Form 1120-Ric - Instructions Income Tax - 2001 (Page 10 of 12) in pdf

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Schedule J. On the dotted line to the left of line

Work Opportunity Credit (Form 5884).

within 3 years of the date the vehicle was

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3d, Schedule J, write “Section 1291” and the

Credit for Alcohol Used as Fuel (Form 6478).

placed in service, it ceases to qualify for the

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amount.

Credit for Increasing Research Activities

credit. See Regulations section 1.30-1 for

(Form 6765).

details on how to figure the recapture.

Do not include on line 3d any interest due

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Low-Income Housing Credit (Form 8586).

under section 1291(c)(3). Instead, show the

Recapture of Indian employment credit.

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Orphan Drug Credit (Form 8820).

amount of interest owed in the bottom margin

Generally, if an employer terminates the

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Disabled Access Credit (Form 8826).

of page 1, Form 1120-RIC, and write “Section

employment of a qualified employee less than

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Enhanced Oil Recovery Credit (Form 8830).

1291 interest.” For details, see Form 8621,

1 year after the date of initial employment, any

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Renewable Electricity Production Credit

Return by a Shareholder of a Passive Foreign

Indian employment credit allowed for a prior

(Form 8835).

Investment Company or Qualified Electing

tax year because of wages paid or incurred to

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Empowerment Zone Employment Credit

Fund.

that employee must be recaptured. For details,

(Form 8844). While the empowerment zone

see Form 8845 and section 45A.

Additional tax under section 197(f). A fund

employment credit is a part of the general

that elects to pay tax on the gain from the sale

Interest due on:

business credit, it is figured separately on Form

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of an intangible under the related person

Deferred tax attributable to (a) installment

8844 and never carried to Form 3800.

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exception to the anti-churning rules should

sales of certain timeshares and residential lots

Indian Employment Credit (Form 8845).

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include any additional tax due under section

(section 453(l)(3)) and (b) certain nondealer

Credit for Employer Social Security and

197(f)(9)(B) in the total for line 3d. On the

installment obligations (section 453A(c)).

Medicare Taxes Paid on Certain Employee

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dotted line next to line 3d, write “Section 197”

Deferred gain (section 1260(b)).

Tips (Form 8846).

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and the amount. For more information, see

Built-in gains tax. If a C corporation elected

Credit for Contributions to Selected

Pub. 535.

to be taxed as RIC for a tax year beginning

Community Development Corporations (Form

before January 2, 2002, or transferred property

8847).

Line 4a– Foreign Tax Credit

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Welfare-to-Work Credit (Form 8861).

in a carryover basis transaction to a RIC prior

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To find out when a fund can take this credit for

to January 2, 2002, the C corporation is

New Markets Credit (Form 8874).

payment of income tax to a foreign country or

subject to deemed sale treatment on the

U.S. possession, see Form 1118, Foreign Tax

Line 4d – Credit for Prior

transferred assets unless the fund elects to pay

Credit – Corporations. The fund may not claim

tax on the built-in gain under section 1374

Year Minimum Tax

this credit if an election under section 853 was

during the 10-year period beginning on its first

To figure the minimum tax credit and any

made for the tax year. See Question 10,

day as a RIC or the day it acquired the assets

carryforward of that credit, use Form 8827,

Schedule K, on page 11.

in a carryover basis transaction. Recognized

Credit for Prior Year Minimum Tax —

built-in gains and losses on which a fund pays

Line 4b

Corporations. Also see Form 8827 if any of the

tax generally retain their character (e.g.,

fund’s 2000 nonconventional source fuel credit

If the fund can take either of the following

ordinary income or capital gain) and are

or qualified electric vehicle credit was

credits, check the appropriate box(es) and

treated the same as other gains or losses of

disallowed solely because of the tentative

include the amount of the credits in the total for

the fund. The fund’s tax on net recognized

minimum tax limitation. See section 53(d).

line 4b.

built-in gain is treated as a loss sustained by

the fund after October 31 of the same tax year.

Nonconventional source fuel credit. A credit

Line 6– Personal

is allowed for the sale of qualified fuels

See Temporary Regulations section

Holding Company Tax

1.337(d)-6T for more details. A fund may elect

produced from a nonconventional source.

