alphabet
Code selected from ISO 4217, available
at ISO.org/iso-4217-currencycodes.html or CURRENCY-ISO.org/en/
home/tables/table-a1.html. See
sections 985 and 989, and Regulations
sections 1.985-1(a) through (c) and
1.989(a)-1(b) for rules for determining
the functional currency of a QBU and
the definition of a QBU.
Instructions for Form 8858 (Rev. 09-2021)

Line 3b

If the tax owner is a CFC, enter the
annual accounting period covered by
Form 5471 (as described in Regulations
section 1.6038-2(e)). If the tax owner is
a CFP, enter the annual accounting
period covered by Form 8865 (as
described in Regulations section
1.6038-3(f)).

Note. If the tax owner is an individual,
enter an SSN on line 3c(1) or line 3c(2).

Line 3c(2)—Reference ID
Number

A reference ID number (defined earlier,
under the instructions for line 1b(2)) is
required on line 3c(2) only in cases
where no EIN was entered on line 3c(1).
However, filers are permitted to enter
both an EIN on line 3c(1) and a
reference ID number on line 3c(2). If this
tax owner is a CFC, enter the reference
ID number for the CFC from Form 5471,
item 1b(2). If this tax owner is a CFP,
enter the reference ID number for the
CFP from Form 8865, item G2(b). See
the instructions for line 1b(2) for more
information about the requirements for
the reference ID number.
Note. If this tax owner is a CFC and
Schedule A (Form 8992) or Schedule B
-5-

(Form 8992) is required to be filed with
respect to that CFC, the reference ID
number entered on line 3c(2) must be
the same as the reference ID number
entered on Form 5471, item 1b(2), and
Schedule A (Form 8992), column (b), or
Schedule B (Form 8992), Part I, column
(b).

Line 3e
See Line 1i—Functional Currency,
earlier.

Line 4

If the FDE has more than one direct
owner, attach a statement to Form 8858
that includes the information requested
on line 4 for each additional direct
owner.

Line 4c—U.S. Identifying
Number
To complete line 4c, see
Line 1b(1)—U.S. identifying number,
earlier. If the direct owner does not have
an EIN when Form 8858 is filed, leave
this line blank.
Note. If the direct owner is an
individual, enter an SSN on line 4c.

Line 4d
See Line 1i—Functional Currency,
earlier.

Line 5

You must attach an organizational chart
that includes the following information
with respect to the chain of ownership
between the tax owner and the FDE or
FB and the chain of ownership between
the FDE or FB and all entities in which
the FDE or FB has a 10% or more direct
or indirect interest.

• The name and percentage of
ownership of all entities in the chain of
ownership, including partnerships and
entities disregarded as separate from
their owners.
• The FDE’s or FB’s position in the
chain of ownership.
• The tax classification of all entities in
the chain of ownership (see the Form
8832 instructions for tax classification
rules and related definitions).
• The country under whose law each
entity is organized.
For these purposes, the rules of
section 958(a) (relating to “direct and
indirect ownership”) apply.
Each filer of Form 8858 that is
required to file an organizational chart
with respect to more than one FDE
and/or FB may satisfy this requirement
by filing a single organizational chart

that includes the required information
with respect to all FDEs and FBs.

its owner, then such owner may be
subject to section 987.

of the CFC that had an adjustment to its
basis from the outbound loss event.

Schedule C

If an owner would be treated as
owning multiple QBUs, complete a
separate Schedule C-1 with respect to
each QBU of the owner.

