Form 5452

Form 5452

A form that a corporation files with the IRS to report distributions other than dividends to shareholders. An example of a non-dividend distribution is a return of capital. These distributions are sometimes not taxable.
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Form 5452, Corporate Report of Nondividend Distributions, is used to report nondividend distributions to shareholders.
Form 5452 -- Corporate Report of Nondividend Distributions.
8) If the information on Form 5452 is used in confirming the taxable income of the recipients of such nondividend distributions (rather than the payee's tax liability), consideration should be given to separating the information request from the corporate filing requirement (as is the case in respect of other information returns).
Corporations with accumulated earnings and profits (AE&P) must report nondividend (nontaxable) distributions on Form 5452, Corporate Report of Nondividend Distributions; thus, S corporations with AE&P appear to have to file Form 5452.
Evidently, Form 5452 must be filed by an S corporation only in,the year it has no AAA or previously taxed income (PTI) balance, and makes distributions in excess of its AE&P balance.
Because the corporation distributed an amount in excess of the AAA and AE&P, it must file Form 5452.
Micro will not be required to file Form 5452 in later years, because it has no AE&P and, thus, could not make a distribution under Sec.
Practice note: As was stated, corporations with AE&P must report certain distributions on Form 5452.
Problem: group must file Form 5452 (Corporate Report of Nondividend Distributions) if a nondividend distribution under section 301 or 1368(c)(3) of the Code is made to shareholders.
For such taxpayers, the filing of Form 5452 by a member of a consolidated group is burdensome, especially where it operates on a fiscal-year basis, and seems superfluous.
If a corporation is a member of a consolidated group and pays nondividend distributions to its parent, Form 5452 is required because of the various bases adjustments under Regulations sections 1.
The office of Income Tax and Accounting in Chief Counsel has instituted an earnings and profits study group that will make recommendations for the next revision of Form 5452, which we expect to be in 1991.