Schedule N (Form 1120) 2019
Page 2
Instructions
Section references are to the Internal Revenue Code unless
otherwise noted.
Who Must File
Corporations that, at any time during the tax year, had assets in
or operated a business in a foreign country or a U.S. possession
may have to file Schedule N. If the corporation answers “Yes” to
any of the questions above, attach Schedule N and the
applicable forms and schedules to the corporation’s income tax
return.
Question 1a
Check the “Yes” box if the corporation is the “tax owner”
(defined below) of a foreign disregarded entity (FDE) or a foreign
branch (FB) or it is required to file Form 5471 or Form 8865 with
respect to a controlled foreign corporation or controlled foreign
partnership that is the tax owner of an FDE or FB.
Tax owner of an FDE or FB. The tax owner of an FDE or FB is
the person that is treated as owning the assets and liabilities of
the FDE or FB for purposes of U.S. income tax law.
A corporation that is the tax owner of an FDE or FB is
generally required to attach Form 8858 to its return. However, if
the Exception below applies, the corporation should attach a
statement (described below) in lieu of Form 8858.
Exception. In certain cases where a corporation owns an FDE
or FB indirectly or constructively through a foreign entity, the
corporation may not be required to attach Form 8858. See Who
Must File in the Instructions for Form 8858.
Statement in lieu of Form 8858. This statement must list the
name, country under whose laws the entity was organized, and
EIN (if any) of each applicable FDE or FB.
Question 3
If the corporation owned at least a 10% interest, directly or
indirectly, in any foreign partnership (other than any partnership
for which a Form 8865 is attached to the tax return), attach a
statement listing the following information for each foreign
partnership. For this purpose, a foreign partnership includes an
entity treated as a foreign partnership under Regulations section
301.7701-2 or 301.7701-3.
1. Name and EIN (if any) of the foreign partnership.
2. Identify which, if any, of the following forms the foreign
partnership filed for its tax year ending with or within the
corporation’s tax year: Form 1042, 1065, or 8804.
3. Name of the partnership representative (if any).
4. Beginning and ending dates of the foreign partnership’s
tax year.
Question 5
The corporation may be required to file Form 3520 if:
• It directly or indirectly transferred money or property to a
foreign trust (for this purpose, any U.S. person who created a
foreign trust is considered a transferor);
• It is treated as the owner of any part of the assets of a foreign
trust under the grantor trust rules; or
• It received a distribution from a foreign trust.
For more information, see the Instructions for Form 3520.
Note: An owner of a foreign trust must ensure that the trust files
an annual information return on Form 3520-A, Annual
Information Return of Foreign Trust With a U.S. Owner. For
details, see Form 3520-A.
Question 6
Check the “Yes” box if either 1 or 2 below applies to the
corporation. Otherwise, check the “No” box.
1. At any time during the 2019 calendar year, the corporation
had a financial interest in or signature or other authority over a
bank, securities, or other financial account in a foreign country
(see FinCEN Form 114, Report of Foreign Bank and Financial
Accounts (FBAR)); and:
• The combined value of the accounts was more than $10,000
at any time during the calendar year, and
• The account was not with a U.S. military banking facility
operated by a U.S. financial institution.
2. The corporation owns more than 50% of the stock in any
corporation that would answer “Yes” to item 1 above.
If “Yes” is checked for this question:
• Enter the name of the foreign country or countries (attach a
statement if more space is needed); and
• Electronically file FinCEN Form 114 with the Department of the
Treasury using the FinCEN’s BSA e-Filing System. Because
FinCEN Form 114 is not a tax form, do not file it with your
return.
Question 8
Check the “Yes” box if the corporation is a specified domestic
entity that is required to file Form 8938 with its Form 1120 and
include Form 8938 and this schedule with the Form 1120. See
the Instructions for Form 8938 for the definition of a specified
domestic entity.