Line 5

Use Schedule C to report a summary
income statement for the FDE or FB
figured in the FDE’s or FB’s functional
currency in accordance with U.S.
generally accepted accounting
principles (GAAP). Enter in the U.S.
dollar column each line item functional
currency amount translated into dollars
using U.S. GAAP translation rules. If the
FDE or FB does not maintain U.S.
GAAP income statements in U.S.
dollars, you can use the average
exchange rate as determined under
section 989(b). The rate used should be
the rate stated on Schedule H, line 8. If
you choose to use the average
exchange rate rather than the U.S.
GAAP translation rules, check the box
above line 1 on Schedule C.
Special rules for DASTM. If the FDE
or FB uses DASTM, the functional
currency column should reflect local
hyperinflationary currency amounts
figured in accordance with U.S. GAAP.
The U.S. dollar column should reflect
such amounts translated into dollars
under U.S. GAAP translation rules.
Differences between this U.S. dollar
GAAP column and the U.S. dollar
income or loss figured for tax purposes
under Regulations section 1.985-3(c)
should be accounted for on Schedule H.
See Special rules for DASTM under
Schedule H, later.
Line 12. Enter the income, war profits,
and excess profits tax deducted in
accordance with U.S. GAAP.
Line 13. Include on line 13 adjustments
for extraordinary items or prior period
adjustments. The terms “extraordinary
items” and “prior period adjustments”
have the same meaning given to them
by U.S. GAAP (see Subtopic 225-20,
Income Statement and Statement No.
16 of the Financial Accounting
Standards Board).
Important: Differences between this
functional currency amount and the
amount of taxes that reduce earnings
and profits (E&P) (in the case of an FDE
or FB of a CFC) or are deductible in
figuring U.S. taxable income (in the
case of an FDE or FB of a U.S. person
or a CFP) should be accounted for on
line 2 or 3 of Schedule H.

Schedule C-1

The activities of an FDE or FB may give
rise to one or more QBUs. If the QBU
has a different functional currency than

If a QBU has multiple owners,
complete a separate Schedule C-1 for
each owner.
However, if the U.S. person filing
Form 8858 knows that the owner of a
QBU has the same functional currency
as a QBU owned by that person, the
U.S. person filing Form 8858 is not
required to complete Schedule C-1 with
respect to that owner’s interest in the
QBU.
If the U.S. person filing Form 8858
does not know and does not have
reason to know the functional currency
of the owner of a QBU, leave column (b)
of lines 1 and 2 blank.

Line 2b
Report on line 2b the amount of
section 987 gain or loss recognized by
the recipient owner that results from a
remittance from a QBU or a termination
of a QBU.
For amounts reported on line 2b of
Schedule C-1, include a statement with
the following information.
• A description of the methodology
used to figure the section 987 gain or
loss.
• The amount of section 987 gain or
loss included on line 2b that was
previously deferred under Regulations
section 1.987-12 and that is being
recognized in the current tax year.

Line 3b
Report on line 3b the amount of
section 987 gain or loss that is deferred
under Regulations section 1.987-12
either from a deferral event or an
outbound loss event.
If an amount is included on line 3b,
include a statement that provides the
following information for each deferral
event or outbound loss event.
• Description of the deferral event or
outbound loss event.
• The amount of section 987 gain or
loss recognized in the tax year of the
deferral event or outbound loss event,
and in any subsequent tax year, the
remaining amount of deferred section
987 gain or loss.
• For an outbound loss event described
in Regulations section 1.987-12(d)(4),
the amount of section 987 loss that is an
adjustment to stock basis and the name
-6-

If the owner changed the method of
accounting for its section 987 gain or
loss, provide a statement describing the
previous method used, the new method
being used, and the rationale for the
change in method of accounting.

Schedule F

Use Schedule F to report a summary
balance sheet for the FDE or FB figured
and translated into U.S. dollars in
accordance with U.S. GAAP.
Special rule for DASTM. If the FDE or
FB uses DASTM, Schedule F should be
prepared and translated into U.S.
dollars according to Regulations section
1.985-3(d), rather than U.S. GAAP.

Schedule G
Line 3

If the tax owner of the FDE is claiming a
section 165 loss with respect to
worthless stock or with respect to
certain obligations, see Regulations
section 1.6011-4 for information relating
to a disclosure statement that must be
attached to Form 8858 if certain
requirements are met.

Line 6

Check “Yes” if the FB or FDE is a
QBU as defined in section 989(a). If the
QBU is subject to section 987, see
Schedule C-1.

Lines 7 and 8
Note. Do not complete lines 7 and 8 if
you are an individual who owns an FB or
FDE directly or through tiers of FBs and
FDEs.
A base erosion payment, in general,
means any amount paid or accrued by
an “applicable taxpayer” (as defined by
section 59A(e)) to a foreign person
which is a related party of the taxpayer
and with respect to which a deduction is
allowable under chapter 1 of the Code.
See section 59A(d).
A base erosion tax benefit, in
general, means any deduction which is
allowed under chapter 1 for the tax year
with respect to any base erosion
payment. See section 59A(c)(2).
See sections 59A(f) and 59A(g) and
the Instructions for Form 8991 for the
definitions of “foreign person” and
“related party.”
Also, see the Instructions for Form
8991 for the determination of a base
Instructions for Form 8858 (Rev. 09-2021)

erosion payment and a base erosion tax
benefit.

