Instructions For Form 1120-Ic-Disc - 2003 (Page 2 of 16) in pdf

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Distribution to meet qualification

December 31, 1984, or did not elect to be

from the National

requirements.

an IC-DISC after 1984; and at the beginning

•

Technical Information Service (NTIS) for

of the current tax year, it had undistributed

An IC-DISC that does not meet the gross

$22 (no handling fee) or call

income that was previously taxed or it had

receipts test or qualified export asset test

1-877-CDFORMS (1-877-233-6767) toll free

accumulated DISC income.

during the tax year will still be considered to

to buy the CD-ROM for $22 (plus a $5

have met them if, after the tax year ends,

A former IC-DISC is a corporation that

handling fee).

the IC-DISC makes a pro rata property

was an IC-DISC in an earlier year but did

distribution to its shareholders and specifies

By phone and in person. You can order

not qualify as an IC-DISC for the current tax

at the time that this is a distribution to meet

forms and publications 24 hours a day, 7

year; and at the beginning of the current tax

the qualification requirements.

days a week, by calling 1-800-TAX-FORM

year, it had undistributed income that was

•

If the IC-DISC did not meet the gross

(1-800-829-3676). You can also get most

previously taxed or accumulated IC-DISC

receipts test, the distribution equals the part

forms and publications at your local IRS

income. See section 992 and related

of its taxable income attributable to gross

office.

regulations.

receipts that are not qualified export gross

receipts.

A former DISC or former IC-DISC need

•

not complete lines 1 through 8 on page 1

If it did not meet the qualified export asset

General Instructions

and the Schedules for figuring taxable

test, the distribution equals the fair market

income, but must complete Schedules J, L,

value of the assets that are not qualified

and M of Form 1120-IC-DISC and Schedule

export assets on the last day of the tax year.

Purpose of Form

•

K (Form 1120-IC-DISC). Write “Former

If the IC-DISC did not meet either test, the

DISC” or “Former IC-DISC” across the top of

Form 1120-IC-DISC is an information return

distribution equals the sum of both amounts.

the return.

filed by interest charge domestic

Regulations section 1.992-3 explains

international sales corporations (IC-DISCs),

how to figure the distribution.

former DISCs, and former IC-DISCs.

When To File

Interest on late distribution. If the

File Form 1120-IC-DISC by the 15th day of

What Is an IC-DISC?

IC-DISC makes a distribution after Form

the 9th month after its tax year ends. No

1120-IC-DISC is due, interest must be paid

An IC-DISC is a domestic corporation that

extensions are allowed. If the due date falls

has elected to be an IC-DISC and its

to the United States Treasury. The interest

on a Saturday, Sunday, or a legal holiday,

charge is 4

% of the distribution times the

election is still in effect. The IC-DISC

the corporation may file on the next

number of tax years that begin after the tax

election is made by filing Form 4876-A,

business day.

year to which the distribution relates until the

Election To Be Treated as an Interest

Private delivery services. Corporations

Charge DISC.

date the IC-DISC made the distribution.

can use certain private delivery services

Generally, an IC-DISC is not taxed on its

If the IC-DISC must pay this interest,

designated by the IRS to meet the “timely

income. Shareholders of an IC-DISC are

send the payment to the Internal Revenue

mailing as timely filing/paying” rule for tax

taxed on its income when the income is

Service Center where you filed Form

returns and payments. The most recent list

actually (or deemed) distributed. In addition,

1120-IC-DISC within 30 days of making the

of designated private delivery services was

section 995(f) imposes an interest charge on

distribution. On the payment, write the

published by the IRS in September 2002.

shareholders for their share of DISC-related

IC-DISC’s name, address, and employer

This list includes only the following:

deferred tax liability. See Form 8404,

identification number; the tax year; and a

•

Airborne Express (Airborne): Overnight

Interest Charge on DISC-Related Deferred

statement that the payment represents the

Tax Liability, for details.

interest charge under Regulations section

Air Express Service, Next Afternoon

1.992-3(c)(4).

Service, and Second Day Service.

•

To be an IC-DISC, a corporation must be

DHL Worldwide Express (DHL): DHL

organized under the laws of a state or the

Who Must File

‘‘Same Day’’ Service and DHL USA

District of Columbia and meet the following

Overnight.

The corporation must file Form

tests.

•

Federal Express (FedEx): FedEx Priority

1120-IC-DISC if it elected, by filing Form

At least 95% of its gross receipts during

Overnight, FedEx Standard Overnight,

4876-A, to be treated as an IC-DISC and its

the tax year are qualified export receipts.

FedEx 2Day, FedEx International Priority,

•

election is in effect for the tax year.

At the end of the tax year, the adjusted

and FedEx International First.

basis of its qualified export assets is at least

•

If the corporation is a former DISC or

United Parcel Service (UPS): UPS Next

95% of the sum of the adjusted basis of all

former IC-DISC, it must file Form

Day Air, UPS Next Day Air Saver, UPS 2nd

of its assets.

•

1120-IC-DISC in addition to any other return

Day Air, UPS 2nd Day Air A.M., UPS

It has only one class of stock, and its

required.

Worldwide Express Plus, and UPS

outstanding stock has a par or stated value

Worldwide Express.

of at least $2,500 on each day of the tax

A former DISC is a corporation that was

year (or, for a new corporation, on the last

a DISC on or before December 31, 1984,

The private delivery service can tell you

day to elect IC-DISC status for the year and

but failed to qualify as a DISC after

how to get written proof of the mailing date.

on each later day).

•

It maintains separate books and records.

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It is not a member of any controlled group

Where To File

of which a foreign sales corporation (FSC) is

a member.

•

Its tax year must conform to the tax year

File the IC-DISC’s return at the applicable IRS address listed below.

of the principal shareholder who has the

highest percentage of voting power. If two or

If the corporation’s principal business,

Use the following Internal Revenue Service

more shareholders have the highest

office, or agency is located in:

Center address:

percentage of voting power, the IC-DISC

The United States (including Alaska and

must elect a tax year that conforms to that of

Hawaii)

Cincinnati, OH 45999-0012

any one of the principal shareholders. See

section 441(h) and its regulations for more

A foreign country or U.S. possession

Philadelphia, PA 19255-0012

information.

•

Its election to be treated as an IC-DISC is

A group of corporations with members located in more than one service center area will

in effect for the tax year.

often keep all the books and records at the principal office of the managing corporation. In

See Definitions on page 5 and section

this case, the tax returns of the corporations may be filed with the service center for the area

992 and related regulations for details.

in which the principal office of the managing corporation is located.

-2-

Instructions for Form 1120-IC-DISC

Instructions For Form 1120-Ic-Disc - 2003 Page 2

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