1065-US: Form 5471 exchange rate (FAQ)

Alerts and notices
Leave feedback

Internal Employees: Submit feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.

Characters left:

Change to CS Support service hours

Our Support department is closed on [[date]]. However, limited UltraTax CS phone support is available on that date from 9 AM - 5 PM ET due to the approaching deadline.

Links to our most popular tax processing topics are available in the Alerts and notices section on the right side of most pages.


What exchange rate is being used on Form 5471?


Per the Form 5471, Page 4 instructions for Reporting Exchange Rates on Form 5471, "When translating amounts from functional currency to U.S. dollars, you must use the method specified in these instructions … But, regardless of the specific method required, all exchange rates must be reported using a 'divide-by convention' rounded to at least four places. That is, the exchange rate must be reported in terms of the amount by which the functional currency amount must be divided in order to reflect an equivalent amount of U.S. dollars. As such, the exchange rate must be reported as the units of foreign currency that equal one U.S. dollar, rounded to at least four decimal places. Do not report the exchange rate as the number of U.S. dollars that equal one unit of foreign currency."

Therefore, UltraTax CS uses the "divide-by convention" (in other words, the units of foreign currency that equal one U.S. dollar) to translate amounts entered in the various screens in the 5471 folder to U.S. dollars. UltraTax CS will also display this "divide-by convention" exchange rate on Form 5471, Schedule H and Schedule M.

Related topic: Form 5471 FAQs (1065)

Share This