What counts as a reportable transaction on Form 5472

A reportable transaction on Form 5472 is any monetary or non-monetary exchange between the US LLC and a related party — including capital contributions, distributions, loans, expense reimbursements, and property transfers (IRS, Form 5472 instructions, Part IV). The list is broader than most non-US founders expect, and missing categories is the most common preparation mistake.

This guide walks through what counts, what doesn't, and where on Part IV of the form each category goes.

Who counts as a "related party"

For a foreign-owned single-member LLC, the related parties are:

• You, the foreign owner.
• Anyone in your immediate family — spouse, parents, children, siblings.
• Any other entity you own 25% or more of, anywhere in the world.
• Any entity that owns 25% or more of you (relevant if you hold the LLC through a holding company).
• Any entity under common control with you.

Most non-US solo founders only need to think about themselves. If you hold the LLC through a foreign holding company or have other entities, the related-party map gets more involved.

What the IRS counts as reportable

Capital contributions (Part IV, line 7)

Money or property you contributed to the LLC. This is the category that catches most first-year filers. Examples:

• The initial deposit you put into the LLC's bank account.
• Personal funds you used to pay the state formation fee or annual report.
• Equipment or software you transferred from yourself to the LLC.

Distributions (Part IV, line 8)

Money or property the LLC paid to you. Examples:

• Owner draws — any time you moved money from the LLC bank account back to yourself.
• The LLC reimbursing you for an expense (this can also be classified as a reimbursement; see below).
• Non-cash property the LLC transferred to you.

Loans (Part IV, lines 9–14)

Money lent in either direction between you and the LLC.

• A loan from you to the LLC to cover early expenses.
• A loan from the LLC to you (less common but possible).
• Interest charged on either side.

Expense reimbursements

The LLC paying you back for business expenses you fronted on a personal card. If you booked a flight to a US trade show on your personal Visa and the LLC later wired you the amount, that's a reportable reimbursement.

Sales and purchases (Part IV, lines 1–6)

Goods, services, rents, royalties, or interest paid between the LLC and you. Most solo founders don't have these; they apply more often to founders running multiple entities.

"Other amounts" (Part IV, line 20)

Catch-all for transactions that don't fit the other categories. The IRS instructions explicitly say to include anything else exchanged.

What does not count

A few transactions specifically do not need to be on Part IV:

• Transactions strictly between the LLC and third parties — customers, suppliers, software vendors, etc. The form only cares about related-party flows.
• Stripe / PayPal payouts to the LLC from customers — third-party, not reportable.
• State filing fees paid directly by the LLC from its own bank account, with no involvement from you personally — not reportable (paid by you on the LLC's behalf would be).
• The LLC's own operating expenses paid to vendors — software subscriptions, hosting, freelancers — not reportable to the IRS on Form 5472 (these get tracked separately if you do a US tax return, which most foreign-owned disregarded LLCs do not).

How to figure out what you have to report

Two-step audit:

1. Pull the LLC's bank statements for the year. Anything that moved from your personal account into the LLC is a contribution. Anything that moved from the LLC back to you is a distribution (or a reimbursement).
2. Cross-check your personal card. Did you pay for anything on behalf of the LLC and not get reimbursed? Did you pay for anything and the LLC did reimburse you? Both go on the form.

For most non-US solo founders in their first year, the only reportable transaction is the initial capital contribution that opened the bank account. That single line on Part IV is enough to make the form required.

How precise do the amounts have to be?

The IRS instructions say to round to whole US dollars and report aggregate amounts per category — you don't need to itemize every individual transfer. So "Contributions: $5,000" is fine; you don't need to list each wire individually.

Convert from foreign currency to USD using the exchange rate on the date of each transaction, or use an average annual rate (the IRS publishes yearly averages). Be consistent across the year.

The conservative rule

When in doubt, include the transaction. Over-reporting carries no penalty. Under-reporting can be characterized as a failure to file a complete Form 5472, which triggers the same $25,000 per-form penalty as not filing at all.

Snapfile asks the questions that surface the categories most filers miss — capital contributions, reimbursements, loans — and slots the totals into the right Part IV lines automatically. Start a filing.