Instructions for Form 8858

(Rev. December 2023)

(Use with the September 2021 revision of Form 8858)

Information Return of U.S. Persons With Respect to Foreign Disregarded Entities 

(FDEs) and Foreign Branches (FBs)

Department of the Treasury

Internal Revenue Service

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

Who must file, category 2 filer. The scope of filers has 

been modified to provide that a U.S. person is not a category 

2 filer solely as a result of its interest in a partnership (though 

it may be a filer in a different category).

Who must file, category 5 filer, and Schedule G, lines 10 

through 13. The persons previously described in category 5 

are no longer required to file and a U.S. partnership is no 

longer required to answer Questions 10 and 11 of 

Schedule G as if it were a U.S. corporation. For a 

partnership's reporting obligations concerning dual 

consolidated losses, see Partnership Instructions for 

Schedules K-2 and K-3 (Form 1065). The description in 

category 5 has been modified for a new group of filers.

Reminders

Initial or final checkboxes. Additional clarification has 

been provided for when to check these boxes. See Initial 

Form or Final Form 8858 under Specific Instructions, later.

Functional currency. Filers of Form 8858 are 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. 

• 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 foreign disregarded 

entity (FDE) or foreign branch (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 or own an FDE 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.

If the tax owner of the FDE or FB is a controlled foreign 

corporation (CFC) or controlled foreign partnership (CFP), 

the amounts reported on Form 8858 Schedules C, F, H, J and 

M must be included in determining the amounts reported on 

the equivalent schedules, if applicable, of Form 5471 or 8865 

of the tax owner. If there are tiers of FDE or FBs (e.g. one 

FDE owns one or more FDEs or FBs), then complete 

separate Forms 8858 for each FDE or FB. Do not include 

amounts reported on a Form 8858 for a lower tier FDE or FB 

onto the Form 8858 for the upper tier FDE. However, the 

amounts for all the FDEs and FBs must be included in 

determining the amounts reported on the form for the tax 

owner.

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).

Category 1 filer. 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.

Category 2 filer. A U.S. person that directly (or indirectly 

through a tier of FDEs) is a tax owner of an FDE or operates 

an FB. Complete the entire Form 8858, including the 

separate Schedule M (Form 8858).

Category 3 filer. Certain U.S. persons that are required to 

file Form 5471 with respect to a 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).

Category 4 filer. Certain U.S. persons that are required to 

file Form 8865 with respect to a 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, 

Dec 14, 2023 Cat. No. 38123Q
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.

Category 5 filer. A U.S. person that is a partner in a 

partnership that owns an FDE or operates an FB and applies 

section 987 to the activities of the FDE or FB using a method 

that requires the partner, rather than the partnership, to 

recognize section 987 gain or loss with respect to the FDE or 

FB. The U.S. person must complete the first page of the Form 

8858 and Schedule C-1 for each FDE and FB of the 

partnership. As stipulated in the Partnership Instructions for 

Schedules K-2 and K-3 (Form 1065), the partnership must 

furnish to the U.S. person all the information necessary for 

them to complete the above-described portions of Form 

8858. A category 5 filer should check the box for “FDE of a 

U.S. person” (in the case of an FDE owned by a partnership) 

or “FB of a U.S. person” (in the case of an FB owned by a 

partnership).

Category 6 filer. A U.S. corporation (other than a RIC, a 

REIT, or an S corporation) that is a partner in a U.S. 

partnership, which checked box 11 (Dual Consolidated Loss) 

on Schedules K-2 and K-3 (Form 1065). Even though the 

U.S. corporation is not the tax owner of the FDE and/or the 

FB, the U.S. corporation must complete lines 1 through 5 of 

the Form 8858, line 3 of Schedule G, 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. As 

stipulated in the Partnership Instructions for Schedules K-2 

and K-3 (Form 1065), the U.S. partnership must furnish to the 

U.S. corporate partner the information necessary for the 

partner to complete the above-described portions of 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

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) 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 IRS.gov/irb/

2009-39_IRB#RP-2009-41, for more information.

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.

Example. Assume Avery, 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 

2 Instructions for Form 8858 (Rev. 12-2023)
to both FDE 1 and FDE 2. Avery 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. 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.

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 four 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 four 

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 four 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.

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 the Substitute Forms 

Program. Use the address in the current Pub. 1167, General 

Rules and Specifications for Substitute Forms and Schedules 

at IRS.gov/Pub1167.

Instructions for Form 8858 (Rev. 12-2023) 3
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, 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

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.

Identifying Information

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 and the U.S. person has a 

P.O. box, show the box number instead.

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.

Initial Form or Final Form 8858

Check the Initial Form 8858 box in the year the tax owner 

formed or aquired the FDE or FB, and check the Final Form 

8858 box in the year the tax owner terminated or disposed of 

the FDE or FB. Only one of these boxes can be checked on 

each Form 8858 filed. For example, if an FDE is formed or 

aquired, and terminated or disposed of, 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.

