Instructions For Form 1120-Pc - 2008 (Page 7 of 20) in pdf

See section 835 and the related

income, the tax rate, and the amount of

Other. Additional taxes and interest

regulations for special rules and

tax. Enter the tax on line 10. However,

amounts can be included in the total

information regarding the statements

see Reduction of section 881 tax below.

entered on line 12. Check the box for

required to be attached to the return.

“Other” if the corporation includes any

Note. Interest received from certain

additional taxes and interest such as the

Line 6. Alternative minimum tax (AMT).

portfolio debt investments that were

items discussed below. See How to report

issued after July 18, 1984, is not subject

A corporation that is not a small

below, for details on reporting these

to the tax. See section 881(c).

corporation exempt from the AMT

amounts on an attached schedule.

•

may be required to file Form 4626

See section 842 for more information.

CAUTION

Recapture of qualified electric vehicle

if it claims certain credits, even though it

(QEV) credit. The corporation must

Minimum effectively connected net

does not owe any AMT. See Form 4626.

recapture part of the QEV credit it claimed

investment income. See section 842(b)

Unless the corporation is treated as a

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

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

small corporation exempt from the AMT, it

the vehicle was placed in service, it

the general rules for computing this

may owe the AMT if it has any of the

ceases to qualify for the credit. See

amount. Also, see Rev. Proc. 2008-53,

adjustments and tax preference items

Regulations section 1.30-1 for details on

2008-36 IRB 678, for the domestic asset/

listed on Form 4626. The corporation

how to figure the recapture.

liability percentages and domestic

•

must file Form 4626 if its taxable income

Recapture of Indian employment credit.

investment yields needed to compute this

(or loss) before the NOL deduction,

Generally, if an employer terminates the

amount.

combined with these adjustments and tax

employment of a qualified employee less

Any additional income required by

preference items is more than the smaller

than 1 year after the date of initial

section 842(b) must be included in

of $40,000 or the corporation’s allowable

employment, any Indian employment

taxable income (for example, Schedule A,

exemption amount (from Form 4626). For

credit allowed for a prior tax year because

line 13).

this purpose, taxable income does not

of wages paid or incurred to that

Reduction of section 881 tax.

include the NOL deduction.

employee must be recaptured. See Form

Additional taxes resulting from the net

8845 and section 45A.

See Form 4626 for definitions and

•

investment income adjustment may offset

Recapture of new markets credit (see

details on how to figure the tax.

a corporation’s section 881 tax on

Form 8874).

Line 8a. Foreign tax credit. To find out

•

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

Recapture of employer-provided

when a corporation can take the credit for

determined by multiplying the section 881

childcare facilities and services credit

payment of income tax to a foreign

tax by the ratio of the amount of income

(see Form 8882).

country or U.S. possession, see Form

•

adjustment to income subject to the

Interest on deferred tax attributable to

1118, Foreign Tax Credit – Corporations.

section 881 tax, computed without the

certain nondealer installment obligations

Line 8b. Credit from Form 8834. Enter

exclusion for interest on state and local

(section 453A(c)).

•

the amount of any credit from Form 8834,

bonds or income exempted from taxation

Interest due on deferred gain (section

Qualified Electric Vehicle Credit, for

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

1260(b)).

•

qualified electric vehicle passive activity

statement showing how the reduction

Alternative tax on qualifying shipping

credits from prior years allowed on Form

under section 881 was figured. Enter the

activities (see Form 8902).

8810 for the current tax year. Also include

net tax imposed by section 881 on line

How to report. If the corporation

on line 8b any credits from Form 5735,

10.

checked the “Other” box, attach a

American Samoa Economic Development

Line 11. Personal holding company

schedule showing the computation of

Credit. See the Instructions for Form

tax. A corporation (other than a

each item included in the total for line 12

5735.

corporation described in section 542(c)) is

and identify the applicable Code section

Line 8c. General Business Credit.

taxed as a personal holding company

and the type of tax or interest.

Enter on line 8c the allowable credit from

(PHC) under section 542 if:

•

Form 3800, Part II, line 32.

Line 13. Total Tax

At least 60% of it’s adjusted ordinary

The corporation is required to file Form

gross income for the tax year is PHC

Include any deferred tax on the

3800, General Business Credit, to claim

income, and

termination of a section 1294 election

•

most business credits. For a list of

At any time during the last half of the

applicable to shareholders in a qualified

allowable credits, see Form 3800. Also,

tax year more than 50% in value of its

electing fund in the amount entered on

see the applicable credit form and its

outstanding stock is directly or indirectly

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

instructions.

owned by five or fewer individuals.

to report below.

Line 8d. Credit for prior year minimum

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

Subtract any deferred tax on the

tax. To figure the minimum tax credit

Personal Holding Company (PHC) Tax,

corporation’s share of undistributed

and any carryforward of that credit, use

for definitions and details on how to figure

earnings of a qualified electing fund (see

Form 8827, Credit for Prior Year Minimum

the tax.

Form 8621, Part II).

Tax — Corporations.

Line 12. Other Taxes

How to report. Attach a schedule

Line 8e. Bond credits from Form 8912.

showing the computation of each item

Include any of the following taxes and

Enter the allowable credits from Form

included in, or subtracted from, the total

interest in the total on line 12. Check the

8912, Credit to Holders of Tax Credit

for line 13. On the dotted line next to line

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

Bonds, line 17.

13, specify (a) the applicable Code

used to compute the total.

Line 10. Foreign corporations. A

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

Recapture of investment credit. If the

foreign corporation carrying on an

amount of tax.

corporation disposed of investment credit

insurance business in the United States is

Line 14b. Prior year(s) special

property or changed its use before the

taxed as a domestic insurance company

estimated tax payments to be applied.

end of its useful life or recovery period, it

on its income effectively connected with

The amount entered on line 14b must

may owe a tax. See Form 4255,

the conduct of a trade or business in the

agree with the amount(s) from Form

Recapture of Investment Credit.

United States (see sections 864(c) and

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

897 for definition).

Recapture of low-income housing

section 847 for additional information.

Generally, any other U.S.-source

credit. If the corporation disposed of

income received by the foreign

property (or there was a reduction in the

Line 14c. Estimated tax payments.

corporation is taxed at 30% (or at a lower

qualified basis of the property) for which it

Enter any estimated tax payments the

treaty rate) under section 881. If the

took the low-income housing credit, it may

corporation made for the tax year. Do not

corporation has this income, attach a

owe a tax. See Form 8611, Recapture of

include any amount being applied on line

schedule showing the kind and amount of

Low-Income Housing Credit.

14d.

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Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2008 Page 7

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