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OK online Form 5471 (Schedule J): What You Should Know

We begin with the Schedule J on page 1 and the Form 5471 Schedule J On Form 5471 page 1, click on the yellow box to the left of “Earnings and profits from continuing operations.” The text of the box begins appearing, but there are multiple tables in the box that display multiple columns of E&P On the table to the left of the box, the “Earnings & profits from continuing operations” tables are displayed The tables show the profits reported by the E&P line items on Form 1120, U.S. Income Tax Return and by line item on the income tax statement.  Note: This is the actual table in the box. The columns in the box are “E&P” to “Profit.” We now scroll through the table to the right (Form 5471).  We are taken to line item 721 and the box is shown as “Net income from continuing operations.” The number of columns in “Net income from continuing operations” table 723 totals 9. Note: On the next line we see “Compensation & Other Income,” but the box says “Other, net.” On the next row for line item 722 it says “Other” in two columns. At the bottom of line item 723 it says “Schedule J.” On line item 724, the text says “Schedule J.” We now scroll through line item 728 showing the “Net operating profit.” Line item 728 shows net operations and “Compensation & other income.” Line item 729 is a new line item. It states “Adjusted E&P.” We can see that the “Adjusted E&P” column is “Other, net.” We move down column 730 to table 732 (which is a list of lines where the “Adjusted E&P” column exceeds 200 percent of the amount in any of the remaining rows. Furthermore, we see that this line item is for “other expenses to continue operations,” and that “Adjusted E&P” is in the 200-percent range. Furthermore, we now scroll to line items 736, 737, and 743. Line item 744 says “Adjusted operating income.” Line item 746 tells us how much of this “adjusted operating income” is from “other, net.

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