Instructions For Form 1120-Ic-Disc - 2002 (Page 2 of 16) in pdf

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Order IRS products on-line.

95% of the sum of the adjusted basis of all

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Who Must File

of its assets.

Download forms, instructions, and

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publications.

It has only one class of stock, and its

The corporation must file Form

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See answers to frequently asked tax

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

outstanding stock has a par or stated value

questions.

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

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

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Search publications on-line by topic or

election is in effect for the tax year.

year (or for a new corporation on the last

keyword.

day to elect IC-DISC status for the year and

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on each later day).

Send us comments or request help by

If the corporation is a former DISC or

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email.

former IC-DISC, it must file Form

It maintains separate books and records

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1120-IC-DISC in addition to any other return

for the tax year.

news by email.

required.

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It is not a member of any controlled group

You can also reach us using file transfer

of which a foreign sales corporation (FSC) is

protocol at ftp.irs.gov.

A former DISC is a corporation that was

a member.

a DISC on or before December 31, 1984,

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CD-ROM. Order Pub. 1796, Federal Tax

Its tax year must conform to the tax year

but failed to qualify as a DISC after

Products on CD-ROM, and get:

of the principal shareholder who at the

December 31, 1984, or did not elect to be

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Current year forms, instructions, and

beginning of the tax year has the highest

an IC-DISC after 1984; and at the beginning

publications.

percentage of voting power. If two or more

of the current tax year, it had undistributed

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shareholders have the highest percentage

Prior year forms, instructions, and

income that was previously taxed or it had

of voting power, the IC-DISC must elect a

publications.

accumulated DISC income.

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tax year that conforms to that of any one of

Frequently requested tax forms that may

the principal shareholders. See section

be filled in electronically, printed out for

A former IC-DISC is a corporation that

441(h) and its regulations for more

submission, and saved for recordkeeping.

was an IC-DISC in an earlier year but did

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information.

The Internal Revenue Bulletin.

not qualify as an IC-DISC for the current tax

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Buy the CD-ROM on the Internet at

Its election to be treated as an IC-DISC is

year; and at the beginning of the current tax

from the National

in effect for the tax year.

year, it had undistributed income that was

Technical Information Service (NTIS) for

previously taxed or accumulated IC-DISC

See Definitions on page 5 and section

$22 (no handling fee), or call

income. See section 992 and related

992 and related regulations for details.

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

regulations.

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

Distribution to meet qualification

handling fee).

A former DISC or former IC-DISC need

requirements.

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not complete lines 1 through 8 on page 1

By phone and in person. You can order

An IC-DISC that does not meet the gross

and the Schedules for figuring taxable

forms and publications 24 hours a day, 7

receipts test or qualified export asset test

income, but must complete Schedules J, L,

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

during the tax year will still be considered to

and M of Form 1120-IC-DISC and Schedule

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

have met them if, after the tax year ends,

K (Form 1120-IC-DISC). Write “Former

forms and publications at your local IRS

the IC-DISC makes a pro rata property

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

office.

distribution to its shareholders and specifies

the return.

at the time that this is a distribution to meet

the qualification requirements.

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General Instructions

When To File

If the IC-DISC did not meet the gross

receipts test, the distribution equals the part

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

of its taxable income attributable to gross

Purpose of Form

the 9th month after the tax year ends. No

receipts that are not qualified export gross

extensions are allowed. If the due date falls

receipts.

Form 1120-IC-DISC is an information return

on a Saturday, Sunday, or a legal holiday,

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filed by interest charge domestic

If it did not meet the qualified export asset

the corporation may file on the next

international sales corporations (IC-DISCs),

test, the distribution equals the fair market

business day.

former DISCs, and former IC-DISCs.

value of the assets that are not qualified

export assets on the last day of the tax year.

Private delivery services. Corporations

What Is an IC-DISC?

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

can use certain private delivery services

An IC-DISC is a domestic corporation that

designated by the IRS to meet the “timely

distribution equals the sum of both amounts.

has elected to be an IC-DISC and its

mailing as timely filing/paying” rule for tax

Regulations section 1.992-3 explains

election is still in effect. The IC-DISC

returns and payments. The most recent list

how to figure the distribution.

election is made by filing Form 4876-A,

of designated private delivery services was

Election To Be Treated as an Interest

published by the IRS in September 2002.

Interest on late distribution. If the

Charge DISC.

IC-DISC makes a distribution after Form

This list includes only the following:

Generally, an IC-DISC is not taxed on its

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

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income. Shareholders of an IC-DISC are

Airborne Express (Airborne): Overnight

to the United States Treasury. The interest

taxed on its income when the income is

Air Express Service, Next Afternoon

charge is 4

% of the distribution times the

actually (or deemed) distributed. In addition,

Service, Second Day Service.

number of tax years that begin after the tax

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section 995(f) imposes an interest charge on

DHL Worldwide Express (DHL): DHL

year to which the distribution relates until the

shareholders for their share of DISC-related

‘‘Same Day’’ Service, DHL USA Overnight.

date the IC-DISC made the distribution.

deferred tax liability. See Form 8404,

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Federal Express (FedEx): FedEx Priority

Interest Charge on DISC-Related Deferred

Overnight, FedEx Standard Overnight,

If the IC-DISC must pay this interest,

Tax Liability, for details.

FedEx 2Day, FedEx International Priority,

send the payment to the Internal Revenue

and FedEx International First.

To be an IC-DISC, a corporation must be

Service Center where you filed Form

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organized under the laws of a state or the

1120-IC-DISC within 30 days of making the

United Parcel Service (UPS): UPS Next

District of Columbia and meet the following

distribution. On the payment, write the

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

tests.

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

IC-DISC’s name, address, and employer

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Worldwide Express Plus, and UPS

At least 95% of its gross receipts during

identification number; the tax year; and a

Worldwide Express.

the tax year are qualified export receipts.

statement that the payment represents the

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interest charge under Regulations section

At the end of the tax year, the adjusted

The private delivery service can tell you

1.992-3(c)(4).

basis of its qualified export assets is at least

how to get written proof of the mailing date.

-2-

Instructions for Form 1120-IC-DISC

Instructions For Form 1120-Ic-Disc - 2002 Page 2

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