Form 8992 (2020)

What Is IRS Form 8992

IRS Form 8992 is used by the U.S. shareholders of any controlled foreign corporations (CFCs) to calculate their Global Intangible Low-Taxed Income (GILTI) inclusion for the tax year. Understanding and complying with the requirements of Form 8992 is crucial for US shareholders to ensure they are not subject to penalties for failing to report foreign income accurately.

When to Use IRS Form 8992

Situations that require the use of Form 8992 include:

• If you are a U.S. shareholder (as defined by Section 951(b)) of one or more CFCs, you must include your share of GILTI on your U.S. tax return.
• In cases where elections like high-tax exclusions under Section 954(b)(4) affect the taxation of foreign income.
• Reporting GILTI for partnerships, S corporations, trusts, and estates with CFCs.

How To Fill Out Form 8992 Instructions

Step 1:

Start by entering the filer's name and the tax identification number at the top of the form.

Step 2:

Part I – Taxable Income or Loss of Each CFC List each CFC for which you report GILTI. Input necessary information such as the pro rata share of net CFC and tested income or loss, which reflects the GILTI inclusion amount.

Step 3:

Part II – GILTI Inclusion Part II requires the combined net CFC tested income and any adjustments to this amount. This section calculates the total amount of GILTI that must be included on your tax return.

Step 4:

Subtraction of Net Deemed Tangible Income Return. Here, you'll subtract the net deemed tangible income return (10% of the aggregate pro rata share of qualified business asset investment) from your GILTI computation.

Step 5:

Complete Part III if Applicable. If you are a U.S. shareholder member of a consolidated group, complete Part III to determine the consolidated GILTI amount under regulation.

Step 6:

Reporting on the Appropriate Tax Return. After completing the requisite sections, transfer the calculated GILTI amount to your income tax return (Form 1040 for individuals or the respective business tax return).

Where To File 8992 Tax Form

The completed Form 8992 should accompany your federal income tax return when filed. For individual taxpayers, file it with Form 1040 or 1040-SR. If you're filing as a business entity, attach it to the respective business income tax return form, such as Form 1120 for corporations.