# Planning ahead - 5471 vs 8832



## cabecabe (Oct 20, 2012)

Hi all - these boards have been an invaluable source of information on how to handle UK personal company income on US tax forms. I've usually read them in the midst of filing and I see most questions on here come when people are in the same mindset.

Having just finished my 2011 taxes I would love to set myself up a bit better for next year. My question in short is 'Is a 5471 or an 8832 a better way to go?'

The tenor of past answers seems to be that 8832 is better because it's a less onerous form to complete. However, having done the 5471 this year, it wasn't too terrible. 

Does the 8832 allow for preferential treatment of dividends? I didn't take any dividends in 2011 (only a small salary) so I didn't get to this topic on this year's forms. As we all know, UK accountants advise taking £ out as dividends as they are taxed lower in the UK - but in the US it looks like dividends of foreign corporations may be flagged as subpart F income which I believe is best avoided. (Though the spirit of 5471 subpart F seems to be that it's trying to catch income which has never been taxed, which is not the case for UK dividends).

I am happy to pay for professional advice on this; obviously the stakes make it worthwhile. But I thought this was a common enough question that having a fact base (or a few opinions) posted could be helpful.

Thanks in advance for any advice!


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