Form 5472 reportable transactions: What counts in 2026
Michel Myara is co-founder and product designer at looch, where he designs the tools small businesses use to get paid, manage spend, and run their books.
Updated August 2026
Almost any money movement with your foreign owner is reportable
For a foreign-owned US single-member LLC, "reportable transaction" reaches further than most owners expect: Part IV of Form 5472 captures ordinary monetary dealings with the foreign related party, and Part V adds a catch-all for disregarded entities that sweeps in contributions, distributions, and amounts tied to forming or dissolving the entity. The rules that decide what goes on the form, per the Instructions for Form 5472 (Rev. 12-2024):
- Part IV covers monetary transactions: Sales, rents, royalties, fees, loans, interest, and other payments where money was the sole consideration
- Part V requires a foreign-owned disregarded entity to report "amounts paid or received in connection with the formation, dissolution, acquisition, and disposition of the entity, including contributions to, and distributions from, the entity"
- A reported amount qualifies as a reasonable estimate if it is "at least 75% but not more than 125% of the actual amount"
- A transaction, or a series of transactions, totaling $50,000 or under may be reported as "$50,000 or less"
- The record-maintenance duty under Regulations section 1.6038A-3 carries the same $25,000 penalty as not filing at all
Last verified: August 24th, 2026.
Who must file, the pro forma Form 1120 mechanics, and the deadline live in our main Form 5472 guide for foreign founders. This page covers the two questions that follow: Which transactions actually go on the form, and what records you need behind each number when the IRS asks.
Part IV: The ordinary monetary transactions
Part IV is the grid most people picture when they think of the form. It captures monetary dealings between the reporting corporation and a foreign related party during the tax year: Sales and purchases of inventory, rents and royalties paid or received, fees, commissions, amounts loaned and borrowed, interest, and similar payments where money was the sole consideration exchanged.
Two mechanics inside Part IV do a lot of quiet work:
The reasonable-estimate rule. You do not need cent-perfect figures, but you do need to be close. The instructions define a reasonable estimate as an amount "at least 75% but not more than 125% of the actual amount required to be reported." Outside that band, the amount is not a reasonable estimate, and a substantially incomplete form is treated as not filed at all, which is where the $25,000 penalty starts.
The $50,000-or-less disclosure. If the actual amount of a transaction, or a series of transactions, does not exceed $50,000 in total, it "may be reported as ‘$50,000 or less.’" That is a real simplification for small flows, and it only works if your records can show the total genuinely stayed under the line.
Part V: The catch-all that catches dormant LLCs
Part V is where the definition widens for a foreign-owned US disregarded entity, and it is the reason "my LLC was dormant" almost never means "no filing."
A foreign-owned disregarded entity checks the Part V box for transactions of any other kind, and the instructions spell out what that includes: "amounts paid or received in connection with the formation, dissolution, acquisition, and disposition of the entity, including contributions to, and distributions from, the entity."
Read that against a real first year. You paid the state filing fee from your own pocket: A formation amount. You wired the company $500 to open its account: A contribution. You took $200 back out in December: A distribution. Each of those is a reportable transaction, and any one of them creates the filing obligation for a company that never invoiced a single customer. A dormant LLC with no revenue and one funding wire still files.
If the LLC does not yet exist, the sequence starts earlier: The entity and its EIN come first, and our guide to getting an EIN without an SSN covers that path.
The records behind the numbers, and the duty most owners have never heard of
The filing obligation travels with a second duty: The reporting corporation must keep the books and records that substantiate the form. The instructions require the permanent books of account or records as required by section 6001, and the penalty section says it plainly: The $25,000 penalty "also applies for failure to maintain records as required by Regulations section 1.6038A-3." Keeping no records is penalized the same as filing nothing.
What survives an exam is the paper trail behind every number on the form:
- Bank and card statements for the LLC and for every flow between you and it, both directions
- Dated records of contributions and distributions, with the source and destination accounts visible
- Formation cost evidence: Who paid the state fee, the registered agent, the formation service, and from which account
- Loan terms in writing if money moved as a loan rather than a contribution, because the two are reported differently
- Invoices and agreements behind any Part IV amount, so a rent is provably a rent and a fee provably a fee
This is where the yearly pain actually lives. Most filing services ask you to dig up a year of bank statements and email them over, and the quality of the filing is capped by what you manage to find. A platform like looch starts from the other end: Every transaction is already in the app, including activity from external bank, card, and investment accounts, which are added as accounting-enrolled so their transactions flow in automatically. The complete record the regulations require is the record the books are built on, not a shoebox you assemble each February.
Who should use a CPA instead
This page describes the plain case: One US single-member LLC, one foreign owner, transactions of the ordinary kind. A CPA or enrolled agent, not a prepared form, is the right tool if any of these describe you:
- A multi-member LLC, which is a partnership with its own return
- A corporation with actual tax to compute
- Effectively connected income or a US trade or business
- A missed prior year, where the work is penalty relief, not this year’s form
The current-year filing, prepared
For the plain case, looch prepares the annual filing itself, the pro forma Form 1120 with Form 5472 attached, prepared and signed by an IRS PTIN holder as paid preparer, for $399 per filing on the looch pricing page. If you still need the entity and the EIN, looch Start handles both, including the EIN path for founders with no SSN or ITIN.
Source for every rule above: Instructions for Form 5472 (Rev. 12-2024). Verified 8/24/2026.
