The $1 Contribution Trap: Why Your LLC Must File Form 5472

Yes. If you are a foreign owner and you put any money into your US single-member LLC, even $1 to open its bank account, that capital contribution is a reportable transaction. The LLC generally must file Form 5472 with a pro forma Form 1120 for that year, even if it earned nothing.

Last reviewed September 23, 2026

Many foreign founders assume Form 5472 is only for LLCs that made money. So they form the LLC, move a small amount into the new bank account and file nothing. That small deposit is often the reason a filing was required.

This post explains why, what else counts, and what to do if it's already happened to you. To check your own years, use the free Form 5472 Checker.

Why does a $1 contribution trigger Form 5472?

Three rules combine:

1. Your LLC is treated as a corporation for this purpose. A US single-member LLC with a foreign owner is treated as a domestic corporation for IRC section 6038A, the law behind Form 5472 (Treas. Reg. §301.7701-2(c)(2)(vi)). This applies to tax years beginning after December 31, 2016, and ending on or after December 13, 2017.
2. Contributions are listed as reportable. For foreign-owned disregarded entities, Part V of Form 5472 covers amounts paid or received "in connection with the formation, dissolution, acquisition, and disposition of the entity, including contributions to and distributions from the entity" (Treas. Reg. §1.6038A-2 and the Instructions for Form 5472).
3. There's no minimum amount. The regulations don't set a dollar threshold below which a contribution stops counting.

So whether you move $1 or a much larger amount from your personal account into the LLC's account, you have made a capital contribution to a foreign-owned DE. That is a reportable transaction, and the LLC generally must file Form 5472 with a pro forma Form 1120 for that year.

Income doesn't matter. The pro forma 1120 doesn't compute tax. It exists to carry the Form 5472 information to the IRS.

What other "small" transactions count?

The $1 deposit is the classic example, but several other everyday actions are reportable too.

The last row is the exception, and it rarely applies to the formation year. Someone had to pay to form the LLC, and if that was you, the payment is reportable.

Is the formation year always a filing year?

Almost always. Consider a typical path:

• You pay a formation service with your personal card. That's an amount paid in connection with formation.
• You deposit an opening balance into the new LLC bank account. That's a contribution.
• You pay for the first year of a registered agent. That's the owner paying an LLC expense.

Any one of these is enough. That's why the Form 5472 Checker flags the formation year whenever you tick contributions or formation fees paid personally.

What if I only put money in once?

Then the requirement may apply only to the year you put it in, as long as nothing else moved between you and the LLC in later years. Look at each year separately:

• Year 1: you funded the account. Required.
• Year 2: the LLC paid you a distribution. Required.
• Year 3: the LLC had sales, but you didn't add money, take money or pay any LLC bills. Possibly not required, though check for services, loans or expenses carefully.

Keep in mind that the LLC must keep records supporting its Form 5472 (Treas. Reg. §1.6038A-3). A clear record of each transfer makes the yearly answer easy.

What does missing it cost?

The penalty under IRC §6038A(d) is $25,000 for each tax year beginning after December 31, 2017 in which a required Form 5472 isn't filed when due, or is filed substantially incomplete. The amount was $10,000 for tax years beginning before 2018. The IRS applies it per related party, which for a typical single-owner LLC means per form, per year.

If the failure continues more than 90 days after the IRS mails a notice, an additional $25,000 can apply for each 30-day period, or part of one. There is no statutory maximum.

These are maximum amounts. Relief may be available for reasonable cause under Treas. Reg. §1.6038A-4(b), including a "liberal" application for small corporations that didn't know about the requirement, have limited US presence and promptly comply with IRS requests. Relief isn't automatic, and it is decided case by case.

How do I file for the year I made the contribution?

For a calendar-year LLC, the form is due with a pro forma Form 1120 by the 15th day of the 4th month after year end:

• Tax year 2025: April 15, 2026 (October 15, 2026 if you filed Form 7004 by April 15, 2026)
• Tax year 2026: April 15, 2027 (October 15, 2027 with Form 7004)

A foreign-owned DE can't e-file. Fax the pro forma 1120 with Form 5472 attached (300 DPI or higher) to 855-887-7737, or mail it to Internal Revenue Service, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden, UT 84201. Write "Foreign-owned U.S. DE" across the top of the Form 1120. The LLC also needs its own EIN.

The full walkthrough is in our Form 5472 pillar guide. If the deadline has already passed, read Missed Form 5472? Your Options. If you're wondering whether you personally need a US income tax return too, see Form 5472 vs 1040-NR.

How can I avoid the trap next year?

• Log every transfer between you and the LLC as it happens: date, amount and direction.
• Pay LLC costs from the LLC account where you can, so fewer owner-paid expenses need tracking.
• Put the filing date in your calendar: April 15 for calendar-year LLCs, or file Form 7004 by then.
• Get help if the year was messy. Our global services team works with foreign founders, and our Form 5472 + Pro Forma 1120 Filing service is a fixed price, quoted upfront.

Frequently asked questions

Does a $1 deposit really count as a reportable transaction?

Yes. Contributions to a foreign-owned disregarded entity are reportable under the Form 5472 rules, and the regulations don't set a minimum amount. The year you fund the LLC's bank account is usually a filing year.

My formation service paid the state fee. Is that reportable?

If you paid the formation service, you paid formation costs for the LLC, and amounts paid in connection with formation are reportable for a foreign-owned DE. Check who actually paid, and from which account.

If my LLC had no sales, do I still file?

If there was a reportable transaction, such as a contribution, an owner-paid expense or a distribution, yes. Having no sales doesn't remove the requirement.

Do I need a separate Form 5472 for each contribution?

No. You report the year's transactions with each related party on one Form 5472 for that party. You need separate forms only for separate related parties, such as you personally and a foreign company you own that also dealt with the LLC.

I funded the LLC in 2024 and never filed. What now?

For a calendar-year LLC, the 2024 form was due in 2025 (the 15th day of the 4th month after year end, or six months later with a Form 7004 extension), so it is now late. Most people file the missing form and consider, with a professional, whether a reasonable-cause statement applies. Our missed Form 5472 guide explains the options.

Sources

• Treas. Reg. §1.6038A-2 (reportable transactions): https://www.ecfr.gov/current/title-26/section-1.6038A-2
• Instructions for Form 5472 (Rev. December 2024): https://www.irs.gov/instructions/i5472
• Treas. Reg. §301.7701-2: https://www.ecfr.gov/current/title-26/section-301.7701-2
• IRC §6038A: https://www.law.cornell.edu/uscode/text/26/6038A
• Treas. Reg. §1.6038A-4: https://www.ecfr.gov/current/title-26/section-1.6038A-4

This guide provides general information for educational purposes and is not tax, legal or accounting advice. Consult a qualified professional before acting.