How does Form 5472 separate rent from intangible-property royalties?
· 1 min read
Use lines 13a and 27a for rents involving property other than intangible rights. Lines 13b and 27b cover royalties other than intangible-property rights. Covered intangible-rights transactions use line 14 or 28.
What to check
A warehouse lease and a trademark license can have different reporting lines even if both are invoiced as rent. Lines 13 and 14 are on the receipt side. Lines 27 and 28 are on the payment side. For a bundled contract, document the rights and how any separate amounts were supported.
Example
A reporting corporation pays a foreign affiliate for a warehouse lease and separately pays to license its trademark. It reviews the lease under line 27a and the license under line 28.
Before you proceed
- List the property and rights granted.
- Check which side of Part IV applies.
- Reconcile the amounts to agreements and invoices.
Does the word royalty on the invoice determine the line?
Identify what the payment buys. A covered trademark license belongs with intangible rights even when its invoice calls the fee a royalty.
Related guides
- Where do foreign related-party service fees go on Form 5472?
- Where does related-party loan interest go on Form 5472?
- When does Form 5472 need a separate Part VIII for cost sharing?