Less Common Tax Documents You Should be Aware Of

K-1s are crucial for family offices, but there are several other tax documents that are equally important yet sometimes overlooked. Let's explore.

Form 8621 - Information Return by a Shareholder of a Passive Foreign Investment Company (PFIC) or Qualified Electing Fund (QEF):

This form is critical for family offices with investments in foreign mutual funds or certain foreign corporations. It's often overlooked because many investors don't realize their foreign investments qualify as PFICs.

Failure to file can result in significant penalties and affect the tax treatment of gains.

Form 926 - Return by a U.S. Transferor of Property to a Foreign Corporation:

Required when a U.S. person transfers property to a foreign corporation.
Important for family offices engaged in international estate planning or restructuring.

Overlooking this form can lead to penalties of up to 10% of the value of the property transferred.

Form 8938 - Statement of Specified Foreign Financial Assets:

This form is required for reporting foreign financial assets if they exceed certain thresholds.

It's in addition to the FBAR (FinCEN Form 114) and has different reporting requirements. Many family offices may focus on FBAR compliance but overlook Form 8938.

Form 3520 and 3520-A - Annual Return To Report Transactions With Foreign

Trusts and Receipt of Certain Foreign Gifts: Crucial for family offices involved with foreign trusts or receiving large foreign gifts.

Form 3520-A is specifically for foreign trusts with U.S. owners.
These forms are often missed, leading to substantial penalties

Form 8865 - Return of U.S. Persons With Respect to Certain Foreign Partnerships:

Required for U.S. persons with significant interests in foreign partnerships.
Important for family offices with offshore investment structures.
Often overlooked due to complex filing requirements and thresholds

Form 1116 - Foreign Tax Credit:

While more commonly known, its complexity often leads to suboptimal filing.
Crucial for family offices with significant foreign investments to avoid double taxation.

Proper planning around this form can lead to substantial tax savings.

Form 8992 - U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI):

A relatively new form resulting from the 2017 Tax Cuts and Jobs Act. Important for family offices with ownership in Controlled Foreign Corporations (CFCs).

Often overlooked due to its recent introduction and complexity.

Schedule UTP - Uncertain Tax Position Statement:

Required for certain large corporations to disclose uncertain tax positions.
While not applicable to all family offices, it's crucial for those structured as corporations with assets exceeding $10 million.

Often overlooked due to its specialized nature.

All of these forms are particularly important because:

• They often carry significant penalties for non-compliance.
• They provide crucial information for comprehensive tax planning.
• They're frequently subject to heightened IRS scrutiny.
• Proper handling can lead to tax savings and risk mitigation.

For family offices, being aware of and properly managing these forms is crucial for maintaining tax compliance, optimizing tax strategies, and avoiding costly penalties. A robust wealth management platform that can track and manage these various forms, alongside K-1s, would be incredibly valuable for ensuring comprehensive tax compliance and reporting.

Ready to take the headache out of K-1 season? Copia can help by putting your Assets Under Intelligence™.