The two-part test
A transaction is reportable only if both halves are satisfied. Founders usually get one half right and forget the other exists.
It is with a related party
The counterparty must be the owner, a 25% foreign shareholder, or someone connected to them under the relatedness rules. A stranger does not count.
It falls in a listed category
Money or value must have moved in one of the categories the form lists — or it must be a non-monetary transfer describable in Part VI.
The consequence is counter-intuitive and worth stating plainly: a company with a thousand unrelated customers may have fewer reportable transactions than one that never traded at all. The dormant company was funded by its owner. The busy one may only ever have dealt with strangers.
Who is a related party
For these purposes the related party is, broadly:
- Any direct or indirect 25% foreign shareholder of the reporting corporation
- The sole foreign owner of a foreign-owned US disregarded entity
- Any person related to the reporting corporation or to that shareholder under sections 267(b), 707(b)(1) or 482 of the Internal Revenue Code
Those cross-references pull in a substantial body of rules, but for a typical founder the practical list is short:
| Counterparty | Related party? | Note |
|---|---|---|
| You, the sole owner | Yes | The obvious and most common case. |
| Your foreign holding company | Yes | Whether it owns the LLC directly or through a chain. |
| Your spouse | Generally yes | Family relationships are within the relatedness rules. |
| Your parents, children or siblings | Often yes | Depends on the specific rule engaged. |
| Another company you control | Yes | Common control makes entities related to each other. |
| A business partner in an unrelated venture | Possibly | Fact-dependent. Worth checking if amounts are significant. |
| Your customers | No | Assuming genuinely unrelated. |
| Your registered agent, bank, accountant | No | Service providers at arm's length. |
| Freelancers you hire | No | Unless related to you by one of the rules above. |
Swipe the table sideways to see all columns
The transaction categories
The form groups reportable transactions into categories. Report the total for the year in each category, in US dollars.
Sales and purchases
Stock in trade, inventory, tangible property and other property sold to, or bought from, a related party.
Rents and royalties
Amounts paid or received for the use of property, including intellectual property licences, in either direction.
Services
Consideration paid or received for services performed between the entity and a related party — including work you invoice your own LLC for.
Interest
Interest paid or received on any loan between the entity and a related party.
Amounts loaned and borrowed
Loans in either direction, whether or not documented, whether or not interest-bearing.
Other amounts
Categories for amounts that do not fit the named lines but still moved between the entity and a related party.
The extra categories for disregarded entities
Part V, used by foreign-owned US disregarded entities, exists because the corporate categories in Part IV do not capture how an owner actually interacts with a single-member LLC. It reaches:
- Contributions to the entity — money or property put in by the owner or a related party, including the initial funding
- Distributions from the entity — money or property taken out
- Amounts paid by the owner on the entity's behalf — this is the sleeper, and the one that turns supposedly nil years into filing years
The everyday list nobody warns you about
- The $49 you paid the formation service on your own card
- The annual registered-agent invoice, paid from your personal account
- The state franchise fee, paid the same way
- The domain renewal and the software subscription for the business, on your card
- The transfer you made to fund the account before Stripe would approve you
- The $150 you moved back out to cover a personal bill
Non-monetary and less-than-full-consideration transactions
Not everything reportable is a payment. Part VI covers transfers of property that were not for money, and exchanges where what was given was worth less than what was received. These are described in words rather than totalled.
- Transferring an asset in for nothing — a domain, a trademark, a codebase, a customer list
- Contributing equipment instead of cash — a laptop, camera, tools, server
- Providing your own services free — running the business without charging it
- Letting the entity use your property rent-free — an office, a vehicle, software you licensed personally
- Selling something to the entity below its value, or buying something from it cheaply
Describe what moved, who moved it, in which direction and on what terms, with enough specificity that a reader understands the substance. "Owner transferred the domain example.com to the LLC at no charge in March" is a good entry. "Various" is not.
