Instructions For Form 1120-Pc - 2006 (Page 8 of 20) in pdf

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

net operating losses or capital losses that

payments it received because, for

Enter the gross amount of interest

arise in years after a year in which a

example, it failed to give the payer its

income, including all tax-exempt interest.

section 847 deduction was claimed, then

correct EIN, include the amount withheld

the corporation must recompute the tax

in the total for line 14j. Write the amount

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

benefit attributable to the previously

withheld and the words “Backup

excludes interest on state or local bonds

claimed section 847 deduction taking into

Withholding” on the dotted line to the left

from gross income.

account the loss carrybacks. Tax benefits

of the entry space for line 14j.

This exclusion does not apply to any:

also include those derived from filing a

Line 14k. Total payments. Add the

1. Private activity bond which is not a

consolidated return with another

amounts on lines 14f through 14j and

qualified bond as defined by section 141;

insurance company (without regard to

enter the total on line 14k.

2. Arbitrage bond as defined by

section 1503(c)).

Line 15. Estimated tax penalty. If Form

section 148; or

Therefore, if the recomputation

2220 is attached, check the box on line

3. Bonds not meeting the

changes the amount of the section 847

15 and enter the amount of any penalty

requirements of section 149 (regarding

tax benefit, then the taxpayer must

on this line.

the registration of tax-exempt bonds).

provide a computation schedule and

Line 18. Electronic deposit of tax

attach it to Form 8816.

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

refund of $1 million or more. If the

Amortization of premium. Enter on line

Line 14e. Overpaid estimated tax. If the

corporation is due a refund of $1 million

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

corporation overpaid estimated tax, it may

or more and wants it electronically

bond premium, including amortization on

be able to get a quick refund by filing

deposited into its checking or savings

tax-exempt bonds. Enter on line 3b,

Form 4466. The overpayment must be at

account at any U.S. bank or other

column (b), the amortization of bond

least 10% of the corporation’s expected

financial institution instead of having a

premium on tax-exempt bonds only.

income tax liability and at least $500. File

check sent to the corporation, complete

Form 4466 after the end of the

Note. Insurance companies electing to

Form 8302 and attach it to the

corporation’s tax year, and no later than

amortize discount for tax purposes must

corporation’s tax return.

the 15th day of the third month after the

reduce the amortization of premium by

end of the tax year. Form 4466 must be

any amortization of discount.

filed before the corporation files its tax

Schedule A—Taxable

Line 4. Gross rents. Enter gross rents,

return.

computed as indicated under the

Income

Line 14h. Credit by reciprocal for tax

instructions for Gross income, on this

paid by attorney-in-fact under section

Gross income. Under section 832, gross

page. Deduct expenses, such as repairs,

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

amounts of underwriting and investment

interest, taxes, and depreciation, on the

an attorney-in-fact as a result of income

income should be computed on the basis

proper lines for deductions.

received by the attorney-in-fact from the

of the Statement of Income of the NAIC

Line 6. Capital gain net income. Every

reciprocal during the tax year. For more

annual statement to the extent not

sale or exchange of a capital asset must

information, see section 835, the related

inconsistent with the Internal Revenue

be reported in detail on Schedule D (Form

regulations, and the instructions for line 5

Code and its Regulations.

1120), Capital Gains and Losses, even if

on page 6.

Extraterritorial income. Gross income

there is no gain or loss.

Line 14i. Credit for federal telephone

generally does not include extraterritorial

Generally, losses from sales or

excise tax paid. If the corporation was

income that is qualifying foreign trade

exchanges of capital assets are only

billed after February 28, 2003, and before

income. Use Form 8873, Extraterritorial

allowed to the extent of gains. However,

August 1, 2006, for the federal telephone

Income Exclusion, to figure the exclusion.

corporations taxed under section 831 may

excise tax on long distance or bundled

Include the exclusion in the total for

claim losses from capital assets sold or

service, the corporation may be able to

“Other deductions” on line 31. See the

exchanged to get funds to meet abnormal

request a credit for the tax paid. The

Instructions for Form 8873 for more

insurance losses and to pay dividends

corporation had bundled service if its local

information.

and similar distributions to policyholders.

and long distance service was provided

Income from qualifying shipping

Do not include those types of losses here,

under a plan that does not separately

activities. Gross income does not

but instead, report them on Schedule G.

state the charge for local service. The

include income from qualifying shipping

The net capital loss for these

corporation cannot request the credit if it

activities if the corporation makes an

corporations is the amount by which

has already received a credit or refund

election under section 1354 to be taxed

losses for the year from sales or

from its service provider. If the

on its notional shipping income (as

exchanges of capital assets exceed the

corporation requests the credit, it cannot

defined in section 1353) at the highest

gains from these sales or exchanges plus

ask its service provider for a credit or

corporate tax rate (35%). If the election is

the smaller of:

refund and must withdraw any request

made, the corporation generally may not

1. Taxable income (computed without

previously submitted to its provider.

claim any loss, deduction, or credit with

gains or losses from sales or exchanges

The corporation can request the credit

respect to qualifying shipping activities. A

of capital assets); or

by attaching Form 8913, Credit for

corporation making this election also may

2. Losses from the sale or exchange

Federal Telephone Excise Tax Paid,

elect to defer gain on the disposition of a

of capital assets sold or exchanged to

showing the actual amount the

qualifying vessel.

obtain funds to meet abnormal insurance

corporation paid. The corporation also

Use Form 8902, Alternative Tax on

losses and to provide for the payment of

may be able to request the credit based

Qualifying Shipping Activities, to figure

dividends and similar distributions to

on an estimate of the amount paid. See

the tax. Include the alternative tax on line

policyholders.

Form 8913 for details. In either case, the

12, page 1 of the Form 1120-PC.

corporation must keep records to

Subject to the limitations in section

Note. In computing the amounts for lines

substantiate the amount of the credit

1212(a), a net capital loss can be carried

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

requested.

back 3 years and forward 5 years as a

rents received during the year, add

Line 14j. Other credits and payments.

short-term capital loss.

interest, dividends, or rents due and

Enter the amount of any other credits the

accrued at the end of the tax year, and

Line 8. Certain mutual fire or flood

corporation may take and/or payments

deduct interest, dividends, or rents due

insurance company premiums. A

made. Write to the left of the entry space,

and accrued at the end of the preceding

mutual fire or flood insurance company

an explanation of the entry.

tax year. For rules regarding the accrual

whose principal business is the issuance

Backup withholding. If the corporation

of dividends, see Regulations section

of policies (1) for which the premium

had federal income tax withheld from any

1.301-1(b).

deposits are the same (regardless of the

-8-

Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2006 Page 8

Related Articles

Related forms

Related Categories