Line 7a
Check “Yes” if the FB or FDE
received (or accrued the receipt of) any
base erosion tax payment, or had a
base erosion tax benefit, from a foreign
person which is a related party of the FB
or FDE. Otherwise, check “No.”
If “Yes,” complete lines 7b and 7c,
where appropriate.

Line 7b
Enter the total amount of base
erosion payments received (or accrued
the receipt of) by the FB or FDE for the
tax year.

Line 7c
Enter the total amount of base
erosion tax benefit recognized by the
payor relating to base erosion payments
reported on line 6b. Also include on
line 6c any base erosion tax benefit
taken into account in the current year
from a base erosion payment in a
previous year, for example, depreciation
described in section 59A(c)(2)(A)(ii).

Line 8a
Check “Yes” if the FB or FDE paid (or
accrued the payment of) any base
erosion tax payment, or had a base
erosion tax benefit, to a foreign person
which is a related party of the FB or
FDE. Otherwise, check “No.”
If “Yes,” complete lines 8b and 8c,
where appropriate.

Line 8b
Enter the total amount of base
erosion payments paid or accrued by
the FB or FDE for the tax year.

Line 8c
Enter the total amount of base
erosion tax benefit relating to base
erosion payments reported on line 8b.
Also include on line 8c any base erosion
tax benefit taken into account in the
current year from a base erosion
payment in a previous year, for
example, depreciation described in
section 59A(c)(2)(A)(ii).

owner of the interest in the FDE, is a
U.S. corporation (other than a RIC, a
REIT, or an S corporation). If the tax
owner is a U.S. partnership that has at
least one partner other than an
individual, a RIC, a REIT, or an S
corporation, complete lines 10 and 11
only. Otherwise, continue to
Schedule H.
An FB or interest in an FDE of a U.S.
corporation may be treated as a
separate unit and subject to dual
consolidated loss (DCL) rules pursuant
to Regulations sections 1.1503(d)-1
through 1.1503(d)-8.

Line 10a
Check “Yes” if the FB or FDE is a
separate unit under Regulations section
1.1503(d)-1(b)(4), is not part of a
combined separate unit under
Regulations section 1.1503(d)-1(b)(4)
(ii), and has a DCL for the tax year. If
you checked “Yes” on line 10a, enter the
amount of the DCL on line 10b.

Line 11a
If the FB or interest in the FDE is
treated as a separate unit under
Regulations section 1.1503(d)-1(b)(4),
is part of a combined separate unit, and
the combined separate unit has a DCL
for the tax year, check “Yes” and go to
lines 11b and 11c. Otherwise, check
“No,” then skip lines 11b through 12e
and go to line 13a.

Line 11b
If you checked “Yes” on line 11a,
enter the amount of the DCL for the
combined separate unit (as defined in
Regulations section 1.1503(d)-1(b)(4)).
See Regulations section 1.1503(d)-5(c)
(4)(ii) and complete line 11c.

Line 11c
If you checked “Yes” on line 11a,
enter the net income or loss attributed to
the FB or the interest in the FDE. See
Regulations section 1.1503(d)-5(c)(4)(ii)
(A).

Line 12a

Lines 10 Through 13

Subject to certain exceptions, a
domestic use of a DCL is not permitted
(“domestic use limitation rule”). A
domestic use is deemed to occur in the
year the DCL is included in the
computation of the taxable income of a
consolidated group, unaffiliated dual
resident corporation, or unaffiliated
domestic owner, as applicable. See
Regulations section 1.1503(d)-2.

Complete lines 10 through 13 only if
the tax owner of the FB, or the tax

Check “Yes” on line 12a if any portion
of the DCL on line 10b or 11b was taken

Line 9
Answer line 9 only if the tax owner of
the FB or FDE is a CFC. Otherwise, skip
to line 10.

