Instructions For Form 1120-Pc - 2002 (Page 9 of 20) in pdf

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owe a tax. See Form 8611, Recapture of

benefit of the deduction. These payments

The annualized income or adjusted

Low-Income Housing Credit.

must be made on or before the due date

seasonal installment method is used or

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(without regard to extensions) of this tax

The corporation is a large corporation

Other. Additional taxes and interest

return. See Form 8816 and section 847(2)

computing its first required installment

amounts may be included in the total

for additional information.

based on the prior year’s tax. See the

entered on line 12. Check the box for

Instructions for Form 2220 for the

“Other” if the corporation includes any of

Tax benefit rule. Section 847(8)

definition of a large corporation.

the taxes and interest discussed below.

requires that if a corporation carries back

If you attach Form 2220, be sure to

See How to report below, for details on

net operating losses or capital losses that

check the box on line 15, and enter the

reporting these amounts on an attached

arise in years after a year in which a

amount of any penalty on that line.

schedule.

section 847 deduction was claimed, then

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Line 18. Direct deposit of tax refund of

Recapture of qualified electric vehicle

the corporation must recompute the tax

$1 million or more. If the corporation

(QEV) credit. The corporation must

benefit attributable to the previously

wants its refund of $1 million or more

recapture part of the QEV credit claimed

claimed section 847 deduction taking into

directly deposited into its checking or

in a prior year, if, within 3 years of the

account the loss carrybacks. Tax benefits

savings account at any U.S. bank or other

date the vehicle was placed in service, it

also include those derived from filing a

financial institution instead of having a

ceases to qualify for the credit. See

consolidated return with another

check sent to the corporation, complete

Regulations section 1.30-1 for details on

insurance company (without regard to

Form 8302 and attach it to the

how to figure the recapture.

section 1503(c)).

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corporation’s tax return.

Recapture of Indian employment credit.

Therefore, if the recomputation

Generally, if an employer terminates the

changes the amount of the section 847

employment of a qualified employee less

tax benefit, then the taxpayer must

Schedule A—Taxable

than 1 year after the date of initial

provide a computation schedule and

employment, any Indian employment

Income

attach it to Form 8816.

credit allowed for a prior tax year because

Line 14h. Credit by reciprocal for tax

of wages paid or incurred to that

Gross income. Under section 832, gross

paid by attorney-in-fact under section

employee must be recaptured. For

amounts of underwriting and investment

835(d). Enter the amount of tax paid by

details, see Form 8845 and section 45A.

income should be computed on the basis

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an attorney-in-fact as a result of income

Recapture of New markets credit (see

of the underwriting and investment exhibit

received by the attorney-in-fact from the

Form 8874).

of the NAIC annual statement to the

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reciprocal during the tax year. For more

Interest on deferred tax attributable to

extent not inconsistent with the Internal

information, see section 835, the related

certain nondealer installment obligations

Revenue Code and its Regulations.

regulations, and the instructions for line 5

(section 453A(c)).

Gross income, however, does not include

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on page 7.

Interest due on deferred gain (section

extraterritorial income that is qualifying

1260(b)).

foreign trade income. Use Form 8873,

Line 14i. Other credits and payments.

Extraterritorial Income Exclusion, to figure

Enter the amount of any other credits the

How to report. If the corporation

the exclusion. Include the exclusion in the

corporation may take and/or payments

checked the “Other” box, attach a

total for “Other deductions” on line 31.

made. Write to the left of the entry space,

schedule showing the computation of

an explanation of the entry.

each item included in the total for line 12,

Note. In computing the amounts for lines

and identify the applicable Code section

2, 3, and 4, take all interest, dividends, or

Backup withholding. If the corporation

rents received during the year, add

and the type of tax or interest.

had income tax withheld from any

interest, dividends, or rents due and

payments it received because, for

Line 13. Total Tax

accrued at the end of the tax year, and

example, it failed to give the payer its

Include any deferred tax on the

deduct interest, dividends, or rents due

correct EIN, include the amount withheld

termination of a section 1294 election

and accrued at the end of the preceding

in the total for line 14i. This type of

applicable to shareholders in a qualified

tax year. For rules regarding the accrual

withholding is called “Backup

electing fund in the amount entered on

of dividends, see Regulations section

Withholding.” Include the amount withheld

line 13. See Form 8621, Part V, and How

1.301-1(b).

in the entry space for line14j, and write

to report below.

“Backup Withholding” on the dotted line to

Line 3a, column (a). Gross interest.

Subtract any deferred tax on the

the left of the entry space.

Enter the gross amount of interest

corporation’s share of undistributed

income, including all tax-exempt interest.

Line 14j. Total payments. Add the

earnings of a qualified electing fund (see

amounts on lines 14f through 14i and

Line 3b, column (a). Section 103(a)

Form 8621, Part II).

enter the total on line 14j.

excludes interest on state or local bonds

How to report. Attach a schedule

from gross income.

Line 15. Estimated tax penalty. A

showing the computation of each item

This exclusion does not apply to any:

corporation that does not make estimated

included in, or subtracted from, the total

tax payments when due may be subject

1. Private activity bond which is not a

for line 13. On the dotted line next to line

to an underpayment penalty for the period

qualified bond as defined by section 141;

13, specify (a) the applicable Code

of underpayment. Generally, a

2. Arbitrage bond as defined by

section, (b) the type of tax, and (c) the

corporation is subject to the penalty if its

section 148; or

amount of tax.

tax liability is $500 or more and it did not

3. Bonds not meeting the

Line 14b. Prior year(s) special

timely pay the smaller of:

requirements of section 149 (regarding

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estimated tax payments to be applied.

Its tax liability for 2002 or

the registration of tax-exempt bonds).

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The amount entered on line 14b must

Its prior year’s tax.

agree with the amount(s) from Form

Lines 3a and 3b, column (b).

See section 6655 for details and

8816, Part III, line 11. See Form 8816 and

Amortization of premium. Enter on line

exceptions, including special rules for

section 847(2) for additional information.

3a, column (b), the total amortization of

large corporations.

bond premium, including amortization on

Line 14c. Estimated tax payments.

Use Form 2220, Underpayment of

tax-exempt bonds. Enter on line 3b,

Enter any estimated tax payments the

Estimated Tax by Corporations, to see if

column (b), the amortization of bond

corporation made for the tax year. Do not

the corporation owes a penalty and to

premium on tax-exempt bonds only.

include any amount being applied on line

figure the amount of the penalty.

14d.

Note. Insurance companies electing to

Generally, the corporation does not have

amortize discount for tax purposes must

Line 14d. Special estimated tax

to file this form because the IRS can

reduce the amortization of premium by

payments. If the deduction under section

figure the amount of any penalty and bill

any amortization of discount.

847 is claimed on Schedule A, line 27,

the corporation for it. However, even if the

special estimated tax payments must be

corporation does not owe the penalty,

Line 4. Gross rents. Enter gross rents,

made in an amount equal to the tax

complete and attach Form 2220 if:

computed as indicated under the

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Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2002 Page 9

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