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designating the shareholder’s share of

If the total adjustment to be entered

States. You are required to give us the

foreign taxes paid to each country or

on line 24 is a negative amount, enter

information. We need it to ensure that

possession and the share of the

the amount in parentheses.

you are complying with these laws and

dividend that represents income

to allow us to figure and collect the right

derived from sources within each

amount of tax. Section 6109 requires

Schedule M–1

country or possession. The notice must

return preparers to provide their

be mailed to the shareholders no later

identifying numbers on the return.

than 60 days after the end of the RIC’s

Reconciliation of Income

You are not required to provide the

tax year.

information requested on a form that is

(Loss) per Books With

For further information, see

subject to the Paperwork Reduction Act

Income per Return

Regulations section 1.853-4.

unless the form displays a valid OMB

control number. Books or records

Line 5d. Travel and Entertainment.

relating to a form or its instructions

Include on line 5d any of the following:

•

Schedule L–Balance

must be retained as long as their

Meals and entertainment not

contents may become material in the

deductible under section 274(n).

Sheets per Books

•

administration of any Internal Revenue

Expenses for the use of an

The balance sheet should agree with

law. Generally, tax returns and return

entertainment facility.

•

the RIC’s books and records.

information are confidential, as required

The part of business gifts over $25.

•

by section 6103.

Expenses of an individual over

Line 1. Cash. Include certificates of

$2,000, which are allocable to

deposit as cash on line 1.

The time needed to complete and

conventions on cruise ships.

file this form will vary depending on

Line 4. Tax-Exempt Securities.

•

Employee achievement awards over

individual circumstances. The

Include on this line:

$400.

estimated average time is:

1. State and local government

•

The cost of entertainment tickets

obligations, the interest on which is

Recordkeeping . . . . . . .

57 hr., 9 min.

over face value (also subject to the

excludible from gross income under

Learning about the law

50% limit under section 274(n)).

section 103(a), and

•

or the form . . . . . . . . . . 20 hr., 43 min.

The cost of skyboxes over the face

2. Stock in another mutual fund or

Preparing the form . . . . 36 hr., 16 min.

value of nonluxury box seat tickets.

RIC that distributed exempt-interest

•

Copying, assembling,

The part of luxury water travel not

dividends during the tax year of the

and sending the form to

deductible under section 274(m).

RIC.

•

the IRS . . . . . . . . . . . . .

4 hr., 1 min.

Expenses for travel as a form of

education.

Line 24. Adjustments to

If you have comments concerning

•

Other nondeductible travel and

Shareholders’ Equity. Examples of

the accuracy of these time estimates or

entertainment expenses.

adjustments to report on this line

suggestions for making this form

include:

For more information, see Pub. 542,

simpler, we would be happy to hear

•

Unrealized gains and losses on

Corporations.

from you. You can write to the Internal

securities held “available for sale.”

Revenue Service; Tax Products

Line 7. Tax-Exempt Interest. Include

•

Foreign currency translation

Coordinating Committee;

as interest on line 7 any

adjustments.

SE:W:CAR:MP:T:T:SP; 1111

exempt-interest dividends received by

•

The excess of additional pension

Constitution Ave., NW; IR-6406;

the RIC as a shareholder in a mutual

liability over unrecognized prior service

Washington, DC 20224. Do not send

fund or other RIC.

cost.

the tax form to this office. Instead, see

•

Privacy Act and Paperwork

Guarantees of employee stock

“Where To File” on page 3.

Reduction Act Notice. We ask for the

(ESOP) debt.

•

information on this form to carry out the

Compensation related to employee

Internal Revenue laws of the United

stock award plans.

-13-

Instructions For Form 1120-Ric - U.s. Income Tax Return For Regulated Investment Companies - 2006 Page 13

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