Instructions For Schedule I (Form 1120-F) - 2017 (Page 2 of 10) in pdf

The adjusted basis or fair market

1.882-4(a)(3)(vi) need not enter

disallowance on Schedule I, lines 24a

amounts on Schedule I (other than for

through 24c are reportable on

value method for valuing its average

the published LIBOR election on

Schedule M-3 (Form 1120-F), Part III,

assets in Steps 1 and 2 of the

line 10d) in order to preserve an

line 26c, columns (b), (c), and (e).

computation (line 1 check boxes);

allocation method. If a taxpayer files a

The actual or fixed ratio in Step 2

Schedule P (Form 1120-F). Enter

protective return under Regulations

(line 6 check boxes);

amounts from Schedule P (Form

section 1.882-4(a)(3)(vi) and does not

The published 30-day LIBOR election

1120-F), lines 20, 18, and 15c on

file Schedule I to identify the relevant

for banks under the AUSBL method in

Schedule I, line 5, column (b); line 8,

elections under Regulations section

Step 3 (line 10 check box); and

column (b); and line 9, column (b);

1.882-5 for an applicable year, then the

The de minimis foreign currency

respectively, making any necessary

Director of Field Operations is

election under the Separate Currency

adjustments to comply with the rules in

authorized to make all applicable

Pools method in Step 3 (line 16b check

Regulations section 1.882-5.

allocation method elections on behalf of

box).

Assets and Liabilities Based on

the corporation for such applicable year

The corporation need only identify

if it is later determined that the taxpayer

Schedule L Set(s) of Books and

the protective election in the first year it

was engaged in trade or business within

Records

is required to be made under

the United States and had ECI during

Regulations section 1.882-5(a)(7) or in

Generally, the assets and liabilities

the year.

any year a taxpayer is eligible to adopt

required to be reported on Schedule L

or change an election and chooses to

are the total assets and liabilities

Note. Under Regulations section

do so for that year. For example, an

reflected on the set or sets of books of

1.882-5(a)(7), no interest expense

election to use the adjusted

the foreign corporation that give rise to

allocation elections may be made on an

U.S.-booked liability method or the

income effectively connected with the

amended return. In addition, the relief

separate currency pools method is an

corporation's trade or business within

for late tax elections provided under the

election that generally must be

the United States and to U.S.-booked

rules of Regulations section 301.9100-1

maintained for a minimum five-year

liabilities (as defined in Regulations

(and any guidance promulgated

period. However, the election available

section 1.882-5(d)(2)). The total assets

thereunder) is not available. An election

to foreign banks to use 30-day LIBOR

and liabilities reflected on such books

identified on line 1 of a change from a

under the AUSBL method in Step 3

include the third party U.S. assets (as

fair market value method to a previously

must be made each year. If a

defined in Regulations section

elected adjusted basis method for

corporation is subject to Regulations

1.884-1(d)) and third party liabilities

reporting U.S. assets is not effective

section 1.882-5 for the first time, the

(whether with related or unrelated

without advance consent of the

election is due with a timely filed return

parties), as well as the interbranch

Commissioner or his delegate. See

(excluding the additional extended

assets and liabilities and assets that

Regulations section 1.882-5(b)(2)(ii)(A).

period provided by Regulations section

give rise to noneffectively connected

Other Forms and Schedules

1.882-4(a)(3)) whether or not the

income in whole or in part. Such books

taxpayer files a protective return under

Related to Schedule I

reflect the assets of the foreign

Regulations section 1.882-4(a)(3)(vi).

corporation located in the United States

Form 1120-F, Schedule L, and

The protective election need not be filed

and all other of its assets used in its

Schedule M-3 (Form 1120-F). The set

with subsequent protective returns filed

trade or business within the United

or set(s) of books that give rise to

under Regulations section 1.882-4(a)(3)

States (other than its assets giving rise

U.S.-booked liabilities under

(vi) for any subsequent year to which

to effectively connected income under

Regulations section 1.882-5(d)(2) are

the minimum five-year period applies.

sections 864(c)(6) or (7)), as authorized

the same sets of books and records that

However, the indication of the election

under Regulations section 1.6012-2(g)

are reportable as of the tax year end on

with a protective return is only effective

(1)(iii). A foreign corporation may

Form 1120-F, Schedule L. They are

for a year that the corporation is

instead report its worldwide assets,

also the same sets of books and

engaged in trade or business within the

liabilities, and equity on Schedule L.

records that are used by foreign banks

United States. Accordingly, if a

to report income and expenses on

protective election is made for a first

If the foreign corporation has more

Schedule M-3 (Form 1120-F).

year protective return and in fact the

than one set of books and records

taxpayer is not engaged in trade or

relating to assets located in the United

Form 1120-F, Section III, Part II

business until the second year of activity

States or assets used in a trade or

(branch-level interest tax). The

within the United States, the protective

business conducted in the United

amount of interest expense from

election made in the first year is not

States, it must report the combined

Schedule I, line 24d is reportable on

effective for the corporation's second

amounts on Schedule L and must

Form 1120-F, Section III, Part II, line 7b.

year of activity because Regulations

eliminate asset and liability amounts

The amount of the allocation under

section 1.882-5 is not applicable to the

recorded between these books.

Regulations section 1.882-5 reportable

corporation until such second year. The

on Schedule I, line 23 is reportable on

Required Reporting on

elections used by a taxpayer for all

Form 1120-F, Section III, Part II, line 7c.

Schedule I

years in which it files Form 1120-F and

Schedule M-3 (Form 1120-F), Part III,

reports effectively connected income

Lines 1 through 9. Schedule I requires

lines 26b and 26c. The amount of

must be shown on Schedule I, including

disclosure of data and interest allocation

interest expense allocation reportable

years subsequent to the year in which

elections for all parts of the three-step

on Schedule I, line 23 is includible on

an election under Regulations section

formula under Regulations section

Schedule M-3 (Form 1120-F), Part III,

1.882-5(a)(7) is made.

1.882-5. On page 1, the corporation is

line 26b, columns (d) and (e). The

A corporation that files a protective

required to complete Step 1 (lines 1

amounts subject to deferral and

return under Regulations section

through 5) to determine its average U.S.

-2-

Instructions For Schedule I (Form 1120-F) - 2017 Page 2

Related Articles

Related forms

Related Categories