Does a GmbH need to be reported on a US tax return?

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Hi, I've been in Germany now 10 years from the US and in 2016 started a GmbH, which I have yet to report to the US tax authorities.  I was told that it is a separate entity from me as a person (from German tax advisors) and therefore that is why they didn't feel the need for me to have to report it in the US.  Up until this year the GmbH did not make any money, and just several months ago I started paying myself a salary from it.  That was another reason why I didn't want to go through the trouble (and pay all the money to get those taxes done) since I thought I would just wait until I actually start seeing some earnings with the business.

 

My obvious question to you all is, do I indeed need to report this on my US taxes, or is it a separate enough entity that it isn't necessary?

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On 9/15/2020, 8:41:57, Harms said:

My obvious question to you all is, do I indeed need to report this on my US taxes, or is it a separate enough entity that it isn't necessary?

 

Oh, the horror!

 

The answer is yes.

 

Read 'em and weep:

 

Form 5471:  https://www.irs.gov/pub/irs-pdf/f5471.pdf

 

Instructions to same:  https://www.irs.gov/pub/irs-pdf/i5471.pdf

 

Now google "controlled foreign corporation" (CFC).

 

There is a possibility of abatement of the penalty that will be automatically assessed against you and, failing that:

 

If your German tax advisor was dumb enough to give you the advice you say he gave you in writing, you may want to urge him/her to contact his/her malpractice insurance carrier.

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On 19/09/2020, 16:01:49, Straightpoop said:

 

 

Oh, the horror!

 

The answer is yes.

 

Read 'em and weep:

 

Form 5471:  https://www.irs.gov/pub/irs-pdf/f5471.pdf

 

Instructions to same:  https://www.irs.gov/pub/irs-pdf/i5471.pdf

 

Now google "controlled foreign corporation" (CFC).

 

There is a possibility of abatement of the penalty that will be automatically assessed against you and, failing that:

 

If your German tax advisor was dumb enough to give you the advice you say he gave you in writing, you may want to urge him/her to contact his/her malpractice insurance carrier.

"Thanks" for the answer ;-)  Oh horror indeed.  I guess I will indeed have to fork out the cash not only to report all those taxes in the US, since I don't know how to do that myself, but also pay the penalty, whatever that is...  If there are any recommendations for tax advisors who could help me, I would be happy.  I'm sure there are some lurking around here.  I seem to remember that from my perusing around Toytown back in the day, fresh off the boat.

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