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Glossary

Related-party transaction

Also known as: Reportable transaction

process

A transaction between the reporting LLC and a related party (such as the foreign owner) that must be disclosed on Form 5472. Includes contributions, distributions, loans, repayments, services, and expenses paid by one party for the other.

Full entry

Categories we tag

When BorderFile processes your statements we tag each line as one of:

  • Contribution. Owner puts money (or property) into the LLC.
  • Distribution. LLC transfers money (or property) to the owner.
  • Loan from owner. Owner lends to the LLC with an expectation of repayment.
  • Loan repayment. LLC pays back a prior owner loan.
  • Owner-paid expense. Owner pays an LLC expense from their personal account.
  • Expense paid for owner. LLC pays a personal expense of the owner.
  • Services. Owner provides services to the LLC (or vice versa).
  • Other. Catch-all with a required free-text description.

Why “unclear” tags block submission

A 5472 that totals “contributions” or “distributions” wrong is worse than a 5472 that is slightly late. BorderFile’s submit guards block a filing until every transaction has been tagged — none left in the “unclear” state.

See also: Form 5472, 25% foreign ownership.

This is not tax advice. See the disclaimer.

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