INSTRUCTIONS: FOREIGN OPERATION OF U.S. CORPORATIONS SCHEDULE N

“Foreign Operation of U.S. Corporations Schedule N Step 1”

This form is fairly straightforward and asks a total of 7 questions. A corporation MUST file this form if they had assets in a foreign country or operated a business in a foreign country. If the corporation answers “Yes” to any of the questions listed above, they need to attach this form to their income tax return.

“Foreign Operation of U.S. Corporations Schedule N Step 2”

Normally a corporation is required to attach Form 8858 to this form, but there are exceptions. If the corporation owns an FDE indirectly or constructively through a foreign body, the corporation may not need to attach the form.

“Foreign Operation of U.S. Corporations Schedule N Step 3”

If you answered “Yes” to question 3, you need to attach a statement listing the following information for each foreign partnership:

· name and EIN of the foreign partnership

· information on which of the following the forms the partnership filed within the corporation’s tax year: Form 1042, 1065, 1065B, or 8804

· name of the tax matters partner

· beginning and ending dates of the partnership’s tax year

“Foreign Operation of U.S. Corporations Schedule N Step 4”

If the corporation answered “Yes” to question 5, they are required to file Form 3520 if:

· the corporation directly or indirectly transferred money or property to a foreign trust

· the corporation is treated as the owner of any part of the assets of a foreign trust under the grantor trust rules

· the corporation received a distribution from a foreign trust

“Foreign Operation of U.S. Corporations Schedule N Step 5”

You need to check “Yes” for question 6 if the corporation had a signature, an interest, or other authority over securities, a bank, or other financial account in a foreign country AND:

· combined value of accounts was more the $10,000

· the account was not with the U.S. military banking facility operated by the U.S.

OR

The corporation owns more than 50% of the stock in any corporation that would answer “Yes” to any of the conditions listed above. If this fact applies, enter the name of the foreign country and file Form TD F 90-22.1 on or before June 30, 2012.