Form 5471 Help

[jonathan9528]

Hello,

I am hoping someone could help answer a techincal question regarding Form 5471 for my wife's UK Ltd company.

Our situation is as follows:

- We are both UK nationals and were living and working in New York (me on an L1 and my wife on a spousal visa) from January 2016 to September 15th 2017 last year, when we departed permenantly and returned to the UK.
- On 29th August 2017 last year my wife created a UK Ltd company, of which she is the only Director and shareholder.
- Her company received 3 payments (equivalent to $7,000 each time) in October, November and December last year. Unfortunately these payments were for contract work undertaken by my wife and I believe could therefore be considered to be for Personal Services under Subpart F Income. All work was undertaken from the UK.
-The company had no costs, assets or other transactions and my wife did not take a salary or dividend.

We are currently in the process of determining whether we will file jointly or separately. I also believe we may be able to elect to file separately and split the year so we are deemed to be resident aliens for the period 1st Jan to 15th September then non-resident aliens 16th September to 31st December.

The two questions I have are:

1. If we elect to file separately and split the tax year, such that my wife is a resident alien only to 15th September, does Form 5471 still have to cover the full year to 31st
December or just to 15th September? Incidentally, her company's tax year end will not be until 29th August 2018.

2. In the event it needs to cover the full year to 31st December, is she likely to have a personal tax liability on the subpart F income earned and paid whilst she was a non-resident alien post 15th September 2017? Can this be avoided in any way?

Thank you
Jonathan

[Lambs]

J,

This is a UK tax website, so I am not sure we are best placed to assist. Having said that, I know that there are one or two contributors on here who seem to do a lot of US/expat tax in their "day job", so you may yet strike lucky.

Fingers crossed,

Lambs