Instructions for Form 8858 (Rev. 09-2021)

-7-

into account in figuring U.S. taxable
income for the year. If “Yes,” go to
line 12b. If “No,” go to line 13a.

Line 12b

A domestic use of a DCL is permitted if
an exception to the domestic use
limitation rule applies. See Regulations
section 1.1503(d)-6 for exceptions. For
example, a domestic use election made
pursuant to Regulations section
1.1503(d)-6(d) is such an exception.
If you check “Yes,” you may need to
include a domestic use election with
your U.S. income tax return. If the
answer to line 12b is “Yes,” go to
line 12c. If the answer to line 12b is
“No,” skip line 12c and go to line 12d.

Line 12c
If you checked “Yes” on line 12b, the
regulations require that you file
documentation for an exception to
apply. Check “Yes” on line 12c if you
have attached any of the following
documents to your timely filed return.
• The document(s) required to be filed
under an elective agreement between
the United States and a foreign country;
see Regulations section 1.1503(d)-6(b)
(1).
• “No Possibility of Foreign Use of Dual
Consolidated Loss Statement”; see
Regulations section 1.1503(d)-6(c).
• “Domestic Use Election and
Agreement”; see Regulations section
1.1503(d)-6(d)(1).

Line 12d

If a separate unit, as defined under
Regulations section 1.1503(d)-1(b)(4),
incurs a DCL after having contributed to
consolidated taxable income of a group
in prior years, the DCL may be used to
offset income of domestic affiliates in
the year of the DCL (limited by the
amount of the separate unit’s prior
contribution to the cumulative
consolidated taxable income of the
group (“cumulative register”)). See
Regulations sections 1.1503(d)-4(c)
and 1.1502-21(c).
Check “Yes” on line 12d if the DCL
was used to figure consolidated taxable
income. If the DCL amount exceeds the
separate unit’s cumulative register as of
the beginning of the tax year, the
amount of DCL claimed is limited to the
extent of the cumulative register and
should be reflected on line 10b or 11b,
as appropriate. Any excess DCL is
treated as a loss carryover subject to
the separate return limitation year
(SRLY) provisions of Regulations
section 1.1502-21(c), as modified by
Regulations section 1.1503(d)-4. Do not

answer “Yes” to line 12d if the DCL was
used to figure consolidated taxable
income pursuant to one of the
exceptions under Regulations section
1.1503(d)-6. See lines 12b and 12c,
earlier. If the answer to line 12d is “Yes,”
go to line 12e.
Check “No” on line 12d if the DCL
was not used to figure consolidated
taxable income or the separate unit’s
cumulative register as of the beginning
of the tax year is less than or equal to
zero. In such case, the DCL is treated
as a loss carryover subject to the SRLY
provisions of Regulations section
1.1502-21(c), as modified by
Regulations section 1.1503(d)-4.

Line 12e

If the answer to line 12d is “Yes,” enter
the separate unit’s contribution to the
cumulative consolidated taxable income
as of the beginning of the tax year.

Line 13a
Check “Yes” if a triggering event
occurred under Regulations section
1.1503(d)-6(e) requiring recapture of
any DCLs attributable to the FB or
interest in the FDE, individually or as
part of a combined separate unit, in any
prior tax years. If “Yes,” enter the total
amount of recapture on line 13b. In
addition, attach a statement to Form
8858 that provides a detailed
description of the triggering event, the
regulation citation for the triggering
event, and a schedule of the prior
year(s) DCL(s) being recaptured by
year.
Check “No” if, with regard to each
such prior year DCL, one of the
following is applicable.
• No triggering event occurred in the
current tax year.
• A triggering event occurred in the
current tax year, however, a “Rebuttal to
Triggering Event” is attached to the
return pursuant to Regulations section
1.1503(d)-6(e)(2).
• A triggering event occurred in the
current tax year, however, the amount of
the recapture was reduced to zero
pursuant to Regulations section
1.1503(d)-6(h)(2) and a “Reduction of
Recapture Amount” is attached to the
return.
Note. If there is a partial reduction of
the recapture amount pursuant to
Regulations section 1.1503(d)-6(h)(2)
and a recapture amount is required to
be included in income, check “Yes,”
enter the reduced amount of the DCL
recapture included in income, and

attach the “Reduction of Recapture
Amount” to the return.

