Instructions For Form 1120-Fsc - 2007 (Page 10 of 13) in pdf

Line 8, Column (c)

sections 902 and 960. See sections 78 and

5. Any other taxable dividend income

906(b)(4).

not properly reported elsewhere on the

Limitation on dividends-received

worksheet.

Line 11, Column (a)

deduction. Generally, line 8, column (c),

If patronage dividends or per-unit retain

may not exceed the amount on line 10 of the

Include the following:

allocations are included on line 11, identify

worksheet below. However, in a year in

1. Dividends (other than capital gain

the total of these amounts in a schedule

which an NOL occurs, this limitation does

distributions reported on Schedule D (Form

attached to Form 1120-FSC.

not apply even if the loss is created by the

1120) and exempt-interest dividends) that

dividends-received deduction. See sections

are received from RICs and that are not

Schedule G

172(d) and 246(b).

subject to the 70% deduction.

2. Dividends from tax-exempt

Deductions Allocated or

1. Refigure line 18, Part II, Schedule

organizations.

B (page 3 of Form 1120-FSC)

Apportioned to Foreign Trade

3. Dividends (other than capital gain

without any adjustment under

distributions) received from a real estate

Income Other Than Foreign

section 1059 and without any

investment trust that, for the tax year of the

Trade Income Reported on

capital loss carryback to the tax

trust in which the dividends are paid,

year under section 1212(a)(1) . . .

Schedule F

qualifies under sections 856 through 860.

2. Multiply line 1 by 80% . . . . . . . .

4. Dividends not eligible for a

dividends-received deduction, which include

Limitations on Deductions

3. Add lines 2, 5, and 7, column (c),

the following:

and the part of the deduction on

Section 263A uniform capitalization

line 3, column (c), that is

a. Dividends received on any share of

rules. The uniform capitalization rules of

attributable to dividends from

stock held for less than 46 days during the

section 263A generally require FSCs to

20%-or-more-owned corporations

91-day period beginning 45 days before the

capitalize, or include in inventory, certain

ex-dividend date. When counting the

4. Enter the smaller of line 2 or 3. If

costs incurred in connection with:

number of days the FSC held the stock, you

•

line 3 is greater than line 2, stop

Personal property (tangible and certain

may not count certain days during which the

here; enter the amount from line 4

intangible property) acquired for resale.

FSC’s risk of loss was diminished. See

on line 8, column (c), and do not

•

The production of real property and

section 246(c)(4) and Regulations section

complete lines 5-10 below . . . . .

tangible personal property by a FSC for use

1.246-5 for more details.

5. Enter the total amount of dividends

in its trade or business or in an activity

b. Dividends attributable to periods

from 20%-or-more-owned

engaged in for profit.

totaling more than 366 days that the

corporations that are included on

Tangible personal property produced

corporation received on any share of

lines 2, 3, 5, and 7, column (a) . .

by a FSC includes a film, sound recording,

preferred stock held for less than 91 days

6. Subtract line 5 from line 1 . . . . . .

videotape, book, or similar property.

during the 181-day period that began 90

FSCs subject to the section 263A

days before the ex-dividend date. When

7. Multiply line 6 by 70% . . . . . . . .

uniform capitalization rules are required to

counting the number of days the FSC held

8. Subtract line 3 above from line 8,

the stock, you may not count certain days

capitalize:

column (c) . . . . . . . . . . . . . . .

during which the FSC’s risk of loss was

1. Direct costs and

9. Enter the smaller of line 7 or

diminished. See section 246(c)(4) and

2. An allocable part of most indirect

line 8 . . . . . . . . . . . . . . . . . . .

Regulations section 1.246-5 for more

costs (including taxes) that (a) benefit the

details. Preferred dividends attributable to

assets produced or acquired for resale or (b)

10. Dividends-received deduction

periods totaling less than 367 days are

after limitation (sec. 246(b)). Add

are incurred by reason of the performance

subject to the 46-day holding period rule

lines 4 and 9. Enter the result here

of production or resale activities.

above.

and on line 8, column (c) . . . . . . 10.

c. Dividends on any share of stock to

For inventory, some of the indirect

the extent the FSC is under an obligation

expenses that must be capitalized are:

Line 10, Column (a)

•

(including a short sale) to make related

Administration expenses.

•

If the FSC claims the foreign tax credit,

payments with respect to positions in

Taxes.

•

enter the tax that is deemed paid under

substantially similar or related property.

Depreciation.

Dividends and Dividends-Received Deduction Worksheet

(a) Dividends

(See instructions that begin on page 9)

received

(b) %

deduction: (a) x (b)

1 Dividends from less-than-20%-owned domestic corporations that are subject to the

70% deduction (other than debt-financed stock) . . . . . . . . . . . . . . . . . . . . . . .

2 Dividends from 20%-or-more-owned domestic corporations that are subject to the

80% deduction (other than debt-financed stock) . . . . . . . . . . . . . . . . . . . . . . .

3 Dividends on debt-financed stock of domestic and foreign corporations (section

246A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See Inst.

4 Dividends on certain preferred stock of less-than-20%-owned public utilities . . . . .

5 Dividends on certain preferred stock of 20%-or-more-owned public utilities . . . . . .

6 Dividends from less-than-20%-owned foreign corporations that are subject to the

70% deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 Dividends from 20%-or-more-owned foreign corporations that are subject to the

80% deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8 Total dividends-received deduction. Add lines 1 through 7. See instructions for

limitation. Enter here and on line 19b, Schedule B. . . . . . . . . . . . . . . . . . . . . .

9 Other dividends from foreign corporations not included on lines 3, 6, or 7 . . . . . . .

10 Foreign dividend gross up (section 78) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 Other dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12 Total dividends. Add lines 1 through 11. Enter here and on line 9, Schedule F . . .

-10-

Instructions For Form 1120-Fsc - 2007 Page 10

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