A Japanese corporation owned by eleven U.S. individuals cannot be treated as a controlled foreign corporation for U.S. tax purposes.
For a corporation to be a CFC, it must be owned more than 50 percent by U.S. persons owning at least 10 percent of the corporation. One of the individuals could own more than 50 percent of the stock, making the corporation a CFC.

Question

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For a corporation to be treated as a CFC, it must be owned more than 50 percent by U.S. persons owning at least 10 percent of the corporation. In this scenario, only 11 individuals own the corporation, and no one owns more than 50 percent, so it cannot be treated as a CFC for U.S. tax purposes.

A Japanese Corporation Owned by Eleven U