Instructions For Form 1120-Pc - 2003 (Page 8 of 20) in pdf

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Line 8d. Credit for prior year minimum

country or U.S. possession, see Form

At any time during the last half of the

tax. To figure the minimum tax credit and

1118, Foreign Tax Credit — Corporations.

tax year more than 50% in value of its

any carryforward of that credit, use Form

outstanding stock is owned, directly or

Line 8b. Other Credits

8827, Credit for Prior Year Minimum

indirectly, by five or fewer individuals.

Include any other credits on line 8b. On

Tax — Corporations. Also see Form 8827

See Schedule PH (Form 1120), U.S.

the dotted line to the left of the entry

if any of the corporation’s 2002

Personal Holding Company Tax, for

space, write the amount of the credit and

nonconventional source fuel credit or

definitions and details on how to figure

identify it.

qualified electric vehicle credit was

the tax.

disallowed solely because of the tentative

Possessions tax credit. The Small

A foreign PHC (defined in section 552)

minimum tax limitation. See section 53(d).

must file Form 5471.

Business Job Protection Act of 1996

repealed the possessions credit.

Line 8e. Qualified zone academy bond

Line 12. Other Taxes

However, existing credit claimants may

credit. Enter the amount of any credit

Include any of the following taxes and

qualify for a credit under the transitional

from Form 8860, Qualified Zone

interest in the total on line 12. Check the

rules. See Form 5735, Possessions Tax

Academy Bond Credit.

appropriate box(es) for the form, if any,

Credit (Under Sections 936 and 30A).

Line 10. Foreign corporations. A

used to compute the total.

Nonconventional source fuel credit. A

foreign corporation carrying on an

Recapture of investment credit. If the

credit is allowed for the sale of qualified

insurance business in the United States is

corporation disposed of investment credit

fuels produced from a nonconventional

taxed as a domestic insurance company

property or changed its use before the

source. Section 29 contains a definition of

on its income effectively connected with

end of its useful life or recovery period, it

qualified fuels, provisions for figuring the

the conduct of a trade or business in the

may owe a tax. See Form 4255,

credit, and other special rules. Attach a

United States (see sections 864(c) and

Recapture of Investment Credit, for

separate schedule to the return showing

897 for definition).

details.

the computation of the credit.

Generally, any other U.S.-source

Recapture of low-income housing

Qualified electric vehicle (QEV) credit.

income received by the foreign

credit. If the corporation disposed of

Include on line 8b any credit from Form

corporation is taxed at 30% (or at a lower

property (or there was a reduction in the

8834, Qualified Electric Vehicle Credit.

treaty rate) under section 881. If the

qualified basis of the property) for which it

Vehicles that qualify for this credit are not

corporation has this income, attach a

took the low-income housing credit, it may

eligible for the deduction for clean-fuel

schedule showing the kind and amount of

owe a tax. See Form 8611, Recapture of

vehicles under section 179A.

income, the tax rate, and the amount of

Low-Income Housing Credit.

tax. Enter the tax on line 9. However, see

Line 8c. General Business Credit

Other. Additional taxes and interest

Reduction of section 881 tax below.

amounts may be included in the total

Enter on line 8c the corporation’s total

Note. Interest received from certain

entered on line 12. Check the box for

general business credit.

portfolio debt investments that were

“Other” if the corporation includes any of

If the corporation is filing Form 8844,

issued after July 18, 1984, is not subject

the taxes and interest discussed below.

Empowerment Zone and Renewal

to the tax. See section 881(c) for details.

See How to report below, for details on

Community Employment Credit, or Form

reporting these amounts on an attached

See section 842 for more information.

8884, New York Liberty Zone Business

schedule.

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Employee Credit, check the “Form(s)”

Minimum effectively connected net

Recapture of qualified electric vehicle

box, write the form number in the space

investment income. See section 842(b)

(QEV) credit. The corporation must

provided, and include the allowable credit

and Notice 89-96, 1989-2 C.B. 417, for

recapture part of the QEV credit claimed

on line 8c.

the general rules for computing this

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

amount. Also, see Rev. Proc. 2003-70,

date the vehicle was placed in service, it

If the corporation is required to file

2003-34 I.R.B. 406, for the domestic

ceases to qualify for the credit. See

Form 3800, General Business Credit,

asset/liability percentages and domestic

Regulations section 1.30-1 for details on

check the “Form 3800” box and include

investment yields needed to compute this

how to figure the recapture.

the allowable credit on line 8c.

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amount.

Recapture of Indian employment credit.

If the corporation is not required to file

Generally, if an employer terminates the

Any additional income required by

Form 3800, check the “Form(s)” box,

employment of a qualified employee less

section 842(b) must be included in

write the form number in the space

than 1 year after the date of initial

taxable income (e.g., Schedule A, line

provided, and include on line 8c the

employment, any Indian employment

13).

allowable credit from the applicable form

credit allowed for a prior tax year because

listed below.

Reduction of section 881 tax.

of wages paid or incurred to that

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Additional taxes resulting from the net

Investment Credit (Form 3468).

employee must be recaptured. For

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investment income adjustment may offset

Work Opportunity Credit (Form 5884).

details, see Form 8845 and section 45A.

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a corporation’s section 881 tax on

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Credit for Alcohol Used as Fuel (Form

Recapture of new markets credit (see

U.S.-source income. The tax reduction is

6478).

Form 8874).

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determined by multiplying the section 881

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Credit for Increasing Research

Recapture of employer-provided

tax by the ratio of the amount of income

Activities (Form 6765).

childcare facilities and services credit

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adjustment to income subject to the

Low-Income Housing Credit (Form

(see Form 8882).

section 881 tax, computed without the

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8586).

Interest on deferred tax attributable to

exclusion for interest on state and local

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Disabled Access Credit (Form 8826).

certain nondealer installment obligations

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bonds or income exempted from taxation

Enhanced Oil Recovery Credit (Form

(section 453A(c)).

by treaty. See section 842(c)(2). Attach a

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8830).

Interest due on deferred gain (section

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statement showing how the reduction

Renewable Electricity Production Credit

1260(b)).

under section 881 was figured. Enter the

(Form 8835).

How to report. If the corporation

net tax imposed by section 881 on line

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Indian Employment Credit (Form 8845).

checked the “Other” box, attach a

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10.

Credit for Contributions to Selected

schedule showing the computation of

Community Development Corporations

Line 11. Personal holding company

each item included in the total for line 12

(Form 8847).

tax. A corporation (other than a

and identify the applicable Code section

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Welfare-to-Work Credit (Form 8861).

corporation described in section 542(c)) is

and the type of tax or interest.

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New Markets Credit (Form 8874).

taxed as a personal holding company

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Line 13. Total Tax

Credit for Small Employer Pension Plan

(PHC) under section 542 if:

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Startup Costs (Form 8881).

At least 60% of it’s adjusted ordinary

Include any deferred tax on the

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Credit for Employer-Provided Childcare

gross income for the tax year is PHC

termination of a section 1294 election

Facilities and Services (Form 8882).

income and

applicable to shareholders in a qualified

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Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2003 Page 8

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