What are the U.S. Classification and Reporting of Obligations for Indian and Dubai entities?

Mr Aman Reddy, an Indian based businessman migrates to the U.S. from India to live closer to his family.  He is a grantor of a Dubai based foundation that owns interests in 3 Indian limited liability partnerships and 2 private limited companies.

The foundation is a grantor trust under U.S. law because Mr Reddy may remove the trustee through the role of protector.

In addition to filing a form 1040 Mr Reddy will need to file forms 3520 and 3520-A with respect to the foundation, forms 5471 and 5472 with respect to the private limited companies and form 8865 with respect to the interests in the Indian limited liability partnerships.   Each of these forms will be attached to his personal income tax return.

As outlined in Case Study 1 the penalties for failure to timely files these information returns can be substantial.