Accounting for a US subsidiary of a foreign parent: books, a US bank and Form 5472 records
A US company owned by a foreign founder or parent needs books in dollars, a US bank connected, and a dated record of every dollar that moves between it and its owner, because Form 5472 reports those transactions and a missed form costs $25,000. Accountable keeps the books, connects US banks, and records owner funding and loans as entries your CPA can read. Your CPA files the form.
Updated · 4 min read · By the Accountable team
The short version
- A US corporation at least 25% foreign-owned, or a US LLC wholly owned by a foreign person, files Form 5472 when it has a reportable transaction with a related party.
- Contributions, loans, interest and fees between the company and its foreign owner are reportable, so each needs a date, an amount and its own entry.
- The penalty is $25,000 for each form not filed on time, and a substantially incomplete form counts as not filed.
- Accountable keeps the books in the company's own currency, connects Mercury, Brex, Ramp and Stripe free, and gives your CPA a package once the year is closed.
- Accountable does not prepare or file Form 5472; the books give your CPA the transactions to report.
Form 5472 reports the owner's money, so the books must show it
The IRS defines a reporting corporation as a US corporation that is at least 25% foreign-owned, including a US LLC wholly owned by a foreign person. It files Form 5472 for each related party it had a reportable transaction with, attached to its income tax return, which is due April 15 for a calendar-year company. A wholly foreign-owned LLC files a pro forma Form 1120 with the form attached.
Failing to file costs $25,000 per form, and $25,000 more for each 30 days after 90 days from an IRS notice. Reportable transactions include amounts borrowed, interest paid, consideration for services and, for a foreign-owned LLC, contributions and distributions. The worked case, with a Delaware LLC owned from Brazil, is in Form 5472 for a foreign-owned US LLC or subsidiary.
Record each owner transaction as its own dated entry
Post each transaction between the company and its owner as its own entry under Accounting › Journal entries, with the date, amount and a memo, so the general ledger you export for your CPA lists them one by one. Every entry can be reversed or undone, and every change shows who made it.
| What happened | How to record it | Why your CPA needs it |
|---|---|---|
| The owner wires the company $40,000 | A journal entry: debit the bank, credit equity as a contribution | Contributions are reportable for a foreign-owned LLC |
| The owner lends the company $20,000 | A journal entry: debit the bank, credit a loan from the owner | Amounts borrowed are reportable |
| The company accrues 5% interest on the loan | A journal entry: debit interest expense, credit interest payable | Interest paid or accrued is reportable |
| The company pays the owner $3,000 for consulting | A bank transaction categorized as consulting expense, with the owner named as the vendor | Consideration for services is reportable |
If the parent is also a company in your workspace, a New intercompany entry posts both sides at once, with the types Capital contribution, Loan advance, Loan repayment, Loan interest and Management fee. Record money between your companies has the steps.
A US bank and books in dollars are set up in one place
When you create the company you set its Country, Entity type and Books kept in, the currency of its own bank account and tax returns. A US company keeps its books in US dollars. Accounts in other currencies post at the day's exchange rate, and the difference is booked as a gain or loss.
Mercury, Brex, Ramp and Stripe connect directly and free on every plan. Any other bank links through Stripe, Plaid or Teller, and Free includes 3 of those links, or upload the statements. You sign in inside your bank's own window, and Accountable never sees your bank password.
Close each month, then hand your CPA one package
Close every month of the year, and Tax › Return has the year's package for your CPA, ready to download once the year is closed. Tax shows for companies registered in the US. Invite your CPA too: an Accountant seat is free on every plan and never counts toward your plan.
The dates that come with a Delaware corporation, franchise tax and the annual report due March 1, are in Delaware franchise tax for startups and the dated startup tax calendar.
Step 1: Create the US company, choose its entity type and set its books to US dollars.
Step 2: Connect the US bank and Stripe, or upload statements.
Step 3: Post each owner contribution, loan and fee as its own entry, dated the day the money moved.
Step 4: Close each month, then download the tax package when the year is closed and send it to your CPA.
Questions founders ask
Does Accountable file Form 5472?
No. Accountable keeps the books and gives your CPA the package and the general ledger. The form is prepared and filed by your CPA or you, with the return.
Which transactions with my foreign owner are reportable?
The IRS form lists amounts borrowed, interest paid, rents, royalties, consideration for services and other amounts paid or received, and for a foreign-owned LLC, contributions and distributions. Your CPA decides what goes on the form for your company.
Can my books be in a currency other than dollars?
A company's books are kept in one currency, set when you create it and fixed once it has entries. A US company usually keeps dollars. Accounts in other currencies post at the day's rate.
Can the foreign owner see the books?
Yes. Invite them by email under Settings › Members and roles and pick a role. Owners, admins, accountants and viewers have different powers, and viewers and accountants never count toward your plan.
Books your CPA can file from
Start free with one company. Keep US-dollar books, record every owner transaction as its own entry, and hand your CPA one package at year-end.
Start freeSources, checked September 30, 2026: