When do I need to file Form 926 for foreign investments? Quick question

The good news is you're almost certainly not required to file Form 926 in your situation. Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) generally applies when you directly transfer property to a foreign corporation, but there are special rules for transfers through partnerships. For transfers through a partnership like your PTP, you only need to file Form 926 if you own 5% or more of the partnership OR if the value of the property transferred exceeds $100,000. Since you own only 0.00003% of the partnership, unless the transfer value attributable to your portion exceeds $100,000 (which seems unlikely with such a small ownership percentage), you shouldn't need to file Form 926. The partnership itself would handle any Form 926 filing requirements for this transaction. This is one of the benefits of investing through a PTP - they handle many of these reporting requirements at the entity level.

I had a similar situation with foreign investment reporting and was totally overwhelmed trying to figure out which forms I needed. I ended up using taxr.ai (https://taxr.ai) and it was seriously a game-changer. I uploaded my documents and it analyzed everything, telling me exactly which foreign investment forms I needed to file and which ones I could skip. For your Form 926 question, it would definitely clarify whether you need to file or not based on your specific situation and documents. It also explains WHY you do or don't need to file certain forms, which helped me understand the whole foreign investment reporting thing much better.

Just wanted to update that I tried taxr.ai after my initial skepticism. I uploaded my K-1 from a similar PTP with foreign investments, and it immediately flagged that I didn't need Form 926 but DID need Form 8621 for a PFIC that was buried in the supplemental info. My previous tax software completely missed this. The analysis explained exactly why Form 926 wasn't required (ownership below 5% and transfer value below threshold) but why the PFIC reporting was mandatory regardless of ownership percentage. Honestly saved me from what could have been a major headache with the IRS. The site also generated a report I could keep with my tax records explaining the determination.

If you want peace of mind, you should call the IRS to confirm directly. I know that sounds impossible - I spent 3+ hours on hold last month trying to ask about foreign reporting forms. Then I found Claimyr (https://claimyr.com) - you enter your number on their site and they call you when an IRS agent is on the line ready to talk. There's a demo video here: https://youtu.be/_kiP6q8DX5c Getting a direct answer from the IRS about Form 926 would eliminate any uncertainty. They connected me with an international tax specialist who answered all my questions about foreign reporting requirements. Worth every minute saved not listening to that awful hold music!

Ok I need to eat my words and apologize to the person who recommended Claimyr. I was SUPER skeptical but I was desperate to get answers about my foreign account reporting, so I tried it. I expected it to be a scam but 27 minutes later my phone rang and I was talking to an actual IRS international tax specialist. The agent confirmed exactly what others here said - with a 0.00003% ownership in the PTP, Form 926 isn't required. She also mentioned that the PTP itself would handle any required 926 filing for the transfer to the foreign corporation. Saved me hours of research and uncertainty. Sometimes the direct answer from the IRS is worth it for peace of mind, especially with these complex foreign reporting requirements.

One additional thing to watch for with PTPs is that they sometimes invest in PFICs (Passive Foreign Investment Companies) which triggers Form 8621 filing requirements. Unlike Form 926, the PFIC reporting requirements apply regardless of your ownership percentage. Check the footnotes and supplemental information with your K-1 carefully. Many tax software programs miss these foreign reporting requirements, especially with partnership investments. I learned this the hard way last year!

Form 926 is literally the worst! I had to file one last year when I transferred some crypto to a foreign exchange and the form is insanely complicated. Took me forever to figure out.

Great question! Based on the information you've provided, you should be in the clear regarding Form 926. With only a 0.00003% ownership stake in the PTP, you're well below the 5% threshold that would trigger Form 926 filing requirements for partnership-mediated transfers to foreign corporations. The key thing to understand is that Form 926 requirements for transfers through partnerships have specific ownership thresholds precisely to avoid burdening small investors like yourself with complex reporting requirements. The partnership itself handles the heavy lifting on foreign reporting at the entity level. However, I'd echo what others have mentioned - do keep an eye on your K-1 supplemental information for any PFIC reporting requirements (Form 8621). These can apply regardless of ownership percentage and are easy to miss if you're not specifically looking for them. PTPs sometimes invest in foreign funds that qualify as PFICs, and the reporting requirements are completely separate from Form 926. Your instinct to double-check is smart though - foreign reporting penalties can be steep, so it's always better to be cautious when you're unsure!