Form 926 for U.S. Expats

Return by a U.S. Transferor of Property to a Foreign Corporation

Transferring your family farmland in France to a property developer doesn’t happen every day, but it is an example of one of many types of transactions required to be reported on Form 926. Any time you transfer property to a foreign corporation—whether that’s a family chateau in the Alps or the now-shuttered Tokyo branch of your U.S. company—you may have to report it using this form.

What is IRS Form 926?

man on balcony in Germany filing IRS form 926 online

IRS Form 926 is the form U.S. citizens and entities file to report certain exchanges or transfers of property to a foreign corporation. This would include transfers of cash over $100,000 to a foreign corporation, or if the transfer of cash resulted in owning more than 10% of the foreign corporation’s stock.

Many questions we commonly get from U.S. expats are about the Form 926 statute of limitations. The IRS maintains a statute of limitations on penalties for failing to file a number of forms, meaning they can’t punish you for failing to file after a certain amount of time has passed. Form 926 is one of the forms that (in certain circumstances) has no statute of limitations — meaning they are still able to penalize you after 5, 10, and even 20 years have passed.

The penalties for not filing can be pretty steep. For example, if you fail to file tax Form 926 and you’re supposed to, you can be fined 10% (up to $100,000) of the market value of the property you transferred. Not only that, but you also may get hit with a 40% penalty on any underpayment from an undisclosed foreign financial asset understatement.

These Form 926 penalties are just two examples of why it’s so important to have a seasoned tax pro handle your taxes — they’ll spot filing requirements you may not have even known you had, saving you a headache in the future.

Who files Form 926?

If you’re a U.S. citizen or U.S. corporation, estate, trust, or partnership and you’ve made a property transfer to a foreign corporation in exchange for stock, you likely have to file IRS Form 926.

The rules surrounding Form 926 get extremely detailed and complicated, and we’ve only scratched the surface on the technicalities of who files and when. Because of all these intricacies, it’s smart to leave your tax filing to an expert who knows the rules backwards and forwards.

How to file Form 926 with H&R Block

You may be asking yourself if you can e-file Form 926. With H&R Block’s Expat Tax Services, you can file form 926 online. Simply upload your documents to your expat tax portal and we’ll take care of the rest.

Need help filing Form 926? H&R Block’s Expat Tax Services is here to help.

Form 926 is one of the more complicated forms with dozens of technicalities and stipulations. To avoid a penalty and get peace of mind your taxes are done right, start with H&R Block’s Expat Tax Services. Your tax advisor will pick through your documents with a fine-tooth comb, making sure all the details are accurate before filing. Get started today!