Looking for a Form 1120 Templates? Download it for free!

Amounts treated as compensation.

income. See the instructions for line h of

paid by the RIC and received by each

Generally, the RIC may be able to deduct

the Built-in Gains Tax Worksheet

shareholder on December 31 of that

otherwise nondeductible entertainment,

Instructions on page 12.

calendar year provided that they are

amusement or recreation expenses if the

actually paid in January of the following

Line 28i. Backup withholding. If the

amounts are treated as compensation to

calendar year. Enter on line 3 all such

RIC had income tax withheld from any

the recipient and reported on Form W-2

dividends not already included on line 1

payments it received, because, for

for an employee or on Form 1099-MISC

or 2.

example, it failed to give the payer its

for an independent contractor.

Line 6. Enter the foreign tax paid

correct EIN, include the amount withheld

However, if the recipient is an officer,

in the total for line 28i. Enter the amount

deduction allowed as an addition to the

director, or beneficial owner (directly or

withheld and the words “Backup

dividends paid deduction under section

indirectly) of more than 10% of any class

Withholding” in the blank space above the

853(b)(1)(B). See the instructions for Item

of stock, the deductible expense is

line 28i.

10 of Schedule K for information on the

limited. See section 274(e)(2) and Notice

election available under section 853(a).

2005-45, 2005-24 I.R.B. 1228.

Line 29. Estimated tax penalty. A RIC

Line 7. If the RIC elects under Section

that does not make estimated tax

See section 274 and Pub. 463 for a

payments when due may be subject to an

853A to pass through credits from

more extensive discussion of these

underpayment penalty for the period of

qualified tax credit bonds to shareholders,

topics.

underpayment. See the instructions for

increase the dividends paid deduction by

Lobbying expenses. Generally,

Form 2220, Underpayment of Estimated

the amount of the credits distributed to

lobbying expenses are not deductible.

Tax by Corporations, for more

shareholders. To make the election, see

Examples of non-deductible expenses

information.

the instructions for item 11, under

include:

Schedule K — Other Information, on page

•

Amounts paid or incurred in connection

13.

with influencing federal or state legislation

Part II — Tax on

(but not local legislation) or

•

Undistributed Net Capital

Amounts paid or incurred in connection

Schedule B—Income From

with any communication with certain

Gain Not Designated

federal executive branch officials in an

Tax-Exempt Obligations

attempt to influence the official actions or

Under Section 852(b)(3)(D)

If, at the close of each quarter of the tax

positions of the officials. See Regulations

year, at least 50% of the value of the

section 1.162-29 for the definition of

Alternative tax on qualified timber

fund’s assets consisted of tax-exempt

“influencing legislation.”

gains. If the RIC is a partner in a

obligations under section 103(a), the RIC

partnership, had a net gain, and received

Dues and other similar amounts paid

qualifies under section 852(b)(5) to pay

a distributive share of a qualified timber

to certain tax-exempt organizations may

exempt-interest dividends for the tax year.

gain (as defined in section 1201(b)(2))

not be deductible. See section 162(e)(3).

from the partnership for the period that

Certain in-house lobbying expenditures

If this applies, check the “Yes” box on

began before May 23, 2009, the RIC may

that do not exceed $2,000 are deductible.

line 1 and complete lines 2 through 5.

be eligible for an alternative tax rate

See section 852(b)(5)(A) for the definition

For more information on other

under section 1201(b)(1) on the portion of

of exempt-interest dividends and other

deductions that may apply to RICs, see

its taxable income attributable to the

details.

Pub. 535.

qualified timber gain. Enter the alternative

tax, if any, on line 4, Part II. Attach a

Tax and Payments

statement showing the computation of the

Schedule J—Tax

Line 28b. Estimated tax payments.

tax. You may use Part II of the 2009 Form

1120-RIC as a guide.

Enter any estimated tax payments the

Computation

RIC made for the tax year.

Line 1

Line 28f. Credit from Form 2439. Enter

Schedule A—Deduction

the credit from Form 2439 for the RIC’s

If the RIC is a member of a controlled

share of the tax paid by another RIC or a

group, check the box on line 1 and

for Dividends Paid

Real Estate Investment Trust (REIT) on

complete and attach Schedule O (Form

undistributed long-term capital gains

Column (a) is used to determine the

1120), Consent Plan and Apportionment

included in the RIC’s income. Attach

deduction for dividends paid resulting

Schedule for a Controlled Group. See

Form 2439 to Form 1120-RIC.

from income derived from ordinary

Schedule O (Form 1120) and its

dividends.

instructions for more information.

Line 28g. Credit for federal tax on

fuels. Complete and attach Form 4136,

Column (b) is used to determine the

Line 2a–Tax on Investment

Credit for Federal Tax Paid on Fuels, if

deduction for dividends paid resulting

Company Taxable Income

the RIC qualifies to take this credit.

from income derived from capital gain

Line 28h. Refundable credits from

Members of a controlled group must use

dividends.

Forms 3800 and 8827. If the RIC

Schedule O (Form 1120) to figure the tax

Section 561 (taking into account

for the group. Most corporations that are

elected to claim certain unused research

sections 852(b)(7), 852(c)(3)(B), and

not members of a controlled group, and

or minimum tax credits instead of any

855(a)) determines the deduction for

do not file a consolidated return, figure

additional first-year special depreciation

dividends paid. Do not take into account

their tax by using the Tax Rate Schedule

allowance for eligible property, see the

exempt-interest dividends defined in

below.

instructions for Forms 3800 and 8827.

section 852(b)(5) or any amount reported

Enter on line 28h the amounts from line

For a RIC that is not a personal

for the tax year on Form 2438, line 9b.

19c of Form 3800 and line 8c of Form

holding company (PHC). A RIC in

See Regulations section 1.852-11 for

8827, if applicable.

compliance with Regulations section

information on post-October currency or

The RIC must use the refundable

1.852-6 regarding disclosure of the RIC’s

capital losses.

credits from Forms 3800 and 8827

actual stock ownership (members of a

to reduce any built-in gains tax

Line 3. Dividends, both ordinary and

controlled group should see the

CAUTION

derived from property that it owned when

capital gain, declared and payable to

instructions for Schedule O (Form 1120))

it was a C corporation, before the credits

shareholders of record in October,

is not a PHC and should compute its tax

can be used to reduce RIC taxable

November, or December are treated as

using the Tax Rate Schedule below:

-10-

Instructions For Form 1120-Ric - U.s. Income Tax Return For Regulated Investment Companies - Internal Revenue Service - 2010 Page 10

Related Articles

Related forms

Related Categories