What is not reportable
It is worth being clear about the other side, because owners frequently over-report out of anxiety and end up filing a form that describes the wrong things.
- Revenue from unrelated customers. A million dollars of sales to strangers is not a reportable transaction.
- Payments to unrelated suppliers. Hosting, advertising, freelancers, accountants, banks.
- Payments to government. State fees and taxes paid by the entity from its own account.
- Internal movements. Transferring money between two of the entity's own accounts.
- Purely personal transactions. Something you did with your own money, unconnected to the entity.
The distinction is not the size of the amount or how business-like it feels. It is who was on the other side.
Practical questions: totals, currency, timing
Totals or individual transactions?
Totals by category for the tax year. Six separate transfers into the entity become one combined figure on the contributions line.
Keep the underlying detail in your own records, though — a schedule listing each transfer with its date, amount and source. If a figure is ever questioned, that schedule is the answer, and reconstructing it three years later from closed bank accounts is painful.
What if the transaction was not in US dollars?
Convert it. The instructions specify the approach; the practical requirements are consistency and evidence.
- Use a defensible rate from a recognised source
- Apply the same method across the whole form
- Use the same method next year, so figures are comparable
- Keep a note of the rates and where they came from
Which year does a transaction belong to?
The tax year in which the transaction occurred. For a calendar-year entity, that is the calendar year of the transfer.
Two edge cases worth attention. A transfer sent on 30 December and received on 2 January straddles the year end — pick a consistent basis and document which you used. And a loan made in one year that remains outstanding into later years may have continuing consequences beyond the year it was made, including interest. Where amounts are significant, ask a professional rather than guessing.
Let the questions find them
The questionnaire asks about each category by name
Rather than deciding which line each amount belongs on, you answer plain questions — "capital you contributed", "entity expenses you paid personally" — and the categories are filled in for you. Read the finished document free before deciding anything.
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Questions
Is money I put into my own LLC a reportable transaction?
Yes. Money or property contributed to the entity by its owner is a capital contribution, and for a foreign-owned disregarded entity that is a reportable transaction reported in Part V of Form 5472. This applies to the initial funding used to open a bank account and to every later top-up, however small.
Are sales to unrelated customers reportable on Form 5472?
No. Form 5472 reports transactions with related parties only. Revenue from unrelated customers, payments to unrelated suppliers and fees paid to unrelated professionals are not reportable transactions, no matter how large. This surprises people because it means a busy trading company can have fewer reportable transactions than a dormant one.
Is there a minimum amount below which a transaction is not reportable?
The statute provides no general de minimis exception for the existence of a filing obligation. A single small transaction with a related party can be enough to require a Form 5472. Amounts are reported in US dollars, and small figures are reported as small figures rather than ignored.
Do I report each transaction separately or a total for the year?
Totals by category for the tax year. If you transferred money into the entity on six occasions during the year, you report the combined amount on the contributions line rather than six separate entries. Keep the underlying detail in your records in case the figure is ever questioned.
How do I report a transaction that was not in US dollars?
Convert it to US dollars. The instructions specify the approach to be used; the practical requirements are to apply a defensible exchange rate, to be consistent across the form and between years, and to keep a record of the rates used and their source.
I paid myself a salary from the LLC. Is that reportable?
A payment to yourself from your own single-member LLC is generally a distribution rather than a salary, because a disregarded entity's owner is not its employee for these purposes. Either way it is a payment to a related party and is reportable — the question is only which category it belongs in. If you have been running payroll for yourself through a foreign-owned single-member LLC, that arrangement is worth reviewing with a US tax professional for reasons well beyond Form 5472.
Scope & limitations
This page is general educational information and is not tax, legal or accounting advice. The statutory definitions of related parties and reportable transactions are detailed and their application is fact-specific. Category names and line placement change between form revisions.
Content reflects the IRS Form 5472 and its instructions as reviewed in 2026. Verify against IRS.gov and consult a qualified US tax professional where any counterparty's status or any amount's treatment is unclear.