Schedule H

Use Schedule H to report the FDE's
current E&P or the FB’s income (if the
tax owner is a CFC) or the FDE’s or
FB’s taxable income (if the tax owner is
a U.S. person or a CFP). Generally,
enter the amounts on lines 1 through 6
in functional currency.
Special rules for DASTM. If the FDE
or FB uses DASTM, enter on line 1 the
U.S. dollar GAAP income or loss from
line 14 of Schedule C. Enter on lines 2
and 3 the adjustments made in figuring
current E&P or taxable income for U.S.
tax purposes. Report these amounts in
U.S. dollars. Enter on line 5 the DASTM
gain or loss figured under Regulations
section 1.985-3(d).

Lines 2 and 3

Certain adjustments must be made to
the FDE’s or FB’s line 1 net book
income or loss to determine its current
E&P or taxable income. The
adjustments may include those needed
to conform the foreign book income to
U.S. GAAP and to U.S. tax accounting
principles. If the FDE’s or FB’s books
are maintained in functional currency in
accordance with U.S. GAAP, enter on
line 1 the functional currency GAAP
income or loss from line 14 of
Schedule C, rather than starting with
foreign book income, and show
GAAP-to-tax adjustments on lines 2 and
3.
The adjustments may include the
following.
• Capital gains and losses.
• Depreciation, amortization, and
depletion.
• Investment or incentive allowance.
• Charges to statutory reserves.
• Inventory adjustments. Inventories
must be taken into account according to
the rules of sections 471 (incorporating
the provisions of section 263A) and 472
and the related regulations.
• Taxes. See the instructions for
Schedule C, line 13, earlier.
Attach a separate schedule that lists
each applicable adjustment item. For
each adjustment item, indicate the
adjustment amount and whether the
amount is a net addition or net
subtraction. The separate schedule
should also show two totals, the total
net additions amount to be entered on
line 2, and the total net subtractions
amount to be entered on line 3.

-8-

Line 5
DASTM gain or loss, reflecting
unrealized exchange gain or loss,
should be entered on line 5 only for
FDEs or FBs that use DASTM.

Line 7

Enter on line 7 the functional currency
amount translated into U.S. dollars at
the average exchange rate for the
FDE’s or FB’s tax year. See section
989(b). Report the exchange rate using
the “divide-by convention” specified
under Reporting Exchange Rates on
Form 8858, earlier. If the FDE or FB
uses DASTM, enter on line 7 the same
amount entered on line 6.

Blocked income. The E&P or taxable
income of the FDE or FB, as reflected
on Schedule H, must not be reduced by
all or any part of such E&P or taxable
income that could not have been
distributed by the FDE or FB due to
currency or other restrictions or
limitations imposed under the laws of
any foreign country.

Schedule I

Important: Schedule I should be
completed if the FB or FDE is owned:
• Directly by a domestic corporation, or
• Indirectly by a domestic corporation
through a tiered structure of FDEs or
FBs.
Schedule I should not be completed
if the FB or FDE is owned by a CFC.

Line 1
Check “Yes” if any assets of an FB
(or a branch that is an FDE) were
transferred to a foreign corporation
during the tax year. If “Yes,” continue to
line 2; otherwise, check “No” and do not
complete the rest of Schedule I.

Line 2
Check “Yes” if the transferor was a
domestic corporation that transferred
substantially all of the assets of an FB
(or a branch that is an FDE) to a
specified 10%-owned foreign
corporation. A specified 10%-owned
foreign corporation is defined in section
245A(b)(1) as any foreign corporation
with respect to which any domestic
corporation is a U.S. shareholder with
respect to such corporation. If “Yes,”
continue to line 3.

Line 3
Check “Yes” if the transferor was a
domestic corporation and immediately
after the transfer the domestic
corporation was a U.S. shareholder
Instructions for Form 8858 (Rev. 09-2021)

(10% or more shareholder) with respect
to the transferee foreign corporation. If
“Yes,” continue to line 4; otherwise,
stop.

