Instructions For Form 1120-Pc - 2001 (Page 8 of 20) in pdf

For this purpose, taxable income does

Note. A corporation filing Form 3800

effectively connected with the conduct of

not include the NOL deduction. Get Form

and Form 8844, Empowerment Zone

a trade or business in the United States.

4626 for details.

Employment Credit, would check both

For a definition of effectively connected

the “Form 3800” box and the “Form(s)”

income, see sections 864(c) and 897.

Exemption for small corporation. A

box, and write “8844” in the space

Generally, any other U.S.-source

corporation is treated as a small

provided, and enter the total of the credits

income received by a foreign corporation

corporation exempt from the AMT for its

on line 6c.

that is not effectively connected with the

tax year beginning in 2001 if that year is

If the corporation is not required to file

conduct of a trade or business in the

the corporation’s first tax year in

Form 3800, attach the applicable form(s)

United States is taxed at 30% (or at a

existence (regardless of its gross

listed in parentheses below. Check the

lower treaty rate). See section 881. If the

receipts) or:

“Form(s)” box, write the form number(s) in

corporation has this income, attach a

1. It was treated as a small

the space provided, and enter the total of

schedule showing the kind and amount of

corporation exempt from the AMT for all

the credit(s) on line 6c.

income, the tax rate and the amount of

prior tax years beginning after 1997, and

•

tax.

2. Its average annual gross receipts

Investment Credit (Form 3468).

•

for the 3-tax-year-period (or portion

Note. Interest received from certain

Work Opportunity Credit (Form 5884).

•

thereof during which the corporation was

portfolio debt investments that were

Credit for Alcohol Used as Fuel (Form

in existence) ending before its tax year

issued after July 18, 1984, is not subject

6478).

•

beginning in 2001 did not exceed $7.5

to the tax.

Credit for Increasing Research

million ($5 million if the corporation had

Activities (Form 6765).

Additional taxes resulting from the net

•

only 1 prior tax year).

Low-Income Housing Credit (Form

investment income adjustment may offset

8586).

a corporation’s 30% tax on U.S. source

•

Line 8a. Foreign tax credit. To find out

Orphan Drug Credit (Form 8820).

income. The tax reduction is determined

•

when a corporation can take this credit for

Disabled Access Credit (Form 8826).

by multiplying the 30% tax by the ratio of

•

payment of income tax to a foreign

Enhanced Oil Recovery Credit (Form

the amount of income adjustment to

country or U.S. possession, see Form

8830).

income subject to the 30% tax, computed

•

1118, Foreign Tax Credit – Corporations.

Renewable Electricity Production Credit

without the exclusion for interest on state

(Form 8835).

and local bonds or income exempted from

Line 8b. Other Credits

•

Empowerment Zone Employment

taxation by treaty. See section 842(c)(2).

Possessions tax credit. The Small

Credit (Form 8844). While the

Attach a statement showing how the

Business Job Protection Act of 1996

empowerment zone employment credit is

reduction under section 881 was figured.

repealed the possessions credit.

a part of the general business credit, it is

Enter the net tax imposed by section 881

However, existing credit claimants may

figured separately on Form 8844 and is

on line 10.

qualify for a credit under the transitional

never carried to Form 3800.

•

Note. Section 953(d) allows a foreign

rules. See Form 5735, Possessions Tax

Indian Employment Credit (Form 8845).

•

insurance company to elect to be taxed

Credit (Under Sections 936 and 30A).

Credit for Employer Social Security and

as a domestic corporation. If elected,

Medicare Taxes Paid on Certain

Include the credit in the amount shown

include the additional tax required to be

Employee Tips (Form 8846).

on line 8b. On the line to the left of the

•

paid on line 13. Write on the dotted line to

Credit for Contributions to Selected

entry space, write the amount of the credit

the left of line 13, “Sec. 953(d)” and the

Community Development Corporations

and identify it as a section 936 credit.

amount. Attach a schedule showing the

(Form 8847).

•

computation. See section 953(d) for more

Nonconventional source fuel credit. A

Welfare-to-Work Credit (Form 8861).

•

details.

credit is allowed for the sale of qualified

New Markets Credit (Form 8874).

fuels produced from a nonconventional

Line 11. Personal holding company

Line 8d. Credit for prior year minimum

source. Section 29 contains a definition of

tax. A corporation is taxed as a personal

tax. To figure the minimum tax credit and

qualified fuels, provisions for figuring the

holding company (PHC) under section

any carryforward of that credit, use Form

credit, and other special rules. Attach a

542 if:

8827, Credit for Prior Year Minimum

•

separate schedule to the return showing

At least 60% of it’s adjusted ordinary

Tax – Corporations.

the computation of the credit.

gross income for the tax year is PHC

Also see Form 8827 if any of the

income, and

Qualified electric vehicle (QEV) credit.

•

corporation’s 2000 nonconventional

At any time during the last half of the

Include on line 8b any credit from Form

source fuel credit or qualified electric

tax year more than 50% in value of it’s

8834, Qualified Electric Vehicle Credit.

vehicle credit was disallowed solely

outstanding stock is owned, directly or

Vehicles that qualify for this credit are not

because of the tentative minimum tax

indirectly, by five or fewer individuals.

eligible for the deduction for clean-fuel

limitation. See section 53(d).

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

vehicles under section 179A.

Personal Holding Company Tax, for

Line 8e. Qualified zone academy bond

Line 8c. General Business Credit

definitions and details on how to figure

credit. Enter the amount of any credit

Check the Form 3800 box, complete

the tax.

from Form 8860, Qualified Zone

Form 3800, General Business Credit, and

Academy Bond Credit.

Line 12. Other Taxes

enter the total of the credits on line 8c if

Line 10. Foreign corporations. A

Include any of the following taxes and

the corporation has any of the following:

foreign corporation carrying on an

interest in the total on line 12. Check the

•

More than one of the general business

insurance business in the United States is

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

credits listed below (other than the

taxed as a domestic insurance company

used to compute the total.

empowerment zone employment credit),

on its income effectively connected with

•

Recapture of investment credit. If the

General credits from an electing large

the conduct of a trade or business in the

corporation disposed of investment credit

partnership shown in box 7 of Schedule

United States. See sections 842 and 897,

property or changed its use before the

K-1 (Form 1065-B),

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

•

end of its useful life or recovery period, it

A credit carryforward or carryback of

more information. See Rev. Proc.

may owe a tax. See Form 4255,

any of these credits (other than the

2001-48, 2001-40 I.R.B. 308 for the

Recapture of Investment Credit, for

empowerment zone employment credit),

domestic asset/liability percentages and

•

details.

A trans-Alaska pipeline liability fund

domestic investment yields needed by

credit, or

foreign insurance companies to compute

Recapture of low-income housing

•

Any of these credits (other than the

their minimum effectively connected net

credit. If the corporation disposed of

low-income housing credit and

investment income under section 842(b).

property (or there was a reduction in the

empowerment zone employment credit

Income from sources outside the United

qualified basis of the property) for which it

that is from a passive activity).

States from U.S. business is treated as

took the low-income housing credit, it may

-8-

Instructions For Form 1120-Pc - 2001 Page 8

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