On one Form 8858, you would check the Initial 8858 

checkbox to reflect the formation or acquisition of the FDE, 

and complete the rest of the form reporting information for the 

period that the tax owner owns the FDE. On the other Form 

8858, you would check the Final 8858 checkbox to reflect the 

termination or disposition of the FDE, and complete the rest 

of the form reporting information for the period that the tax 

owner owns the FDE.

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.

4 Instructions for Form 8858 (Rev. 12-2023)
Foreign branch (FB). An FB does not file Form 8832 and 

thus may not be 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 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.

Note. This correlation requirement applies only to the first 

year the new reference ID number is used.

Line 1g—Country in Which Principal Business 

Activity Is Conducted

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 the 6-digit principal business activity code number for 

the FDE or FB followed by a brief description of the FDE's or 

FB's principal business activity. Principal business activity 

code numbers can be found at the end of the Instructions for 

Form 5471.

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-currency-codes.html or CURRENCYISO.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.

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).

Line 3

If the tax owner of the FDE or FB is different from the filer, 

then provide the information required on lines 3a through 3e 

for the tax owner.

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)).

Line 3c(1)—U.S. Identifying Number

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.

Note. If the tax owner is an individual, enter an SSN on 

line 3c(1) or line 3c(2).

Instructions for Form 8858 (Rev. 12-2023) 5
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 (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 direct owner of the FDE or FB is different from the tax 

owner, then provide the information required on lines 4a 

through 4d for the direct owner. 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.

Schedule C

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 its 

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

If an owner would be treated as owning multiple QBUs, 

complete a separate Schedule C-1 with respect to each QBU 

of the owner.

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.

6 Instructions for Form 8858 (Rev. 12-2023)
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 of the CFC that 

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

Line 5

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) for the definitions of 

“foreign person” and “related party.”

Also, see the Instructions for Form 8991 for the 

determination of a base 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).

Line 9

Answer line 9 only if the tax owner of the FB or FDE is a CFC. 

Otherwise, skip to line 10.

Lines 10 Through 13

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

or the tax owner of the interest in the FDE, is a U.S. 

corporation (other than a RIC, a REIT, or an S corporation). 

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 

Instructions for Form 8858 (Rev. 12-2023) 7
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

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.

Check “Yes” on line 12a if any portion of the DCL on 

line 10b or 11b was taken 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.

8 Instructions for Form 8858 (Rev. 12-2023)
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.

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 (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 367(a)(1) 

gain on the transfer of property.

Instructions for Form 8858 (Rev. 12-2023) 9
• 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, or 

in the case of income taxes paid or accrued by a CFC or CFP, 

with or within its annual accounting period. 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).

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 2023. A 

CFC, which has a calendar year as its annual accounting 

period, owns FDEs in countries AA and BB. The FDE in 

country AA pays or accrues income tax of 10u = $10 to 

country AA with respect to its foreign tax year ending 

November 30, 2023. The FDE in country BB pays or accrues 

income tax of 20v = $30 to country BB with respect to its 

foreign tax year ending March 31, 2023. In addition, in 2023, 

the CFC received a refund of 3u or $5 with respect to the 

entity it owns in country AA for foreign tax year ending 

November 30, 2022, which had an original liability of 21u or 

$35. All taxes are allocated to the general category. The 

following entries should be made on Schedule J of the Form 

8858 filed for calendar year 2023.

Line 1

• column (a): Country code AA

• column (b): 2023-11-30

• column (c): 10u

• column (d): 1.0000

• column (e): $10

• column (h): $10

Line 2

• column (a): Country code BB

• column (b): 2023-03-31

• column (c): 20v

• column (d): 0.6666

• column (e): $30

• column (h): $30

See the filled-in example of Schedule J, later.

2022 refund. The refund from tax year 2022 is not 

reported on the 2023 Form 8858. The following entries 

should be made on Schedule J of the amended Form 8858 

filed for the calendar year 2022.

• column (a): Country code AA

• column (b): 2022-11-30

• column (c): 18u

• column (d): 0.6000

• column (e): $30

• column (h): $30

10 Instructions for Form 8858 (Rev. 12-2023)
Example—Filled-in Schedule J for Calendar Year 2023

 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

(f)

Foreign 

Branch

(g)

Passive

(h)

General

(i)

Other

AA 2023-11-30 10u 1.0000 10 10

BB 2023-03-31 20v 0.6666 30 30

Totals 40 40

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 income taxes 

allocated and apportioned 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 

allocated and apportioned to two separate categories of 

income, report the taxes allocated and apportioned to the 

first separate category on one line and the taxes allocated 

and apportioned 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 accounting period ending with or within 

the U.S. person's tax year.

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).

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

set of columns.

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).

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’s or FB’s U.S. tax 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’s or FB’s U.S. tax owner, if the U.S. tax 

owner of the FDE or FB is not the U.S. person filing the 

return.

Instructions for Form 8858 (Rev. 12-2023) 11
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.

Form Recordkeeping

Learning about the 

law or the form

Preparing and sending 

the form to the IRS

8858 25 hr., 49 min. 4 hr., 46 min. 5 hr., 24 min.

Sch. M (Form 8858) 24 hr., 9 min. 6 min. 30 min.

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.

12 Instructions for Form 8858 (Rev. 12-2023)