A fund is taxed as a personal holding company

to be taxed on a built-in gain (a section 1374

Section 29 contains a definition of qualified

under section 542 if:

election) by attaching a statement to Form

fuels, provisions for figuring the credit, and

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At least 60% of its adjusted ordinary gross

1120-RIC in accordance with Temporary

other special rules. Attach a separate schedule

income for the tax year is personal holding

Regulations section 1.337(d)-6T(c)(4). A

to the return showing the computation of the

company income and

separate election is required for each

credit.

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At any time during the last half of the tax

transaction. The fund may also rely on

Qualified electric vehicle credit. Use Form

year more than 50% in value of its outstanding

Temporary Regulations section 1.337(d)-5T to

8834, Qualified Electric Vehicle Credit, if the

stock is owned, directly or indirectly, by five or

make the election and figure the tax.

corporation can claim a credit for the purchase

fewer individuals.

of a new qualified electric vehicle. Vehicles that

Different rules apply to transfers of property

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

qualify for this credit are not eligible for the

in a carryover basis transaction that occur after

Personal Holding Company (PHC) Tax, for

deduction for clean-fuel vehicles under section

January 1, 2002. For property transfers after

definitions and details on how to figure the tax.

179A.

this date, the fund is required to pay the built-in

gains tax under section 1374 unless the C

Line 7– Other Taxes

Line 4c– General Business Credit

corporation elects deemed sale treatment. See

Include any of the following taxes and interest

Temporary Regulations section 1.337(d)-7T for

Check the Form 3800 box, complete Form

in the total on line 7. Check the appropriate

3800, General Business Credit, and enter the

details.

box(es) for the form, if any, used to compute

total of the credits on line 4c if the fund has any

Worksheet instruction. Complete the

the total.

of the following:

worksheet on page 11 to figure the built-in

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More than one of the general business

Recapture of Investment Credit

gains tax under Temporary Regulations section

credits listed below (other than the

1.337(d)-6T or 1.337(d)-7T.

If the fund disposed of investment credit

empowerment zone employment credit),

property or changed its use before the end of

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Line 1. Enter the amount that would be the

General credits from an electing large

its useful life or recovery period, it may owe a

taxable income of the fund for the tax year if

partnership shown in box 7 of Schedule K-1

tax. See Form 4255, Recapture of Investment

only recognized built-in gain, recognized

(Form 1065-B),

Credit.

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built-in loss, and recognized built-in gain

A credit carryforward or carryback of any of

carryover were taken into account.

these credits (other than the empowerment

Recapture of Low-Income Housing

Line 2. Add the amounts shown on Form

zone employment credit),

Credit

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A trans-Alaska pipeline liability fund credit, or

1120-RIC, page 1, line 24; Form 1120-RIC,

If the fund disposed of property (or there was a

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Part II, line 1; and Form 2438, line 11. For this

Any of these credits (other than the

reduction in the qualified basis of the property)

purpose, refigure line 24 on page 1 of Form

low-income housing credit and the

for which it took the low-income housing credit,

empowerment zone employment credit that is

1120-RIC without regard to any election under

it may owe a tax. See Form 8611, Recapture

section 852(b)(2)(F). Enter the result on line 2

from a passive activity).

of Low-Income Housing Credit.

of the worksheet on page 11.

Note: A fund filing Form 3800 and Form

Other

8844, Empowerment Zone Employment Credit,

Line 3. The fund’s net unrealized built-in

would check both the “Form 3800” box and the

Additional taxes and interest amounts may be

gain is the amount, if any, by which the fair

“Form(s)” box, write “8844” in the space

market value of the assets of the fund at the

included in the total entered on line 7. Check

provided, and enter the total of the credits on

beginning of its first RIC year (or as of the date

the box for “Other” if the fund includes any of

line 4c.

the taxes and interest discussed below. See

the assets were acquired, for any asset with a

basis determined by reference to its basis (or

How to report, on page 11, for details on

If the fund is not required to file Form 3800,

the basis of any other property) in the hands of

reporting these amounts on an attached

attach the applicable form(s) listed in

schedule.

a C corporation) exceeds the aggregate

parentheses below. Check the “Form(s)” box,

adjusted basis of such assets at that time.

write the form number(s) in the space provided,

Recapture of qualified electric vehicle

and enter the total of the credit(s) on line 4c.

(QEV) credit. The fund must recapture part of

Enter on line 3 the fund net unrealized

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Investment Credit (Form 3468).

the QEV credit it claimed in a prior year, if

built-in gain reduced by the net recognized

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Form 1120-Ric - Instructions Income Tax - 2001 Page 10

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