Line 4
Under section 91, the U.S. transferor
must include in gross income an amount
equal to the transferred loss amount
(TLA), if any, as defined in section 91(b)
upon a transfer of substantially all of the
assets of an FB (including an FB that is
an FDE) to a foreign corporation. The
TLA is the sum of losses incurred by the
FDE or FB after 2017, and before the
transfer and with respect to which a
deduction was allowed to the U.S.
transferor reduced by the sum of:
1. Any taxable income of such
branch for a tax year after the tax year in
which the loss was incurred and through
the close of the tax year of the transfer,
and
2. Any amount recognized under
section 904(f)(3) resulting from the
transfer.
Also, see section 14102(d)(4) of the Tax
Cuts and Jobs Act (TCJA) for the
transition rule of section 91.
The TLA amount may be reduced
(but not below zero) by the amount of
gain recognized on account of the
transfer, other than the amounts
recognized under section 904(f)(3), if
any. Enter the amount of the TLA
included in gross income as a positive
number on line 4.
If the amount is equal to or less than
zero, enter zero and no TLA is required
to be recognized by the U.S. transferor
on the transfer under section 91. If the
amount is greater than zero, enter the
TLA on line 4 and report this amount as
other income on the applicable Form
1120 (for Form 1120 filers, page 1,
line 10, Other income) and identify the
amount as “Section 91 Transferred Loss
Amount.” In addition, attach a
“Schedule I—Transferred Loss Amount
Additional Information” statement to the
Form 8858 and provide the following
information.
• A detailed calculation of the
transferred loss amount reflecting
amounts of the losses generated by
such foreign branch after 2017 by year,
and any income amounts by year
generated after such loss year.
• The amount, if any, recognized under
section 904(f)(3) on account of the
transfer.
• A detailed summary of the gain
recognized (other than section 91) by
the transferor, including any section
Instructions for Form 8858 (Rev. 09-2021)

367(a)(1) gain on the transfer of
property.
• A calculation of the net sum of the
previously deducted losses incurred by
such foreign branch for tax years prior to
January 1, 2018, that would have been
recaptured under section 367(a)(3)(C),
as determined without regards to the
repeal of the section 367(a)(3) active
trade or business exception by section
14102 of the TCJA.

Schedule J

List income, war profits, and excess
profits taxes (“income taxes”) paid or
accrued to the United States and to
each foreign country or U.S. possession
for the foreign entity’s foreign tax year(s)
that end with or within its U.S. tax year.
Do not report taxes that are not
creditable, including taxes for which a
credit is disallowed under section 901(j),
(k), (l), or (m).
Except as provided below,
adjustments to foreign income taxes
paid or accrued in a prior year should
not be reflected on the Form 8858 in the
year of adjustment. Instead, they are
reported in the year to which such taxes
relate. This may require an amended
return. See section 905(c), as amended
by the TCJA. Adjustments include, for
example, additional payments, refunds,
and downward adjustments for accrued
foreign taxes that are not paid within 24
months after the close of the tax year to
which such taxes relate. For more
information, see Regulations section
1.905-3.

Exception. With respect to entities
owned directly by a U.S. person, certain
de minimis adjustments may be taken
into account in the year of such
adjustment. See Regulations section
1.905-3(b)(1).
Column (a). Enter the two-letter
country code (from the list at IRS.gov/
CountryCodes) of all foreign countries
and U.S. possessions within which
income is sourced and/or to which taxes
were paid, accrued, or deemed paid.
Column (b). Enter the foreign tax year
(YYYY-MM-DD) of the foreign entity to
which the tax relates.
Columns (c) through (e). Report
foreign income taxes in column (c) in
the local currency in which the taxes are
payable. Translate these amounts into
U.S. dollars (column (e)) at the average
exchange rate for the tax year to which
the tax relates (column (d)) unless one
of the exceptions below applies. See
section 986(a).
-9-

