Form 1120 and Form 5472 are most commonly used in two circumstances:
These cases are very different. For a corporation with foreign owners, Form 1120 is the primary form, and it should be filled out with detailed information regarding income, expenses, assets, and liabilities. Form 5472, on the other hand, provides information regarding transactions between the corporation and its owners. Additional information is also required in situations that involve related persons and companies other than an owner.
For a corporation, taxes are calculated on Form 1120. A U.S. corporation owes U.S. taxes on its worldwide income, subject to tax treaties.
Form 1120 and Form 5472 for a corporation can be electronically filed.
For a U.S. based single-member LLC with a foreign owner, Form 5472 is the primary form. Form 1120 is filled out with only basic information about the company. No income or expenses information is included. On Form 5472 information is provided regarding transactions between the LLC and the single member. Information regarding other related companies (additional companies the same owner owns or that are owned by the LLC) must also be reported.
No tax is paid for a foreign-owned single-member LLC on either Form 1120 or Form 5472. If there is U.S. sourced taxable income the owner would be required to file Form 1040-NR, on which income and expenses would be reported and taxes paid.
Form 1120 and Form 5472 for a foreign-owned, single-member LLC cannot be electronically filed. They must be filed by fax or postal mail.