Instructions For Schedule S (Form 1120-F) - 2010 (Page 3 of 4) in pdf

17, 2010, no person otherwise treated as

schedule that uses the same format as

meaning of section 958(a) and

a qualified shareholder under Regulations

lines 10a and 10b.

Regulations section 1.883-3(b)(4)) by

section 1.883-4(b) may be treated for

qualified U.S. persons.

Line 10b(ii). Enter the applicable

purposes of Regulations section

two-letter codes from the list of country

Line 13. Specify the days of the foreign

1.883-2(d)(3) as a qualified shareholder if

codes at

corporation’s tax year during which it was

such person’s interest in the foreign

a CFC (as defined in section 957(a)).

Part III — Stock

corporation, or in any intermediary

corporation, is held through bearer shares

Part IV — Qualified

Ownership

that are not maintained in a

Shareholder Stock

dematerialized or immobilized book-entry

Test for Controlled

system during the relevant period. See

Ownership Test

Foreign Corporations

Regulations section 1.883-2(d)(3)(ii).

A foreign corporation satisfies the stock

For purposes of the above rules, a 5%

ownership test of Regulations section

shareholder is a person who owns at

1.883-1(c)(2) if more than 50% of the

1.883-1(c)(2) if it satisfies the qualified

least 5% of the total vote and value of the

value of its outstanding shares is owned,

U.S. person ownership test (see below)

outstanding shares of a class of stock.

or treated as owned, by applying the

and it satisfies the substantiation

For these purposes, persons related

attribution rules of Regulations section

requirements of Regulations section

within the meaning of section 267(b) shall

1.883-4(c), for at least half of the number

1.883-3(c).

be treated as one person. In determining

of days in the foreign corporation’s tax

Qualified U.S. person ownership test.

whether two or more corporations are

year by one or more qualified

This test is met only if:

members of the same controlled group

shareholders, as defined below. A

under section 267(b)(3), a person is

1. The foreign corporation is a CFC

shareholder may be a qualified

considered to own stock owned directly

(as defined in section 957(a)) for more

shareholder with respect to one category

by such person, stock owned through the

than half the days in the corporation’s tax

of income while not being a qualified

application of section 1563(e)(1), and

year, and

shareholder with respect to another. A

stock owned through the application of

2. More than 50% of the total value of

foreign corporation will not be considered

section 267(c). In determining whether a

its outstanding stock is owned (within the

to satisfy the qualified shareholder stock

corporation is related to a partnership

meaning of section 958(a) and

ownership test unless the foreign

under section 267(b)(10), a person is

Regulations section 1.883-3(b)(4)) by one

corporation meets the substantiation and

considered to own the partnership interest

or more qualified U.S. persons (defined

reporting requirements described in

owned directly by such person and the

below) for more than half the days of the

Regulations section 1.883-4(d) and (e).

partnership interest owned through the

CFC’s tax year, provided such days of

A shareholder is a qualified

application of section 267(e)(3).

ownership are concurrent with the time

shareholder only if the shareholder:

period during which the foreign

Note. An investment company (as

1. With respect to the category of

corporation was a CFC (as defined in

defined in Regulations section

income for which the foreign corporation

item 1 above).

1.883-2(d)(3)(iii)(B)) shall not be treated

is seeking an exemption, is:

as a 5% shareholder.

(A) An individual who is a resident of a

A qualified U.S. person is a U.S. citizen,

Line 8. Enter on line 8 a description of

qualified foreign country. An individual

resident alien, domestic corporation, or

each class of stock the foreign

is a resident of a qualified foreign

domestic trust described in section

corporation relied upon to satisfy the

country only if the individual is fully

501(a), but only if the person provides the

requirements of the “regularly traded” test

liable to tax as a resident in such

CFC with an ownership statement as

described on page 2. The description

country (e.g., an individual who is

described in Regulations section

must include:

liable to tax on a remittance basis in a

1.883-3(c)(2), and the CFC meets the

•

An indication as to whether the class

foreign country will not be treated as a

reporting requirements of Regulations

of stock was issued in registered or

resident of that country unless all

section 1.883-3(d) with respect to that

bearer form and, for tax years beginning

residents of that country are taxed on

person.

on or after September 17, 2010, whether

a remittance basis only) and, in

Line 11. Enter the percentage of the

such bearer shares were maintained in a

addition (1) the individual has a tax

value of the shares of the CFC that is

dematerialized or immobilized book-entry

home, within the meaning of

owned by all qualified U.S. persons

system.

Regulations section 1.883-4(b)(2)(ii), in

•

identified in the qualified ownership

The number of issued and outstanding

that qualified foreign country for 183

statements. In determining the

shares in that class of stock as of the

days or more of the tax year or (2) the

percentage to enter on line 11, the

close of the tax year, and

individual is treated as a resident of a

•

numerator is the total value of the CFC’s

The value of each class of stock in

qualified foreign country based on

outstanding stock that is owned (within

relation to the total value of all the

special rules pursuant to Regulations

the meaning of section 958(a) and

corporation’s shares outstanding as of the

section 1.883-4(d)(3).

Regulations section 1.883-3(b)(4)) by all

close of the tax year.

(B) The government of a qualified

qualified U.S. persons, not including the

foreign country (or a political

Line 9. See Regularly traded on page

value of any bearer shares. However, for

subdivision or local authority of such

2 for instructions for completing this line

tax years beginning on or after

country).

September 17, 2010, the rule stated in

the preceding sentence is amended to

Line 10. If the answer to line 9 is “Yes”

organized in a qualified foreign country

read, in part, “not including the value of

with respect to more than one class of the

and meets the publicly traded test of

any bearer shares, unless such shares

corporation’s stock, the foreign

Regulations section 1.883-2(a).

are maintained in a dematerialized or

(D) A not-for-profit organization

corporation must complete lines 10a and

immobilized book-entry system.” The

10b with respect to each such class. To

described in Regulations section

denominator is the total value of the

do so, complete these lines as follows:

1.883-4(b)(4) that is not a pension fund

CFC’s outstanding stock, including the

Complete line 10 of the actual schedule

as defined in Regulations section

value of any bearer shares.

for the class of stock with respect to

1.883-4(b)(5) and that is organized in a

which 5% shareholders own the largest

Line 12. Specify the days of the foreign

qualified foreign country.

percentage of the vote and value of the

corporation’s tax year during which more

(E) An individual beneficiary of a

outstanding shares of the class of stock.

than 50% of the total value of its

pension fund (as defined in

For all other classes of stock, attach a

outstanding stock was owned (within the

Regulations section 1.883-4(b)(5)(iv))

-3-

Instructions For Schedule S (Form 1120-F) - 2010 Page 3

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