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income brackets. Any member may be

the cooperative’s first tax year in

6. Enter line 5 or the cooperative’s

entitled to all, some, or none of the

existence (regardless of its gross

share of the $9,925,000 taxable

taxable income bracket. However, the

receipts) or:

income bracket, whichever is

total amount for all members cannot

1. It was treated as a small

less . . . . . . . . . . . . . . . . . . .

exceed the total amount in each taxable

corporation exempt from the AMT for all

7. Subtract line 6 from line 5 . . . .

income bracket.

prior tax years beginning after 1997, and

8. Multiply line 2 by 15% . . . . . . .

2. Its average annual gross receipts

Line 2b. Enter Cooperative’s

for the 3-tax-year period (or portion

9. Multiply line 4 by 25% . . . . . . .

thereof during which the cooperative was

10. Multiply line 6 by 34% . . . . . . .

in existence) ending before its tax year

Members of a controlled group are

beginning in 2004 did not exceed $7.5

treated as one group to figure the

11. Multiply line 7 by 35% . . . . . . .

million ($5 million if the cooperative had

applicability of the additional 5% tax and

12. If the taxable income of the

only 1 prior tax year).

the additional 3% tax. If an additional tax

controlled group exceeds

applies, each member will pay that tax

$100,000, enter this member’s

For more details, see the Instructions

based on the part of the amount used in

share of the smaller of: 5% of

for Form 4626.

each taxable income bracket to reduce

the taxable income in excess of

that member’s tax. See section 1561(a). If

Line 6a. Foreign Tax Credit

$100,000, or $11,750. See

an additional tax applies, attach a

instructions for line 2b . . . . . . .

To find out when a cooperative can take

schedule showing the taxable income of

the credit for payment of income tax to a

13. If the taxable income of the

the entire group and how the cooperative

foreign country or U.S. possession, see

controlled group exceeds $15

figured its share of the additional tax.

million, enter this member’s

Form 1118, Foreign Tax

share of the smaller of: 3% of

Credit – Corporations.

Line 2b(1). Enter the cooperative’s share

the taxable income in excess of

of the additional 5% tax on line 2b(1).

Line 6b. Other Credits

$15 million, or $100,000. See

instructions for line 2b . . . . . . .

Line 2b(2). Enter the cooperative’s share

Possessions tax credit. The Small

of the additional 3% tax on line 2b(2).

Business Job Protection Act of 1996

14. Add lines 8 through 13. Enter

repealed the possessions credit.

here and on Schedule J, line 3.

Line 3. Income Tax

However, existing credit claimants may

qualify for a credit under the transitional

Most cooperatives figure their tax by

rules. See Form 5735, Possessions

using the Tax Rate Schedule next.

Deferred tax under section 1291. If the

Corporation Tax Credit (Under Sections

Exceptions apply to members of a

cooperative was a shareholder in a

936 and 30A).

controlled group (see the worksheet ).

passive foreign investment company

Nonconventional source fuel credit. A

(PFIC), and the cooperative received an

Tax Rate Schedule

credit is allowed for the sale of qualified

excess distribution or disposed of its

fuels produced from a nonconventional

investment in the PFIC during the year, it

If taxable income on Form 990-C, line 30, is:

source. Section 29 contains a definition of

must include the total increase in taxes

qualified fuels, provisions for figuring the

due under section 1291(c)(2) in the

Of the

But not

amount

credit, and other special rules. Attach a

amount entered on line 3, Schedule J. On

Over —

over —

Tax is:

over —

separate schedule to Form 990-C

the dotted line next to line 3, Schedule J,

showing the computation of the credit.

enter “Section 1291” and the amount.

$50,000

15%

Qualified electric vehicle (QEV) credit.

Do not include on line 3 any interest

50,000

75,000

$ 7,500 + 25%

50,000

Include on line 6b any credit from Form

75,000

100,000

13,750 + 34%

75,000

due under section 1291(c)(3). Instead,

8834, Qualified Electric Vehicle Credit.

100,000

335,000

22,250 + 39%

100,000

show the amount of interest owed in the

Vehicles that qualify for this credit are not

335,000

10,000,000

113,900 + 34%

335,000

bottom margin of page 1, Form 990-C,

10,000,000 15,000,000 3,400,000 + 35% 10,000,000

eligible for the deduction for clean-fuel

and enter “Section 1291 interest.” If the

15,000,000 18,333,333 5,150,000 + 38% 15,000,000

vehicles under section 179A.

cooperative has a tax due, include the

18,333,333

- - - - -

35%

interest due in the payment. If you would

Line 6c. General Business

otherwise receive a refund, reduce the

Credit

refund by the interest due. For details,

Members of a controlled group must

Enter the cooperative’s total general

see Form 8621.

attach to Form 990-C a statement

business credit.

showing the computation of the tax

Line 4. Alternative Minimum

If the cooperative is filing Form 8844,

entered on Schedule J, line 3.

Tax (AMT)

Empowerment Zone and Renewal

Tax Computation Worksheet for

Unless the cooperative is treated as a

Community Employment Credit, Form

Members of a Controlled Group

small corporation exempt from the AMT, it

8884, New York Liberty Zone Business

(keep for your records)

may owe AMT if it has any of the

Employee Credit, or Form 8835 (see list

adjustments and tax preference items

below) with a credit from Section B, check

listed on Form 4626, Alternative Minimum

the “Form(s)” box, enter the form number

Note. Each member of a controlled group must

compute its tax using this worksheet.

Tax – Corporations. The cooperative must

in the space provided, and include the

file Form 4626 if its taxable income (or

allowable credit on line 6c.

1. Enter taxable income (line 30,

loss) before the NOL deduction combined

page 1) . . . . . . . . . . . . . . . . .

If the cooperative is required to file

with these adjustments and tax

Form 3800, General Business Credit,

2. Enter line 1 or the cooperative’s

preference items is more than the lesser

check the “Form 3800” box and include

share of the $50,000 taxable

of:

the allowable credit on line 6c. If the

•

income bracket, whichever is

$40,000, or

cooperative is not required to file Form

less . . . . . . . . . . . . . . . . . . .

•

The cooperative’s allowable exemption

3800, check the “Form(s)” box, enter the

3. Subtract line 2 from line 1 . . . .

amount (from Form 4626).

form number (from the list below) in the

See Form 4626 for details.

space provided, and include on line 6c

4. Enter line 3 or the cooperative’s

share of the $25,000 taxable

the allowable credit from the applicable

Exemption for small corporations. A

income bracket, whichever is

form.

cooperative is treated as a small

•

less . . . . . . . . . . . . . . . . . . .

corporation exempt from the AMT for its

Investment Credit (Form 3468).

•

tax year beginning in 2004 if that year is

Work Opportunity Credit (Form 5884).

5. Subtract line 4 from line 3 . . . .

-18-

Instructions For Form 990-C - Farmers' Cooperative Association Income Tax Return - Internal Revenue Service - 2004 Page 18

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