Exceptions. If one of the following
exceptions applies, use the exchange
rate in effect on the date the foreign
entity paid the tax.
1. The tax is paid before the
beginning of the year to which the tax
relates.
2. Accrued taxes are not paid
before the date 2 years after the close of
the tax year to which such taxes relate.
3. There is an election in effect
under section 986(a)(1)(D) to translate
foreign taxes using the exchange rate in
effect on the date of payment.
4. The foreign entity reports on the
cash basis. See section 986(a).
5. The foreign income taxes are
denominated in a foreign currency that
is an inflationary currency.
Enter the exchange rate used in
column (d). Report the exchange rate
using the “divide-by convention”
specified under Reporting Exchange
Rates on Form 8858, earlier. Enter the
translated U.S. dollar amount in column
(e).
Columns (f) through (i). Enter the
amount by separate category of income
in columns (f) through (i).
Example. Form 8858 is filed for
calendar year 2021. A foreign
corporation owns foreign entities in
countries AA and BB. The foreign entity
in country AA pays or accrues tax of 10u
= $10 to country AA with respect to its
tax year ending November 30, 2021.
The foreign entity in country BB pays or
accrues tax of 20v = $30 to country BB
with respect to its tax year ending March
31, 2021. In addition, in 2021, the
foreign corporation received a refund of
3u or $5 with respect to the entity it
owns in country AA for tax year ending
November 30, 2019, which had an
original liability of 21u or $35. All taxes
relate to general category income. The
following entries should be made on
Schedule J of the Form 8858 filed for
calendar year 2021.
Line 1
• column (a): Country code AA
• column (b): 2020-11-30
• column (c): 10u
• column (d): 1.0000
• column (e): $10
• column (h): $10
Line 2
• column (a): Country code BB
• column (b): 2020-03-31
• column (c): 20v
• column (d): 0.6666
• column (e): $30
• column (h): $30

See the filled-in example of
Schedule J, later.
2019 refund. The refund from tax
year 2019 is not reported on the 2021
Form 8858. The following entries should

•
•
•
•

be made on Schedule J of the amended
Form 8858 filed for the calendar year
2019.
• column (a): Country code AA
• column (b): 2019-11-30

column (c): 18u
column (d): 0.6000
column (e): $30
column (h): $30

Example—Filled-in Schedule J for Calendar Year 2021
Schedule J

Income Taxes Paid or Accrued (see instructions)
Foreign Income Taxes

Foreign Tax Credit Separate Categories

(a)
Country or
Possession

(b)
Foreign Tax Year
(YYYY-MM-DD)

(c)
Foreign Currency

(d)
Conversion
Rate

(e)
U.S. Dollar

AA

2021-11-30

10u

1.0000

10

10

BB

2021-03-31

20v

0.6666

30

30

40

40

Totals

For additional instructions on the
reporting of foreign taxes for entities
filing a Form 8858 that are owned by a
foreign corporation, see the instructions
for Form 5471, Schedule E.
For purposes of column (i), enter
foreign taxes related to a separate
category of income not otherwise listed
in column (f), (g), or (h). Identify the
taxes with respect to each separate
category of income. For example, if a
foreign entity pays taxes to Country A
that are related to two separate
categories of income, report the taxes
related to the first separate category on
one line and the taxes related to the
other separate category on another line.
For purposes of determining the
applicable categories of income, see
Categories of Income in the Instructions
for Form 1118 or in the Instructions for
Form 1116, as applicable.

Schedule M (Form 8858)

Important: In translating the amounts
from functional currency to U.S. dollars,
use the average exchange rate for the
FDE’s or FB’s tax year. See section
989(b). Report the exchange rate in the
entry space provided at the top of
Schedule M (Form 8858) using the
“divide-by convention” specified under
Reporting Exchange Rates on Form
8858, earlier.
A Schedule M (Form 8858) must be
filed with each Form 8858 if the FDE or
FB entered into any transaction with the
filer of the Form 8858 or other related
entities during the annual accounting
period of the FDE or FB.
Every U.S. person that is required to
file Schedule M (Form 8858) (see Who
Must File, earlier) must file the schedule
to report the transactions that occurred
during the FDE’s or FB’s annual

(f)
Foreign
Branch

(g)
Passive

(h)
General

(i)
Other

accounting period ending with or within
the U.S. person's tax year.

through (e) of the U.S. Tax Owner set of
columns.

If a U.S. corporation is the U.S.
person filing Schedule M (Form 8858)
and is a member of a consolidated
group, list the common parent as the
U.S. person filing Schedule M (Form
8858).

