Form 926

Return by a U.S. Transferor of Property to a Foreign Corporation, required by §6038B. It is triggered by contributing property — cash included — to a foreign corporation in an exchange described in §§332, 351, 354, 356 or 361, which in practice means it appears when a US person incorporates or capitalises a company abroad. Cash transfers are reportable when they exceed $100,000 in a twelve-month period or leave you holding at least 10% of the corporation. The §6038B(c) penalty is 10% of the fair market value of the property transferred, capped at $100,000 unless the failure was due to intentional disregard, in which case the cap disappears. Transfers of appreciated property can also trigger gain recognition under §367, which turns off the non-recognition rules that would otherwise apply domestically.