Instructions For Form 1120-Ic-Disc - 2006 (Page 14 of 16) in pdf

•

Schedule L. The balance of this account

Renting this property to unrelated

Complete column (a) to report the

persons for use outside the United States.

IC-DISC’s export gross receipts from all

is used in figuring deferred DISC income

•

Providing services involved in such a

sources (including the United States) for

in Part V of Schedule J.

sale or rental.

the 2006 tax year.

•

Providing export management services.

Schedule N

Column (b). Export gross receipts of

For commission sales, export gross

related IC-DISCs. Complete column (b)

receipts include the total receipts on

Export Gross Receipts

to report related IC-DISCs’ export gross

which the IC-DISC earned the

of the IC-DISC and Related U.S.

receipts from all sources (including the

commission.

United States).

Persons

For purposes of line 2, Schedule N

Column (c). Export gross receipts of

only, no reduction is to be made for

Line 1. Product Code and

all other related U.S. persons.

receipts attributable to military property.

Percentage

Complete column (c) to report other

Therefore, an IC-DISC’s export gross

Enter in line 1a the code number and

related U.S. persons’ export gross

receipts for purposes of line 2 includes

percentage of total export gross receipts

receipts from all sources except the

the total of the amounts from page 2,

(defined below), for the product or service

United States.

Schedule B, columns (b) and (d) of lines

that accounts for the largest portion of the

1c, 2a, 2b, 2c, and 2d.

IC-DISC’s export gross receipts. The

Line 3. Related U.S. Persons

Related persons are:

product codes are on page 16 of these

•

Enter on line 3 the name, address, and

An individual, partnership, estate, or

instructions. On line 1b enter the same

identifying number of related U.S.

trust that controls the IC-DISC.

information for the IC-DISC’s next largest

•

persons in your controlled group.

A corporation that controls the IC-DISC

product or service.

or is controlled by it.

•

A corporation controlled by the same

Example: An IC-DISC has export

Schedule O

person or persons who control the

gross receipts of $10 million. Selling

IC-DISC.

agricultural chemicals accounts for $4.5

Other Information

million (45%) of that amount, which is the

Control means direct or indirect

Question 6. Boycott of Israel. If

IC-DISC’s largest product or service. The

ownership of more than 50% of the total

question 6a, 6b, or 6c is checked “Yes,”

IC-DISC should enter “287” (the product

voting power of all classes of stock

the IC-DISC must file Form 5713 and is

code for agricultural chemicals) and

entitled to vote. See section 993(a)(3).

also deemed to distribute part of its

“45%” in line 1a.

U.S. person is:

income. See Form 5713 for more

•

A citizen or resident of the United

information.

Selling industrial chemicals accounts

States, which includes the

for $2 million (20% of the $10 million total)

Commonwealth of Puerto Rico and

Question 7. Tax-exempt interest.

and is the IC-DISC’s second largest

possessions of the United States.

Report any tax-exempt interest received

product or service. The IC-DISC should

•

A domestic corporation or partnership.

or accrued. Include any exempt-interest

enter “281” (the product code for

•

An estate or trust (other than a foreign

dividends received as a shareholder in a

industrial inorganic and organic

estate or trust as defined in section

mutual fund or other regulated investment

chemicals) and “20%” in line 1b.

7701(a)(31)).

company.

Line 2. Definitions

Export Gross Receipts for 2006

Schedule P

Export gross receipts are receipts from

Column (a). All IC-DISCs should

any of the following:

complete column (a) in line 2. If two or

•

Intercompany Transfer Price or

Providing engineering or architectural

more IC-DISCs are related persons, only

Commission

services for construction projects located

the IC-DISC with the largest export gross

outside the United States.

receipts should complete columns (b) and

Complete and attach a separate

•

Selling for direct use, consumption, or

(c). If an IC-DISC acts as a commission

Schedule P (Form 1120-IC-DISC) for

disposition outside the United States,

agent for a related person, attribute the

each transaction or group of transactions

property (such as inventory) produced in

total amount of the transaction to the

to which you apply the intercompany

the United States.

IC-DISC.

pricing rules of section 994(a)(1) and (2).

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws

of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to

allow us to figure and collect the right amount of tax. Section 6109 requires return preparers to provide their identifying numbers on

the return.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the

form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their

contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are

confidential, as required by section 6103.

The time needed to complete and file the following forms will vary depending on individual circumstances. The estimated average

times are:

Copying, assembling,

Learning about the law or

and sending the form to

Form

Recordkeeping

the form

Preparing the form

the IRS

1120-IC-DISC

94 hr., 56 min.

20 hr.

30 hr., 48 min.

2 hr., 24 min.

Schedule K

4 hr., 4 min.

18 min.

22 min.

— — —

Schedule P

12 hr., 40 min.

1 hr., 29 min.

1 hr., 46 min.

— — —

If you have comments concerning the accuracy of these time estimates or suggestions for making these forms simpler, we would

be happy to hear from you. You may write to the Internal Revenue Service, Tax Products Coordinating Committee,

SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406, Washington, D.C. 20224. Do not send these tax forms to this office.

Instead, see Where To File on page 3.

-14-

Instructions for Form 1120-IC-DISC

Instructions For Form 1120-Ic-Disc - 2006 Page 14

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