Column (e). For CFP- or CFC-owned
FDEs or FBs, use column (e) to report
transactions between the FDE or FB
and any U.S. person with a 10% or
more direct interest in the CFP or any
10% or more U.S. shareholder of any
corporation controlling the CFC. If you
are a Category 1 filer of Form 8865, or a
Category 4 filer of Form 5471, do not
report transactions between yourself
and the FDE or FB under column (e).
Report the transactions only under
column (b).

Reference ID number. A reference ID
number for the FDE or FB identified on
Schedule M (Form 8858) is required if
no EIN is provided. However, filers are
permitted to provide both an EIN and
reference ID number. For more
information on the reference ID number,
see Line 1b(2)—Reference ID number,
earlier.
Column headings. There are three
sets of column headings above lines 1
through 21. The first set of column
headings is to be used in cases where
the tax owner is a CFP. The second set
of column headings is to be used in
cases where the tax owner is a CFC.
The third set of column headings is to
be used in cases where the tax owner is
a U.S. person. If you are completing
Schedule M (Form 8858) for an FDE or
FB for which the tax owner is a CFP,
check the box for CFPs and complete
lines 1 through 21 using the headings in
columns (a) through (e) of the CFP set
of columns. If you are completing
Schedule M (Form 8858) for an FDE or
FB for which the tax owner is a CFC,
check the box for CFCs and complete
lines 1 through 21 using the headings in
columns (a) through (f) of the CFC set of
columns. If you are completing
Schedule M (Form 8858) for an FDE or
FB for which the tax owner is a U.S.
person, check the box for U.S. Tax
Owner and complete lines 1 through 21
using the headings in columns (a)
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U.S. tax owner. The following
instructions for columns (b) through (e)
apply only to an FDE or FB with a U.S.
tax owner.
Column (b). Use column (b) to
report transactions between the FDE or
FB with the U.S. person filing this return
only if the U.S. person filing this return is
other than the tax owner of the FDE or
FB. If the U.S. person filing this return is
the tax owner of the FDE or FB, do not
enter any amounts in column (b).
Column (c). Use column (c) to
report transactions between the FDE or
FB with any domestic corporation or
partnership controlled by the filer. Do
not include any transactions between
the FDE or FB with its direct U.S. tax
owner that are treated as disregarded
for U.S. tax purposes in column (c).
Column (d). Use column (d) to
report transactions between the FDE or
FB with any foreign corporation
(including its FBs or FDEs) controlling or
controlled by the filer. This will include
any transactions between the FDE or
FB with any foreign corporation
(including its FBs or FDEs) controlling or
controlled by the FDE or FB U.S. tax
Instructions for Form 8858 (Rev. 09-2021)

owner, if the U.S. tax owner of the FDE
or FB is not the U.S. person filing the
return.
Column (e). Use column (e) to
report transactions between the FDE or
FB with any foreign (including hybrid)
partnerships (including its FBs or FDEs)
controlling or controlled by the filer. This
will include any transactions between
the FDE or FB with any foreign
(including hybrid) partnership (including
its FBs or FDEs) controlling or

controlled by the FDE or FB U.S. tax
owner, if the U.S. tax owner of the FDE
or FB is not the U.S. person filing the
return.
Line 6. Report on line 6 dividends
received by the FDE that were not
previously taxed under subpart F in the
current year or in any prior year.
Lines 20 and 21. Report on lines 20
and 21 the largest outstanding balances
during the year of gross amounts

borrowed from, and gross amounts
loaned to, the related parties described
in columns (b) through (f). Do not enter
aggregate cash flows, year-end loan
balances, average balances, or net
balances. Do not include open account
balances resulting from sales and
purchases reported under other items
listed on Schedule M (Form 8858) that
arise and are collected in full in the
ordinary course of business.

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 and related schedules will vary depending on individual circumstances. The
estimated burden for individual taxpayers filing this form is approved under OMB control number 1545-1910 and is included in
the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who
file this form is shown below.
Learning about the
law or the form

Preparing and sending
the form to the IRS

Form

Recordkeeping

8858

25 hr., 49 min.

4 hr., 46 min.

5 hr., 24 min.

24 hr., 9 min.

6 min.

30 min.

Sch. M (Form 8858)

If you have comments concerning the accuracy of these time estimates or suggestions for making this form and related
schedules simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

Instructions for Form 8858 (Rev. 09-2021)

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