Form 926

How it works

A U.S. person who transfers cash or property to a foreign corporation files Form 926 under Section 6038B: cash transfers above 100,000 dollars in a year, or transfers giving the transferor at least 10 percent of the foreign corporation. The penalty is 10 percent of the property’s value, capped at 100,000 dollars unless the failure was intentional, and the return stays open until the form is filed.

Why it matters

Funding a foreign startup, capitalizing an overseas subsidiary, or moving intellectual property offshore are Form 926 events, and they often travel with Form 5471.

Related: Form 5471. Read more: Form 926 requirements.