IRS Form 926 – IRS Forms, Instructions, Pubs 2026 – In today’s global economy, U.S. taxpayers often engage in international transactions, including transferring property to foreign corporations. If you’re a U.S. citizen, resident, or entity involved in such transfers, IRS Form 926 is a critical reporting requirement to ensure compliance with U.S. tax laws. This form helps the IRS track outbound property transfers that could have tax implications under sections like 6038B, 367(d), and 367(e). In this SEO-optimized guide, we’ll cover everything you need to know about IRS Form 926, including its purpose, filing requirements, step-by-step instructions, and penalties for non-compliance. Whether you’re filing for the first time or seeking updates for tax year 2025, this article draws from official IRS sources to provide accurate, up-to-date information.
What Is IRS Form 926?
IRS Form 926, titled “Return by a U.S. Transferor of Property to a Foreign Corporation,” is used to report certain transfers of tangible or intangible property from a U.S. person or entity to a foreign corporation. The form ensures transparency in cross-border transactions that might otherwise defer or avoid U.S. taxation. Property transfers can include cash, stock, securities, inventory, intangibles like patents or goodwill, and other assets.
The primary purpose of Form 926 is to comply with Internal Revenue Code section 6038B, which mandates reporting for transfers described in sections 6038B(a)(1)(A), 367(d), or 367(e). For example, this includes contributions to a foreign corporation’s capital or exchanges in reorganizations. Post-2017 tax reforms under the Tax Cuts and Jobs Act (TCJA) expanded reporting, such as identifying transfers to non-controlled “specified 10%-owned foreign corporations” under section 245A.
Key changes from the TCJA include the repeal of the active trade or business exception under section 367(a)(3), requiring full gain recognition on tangible property transfers, and new rules for transferred loss amounts on foreign branch assets under section 91. As of 2026, there are no recent developments noted by the IRS, but always check IRS.gov for the latest revisions.
Who Must File Form 926?
Not every transfer to a foreign corporation requires Form 926. Filing is mandatory for:
- U.S. citizens or residents.
- Domestic corporations.
- Domestic estates or trusts.
- U.S. tax-exempt entities.
- U.S. partners in domestic partnerships (reporting their proportionate share of the transfer).
You must file if the transfer falls under section 6038B(a)(1)(A), such as in a section 351 exchange (contributing property for stock) or section 332 liquidation. For cash transfers, report if you hold at least 10% of the foreign corporation’s voting power or value after the transfer, or if the cash exceeds $100,000 in a 12-month period.
Spouses can file jointly if they submit a joint income tax return. If you’re a partner in a partnership making the transfer, you’re treated as the transferor for your pro rata share.
Exceptions to Filing Form 926
There are several scenarios where you don’t need to file:
- Transfers of stock or securities in a section 354 or 356 exchange (e.g., recapitalizations under section 368(a)(1)(E)) that don’t qualify as indirect transfers.
- Section 355 distributions of domestic corporation stock (unless to a non-U.S. distributee).
- Transfers under section 367(a) where post-transfer ownership is less than 5% and meets conditions like nonrecognition qualification, tax-exempt status, or fair market value (FMV) ≤ $100,000.
- Transfers ≥5% ownership but qualifying as tax-exempt or FMV ≤ $100,000 under specific regulations.
Always consult the instructions for full details on exceptions.
When and Where to File Form 926?
Form 926 must be attached to your income tax return (e.g., Form 1040, 1120, or 1041) for the tax year including the date of the transfer. If you’re part of a consolidated return group, file with the parent corporation’s return.
The due date aligns with your tax return deadline, including extensions. For corporations, this is typically the 15th day of the 4th month after the tax year ends (e.g., April 15 for calendar-year filers). File electronically if required, or mail to the address on your tax return instructions.
How to Fill Out IRS Form 926: Step-by-Step Instructions?
Form 926 has four parts, plus supplemental information. Download the latest version from IRS.gov. Here’s a breakdown:
Part I: U.S. Transferor Information
- Provide your name, address, and identifying number (SSN, ITIN, or EIN).
- Answer questions about the transferee (e.g., if it’s a specified 10%-owned foreign corporation not controlled).
- If you’re a corporation, detail section 361 transfers, existence post-transfer, consolidated group status, and basis adjustments.
- If a partner in a partnership, include partnership details and gain recognition.
Part II: Transferee Foreign Corporation Information
- Enter the foreign corporation’s name, identifying number (or reference ID), address, country code, and entity classification.
- Indicate if it’s a controlled foreign corporation under section 957.
Part III: Information Regarding Transfer of Property
This is the core section, divided into:
- Section A: Cash – Report cash transfers; skip the rest if cash is the only property.
- Section B: Other Property – Detail stock/securities, inventory, other property, or built-in loss property. Include date, description, FMV, basis, and recognized gain for each.
- Section C: Intangible Property (under section 367(d)) – List intangibles like patents or goodwill, with useful life, arm’s length price, basis, and income inclusion.
Answer additional questions on gain recognition agreements, foreign branch assets, and intangibles with extended useful lives.
Part IV: Additional Information
- Detail your interest in the transferee before/after the transfer.
- Describe the nonrecognition transaction type.
- Answer questions on gain recognition under sections 904(f), 1503(d), 987, entity classification changes, and section 367(e)(2) distributions.
Attach supplemental statements as required, such as transfer descriptions, chronologies, and arm’s length price explanations.
| Section | Key Data Required | Example |
|---|---|---|
| Part I | Transferor name, ID, transfer type | U.S. Corp XYZ, EIN 12-3456789, section 351 exchange |
| Part II | Transferee details | Foreign Corp ABC, Country: CA (Canada) |
| Part III – Cash | Amount transferred | $150,000 |
| Part III – Other Property | FMV, basis, gain | Stock: FMV $200,000, Basis $100,000, Gain $100,000 |
| Part IV | Ownership percentages | Before: 0%, After: 15% |
Penalties for Not Filing Form 926
Failure to file or providing incomplete/inaccurate information can result in a penalty of 10% of the FMV of the transferred property, up to $100,000 unless reasonable cause is shown. No cap applies for intentional disregard. Timely filing avoids these steep fines, so consult a tax professional if unsure.
Recent Updates and Changes to Form 926
The form was last revised in November 2018, with key post-TCJA updates including expanded intangible definitions (now covering goodwill under section 367(d)(4)) and mandatory income inclusion for transferred loss amounts on branch assets. For tax years 2025-2026, no major changes are reported, but verify on IRS.gov/Form926 for any announcements.
Conclusion: Ensure Compliance with IRS Form 926
Filing IRS Form 926 is essential for U.S. taxpayers transferring property to foreign corporations to avoid penalties and maintain tax compliance. By understanding who must file, how to complete the form, and key exceptions, you can navigate this process smoothly. For personalized advice, especially with complex transactions like intangibles or reorganizations, consult a qualified tax advisor. Download the form and instructions directly from the IRS website to get started today. Stay informed on international tax rules to protect your financial interests in a connected world.