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section 851(e)). See sections 851(b)(3) and

stock of the RIC that is preferred over all other

General Instructions

851(c).

classes or series for that portfolio of assets.

3. At the end of each quarter of the RIC’s

When To File

tax year, no more than 25% of the value of the

Purpose of Form

RIC’s assets may be invested in the securities

Generally, a RIC must file its income tax return

(excluding government securities or securities

Use Form 1120-RIC, U.S. Income Tax Return

by the 15th day of the 3rd month after the end

of other RICs) of a single issuer or in the

for Regulated Investment Companies, to report

of its tax year. A new RIC filing a short period

securities of two or more issuers controlled by

the income, gains, losses, deductions, credits,

return must generally file by the 15th day of the

the RIC and engaged in the same or related

and to figure the income tax liability of a

3rd month after the short period ends. A RIC

trades or businesses. See sections 851(b)(3)

regulated investment company (RIC) as

that has dissolved must generally file by the

and 851(c).

defined in section 851.

15th day of the 3rd month after the date it

4. The RIC’s deduction for dividends paid

dissolved.

Who Must File

for the tax year (as defined in section 561, but

If the due date falls on a Saturday, Sunday,

without regard to capital gain dividends) equals

A domestic corporation that meets certain

or legal holiday, the RIC may file on the next

or exceeds the sum of:

conditions (discussed below) must file Form

•

business day.

90% of its investment company taxable

1120-RIC if it elects to be treated as a RIC for

income determined without regard to section

Private delivery services

the tax year (or has made an election for a

852(b)(2)(D); and

prior tax year and the election has not been

•

RICs can use certain private delivery services

90% of the excess of the RIC’s interest

terminated or revoked). The election is made

designated by the IRS to meet the “timely

income excludable from gross income under

by computing taxable income as a RIC on

mailing as timely filing/paying” rule for tax

section 103(a) over its deductions disallowed

Form 1120-RIC.

returns and payments.

under sections 265 and 171(a)(2).

These private delivery services include only

5. The RIC must have (a) been a RIC for

General Requirements To

the following.

all tax years ending after November 7, 1983, or

•

Qualify as a RIC

DHL Express (DHL): DHL Same Day

(b) had at the end of the current tax year, no

Service, DHL Next Day 10:30 am, DHL Next

accumulated earnings and profits from any

The term “regulated investment company”

Day 12:00 pm, DHL Next Day 3:00 pm, and

non-RIC tax year.

(RIC) applies to any domestic corporation that:

DHL 2nd Day Service.

•

Is registered with the Securities and

Federal Express (FedEx): FedEx Priority

Note. For this purpose, distributions after 2003

Exchange Commission (SEC) throughout the

Overnight, FedEx Standard Overnight, FedEx

are treated as made from the earliest earnings

tax year as a management company or unit

2Day, FedEx International Priority, and FedEx

and profits accumulated in any non-RIC tax

investment trust under the Investment

International First.

year. See section 852(c)(3). Also see section

Company Act of 1940 (the ICA),

•

United Parcel Service (UPS): UPS Next Day

•

852(e) for procedures that may allow the RIC

Has an election in effect under the ICA to be

Air, UPS Next Day Air Saver, UPS 2nd Day

to avoid disqualification for the initial year the

treated as a business development company,

Air, UPS 2nd Day Air A.M., UPS Worldwide

RIC did not meet the requirement under 5(b)

Express Plus, and UPS Worldwide Express.

•

above.

Is a common trust fund or similar fund that is

The private delivery service can tell you

neither an investment company under section

Definition of a Fund

how to get written proof of the mailing date.

3(c)(3) of the ICA nor a common trust fund as

defined under section 584(a).

The term “fund” as used in these instructions

Private delivery services cannot deliver

and Form 1120-RIC, refers to a separate

items to P.O. boxes. You must use the

Other Requirements

portfolio of assets, whose beneficial interests

U.S. Postal Service to mail any item to

CAUTION

are owned by the holders of a class or series of

an IRS P.O. box address.

In addition, the RIC must meet all of the

requirements listed below:

1. At least 90% of its gross income

Where To File

(including tax-exempt interest income) must be

derived from the following items.

•

Dividends,

•

File the RIC’s return at the applicable IRS address listed below.

Interest,

•

Payments with respect to securities loans

If the RIC’s principal

And the total assets at the

Use the following Internal

(as defined in section 512(a)(5)),

•

Gains from the sale or other disposition

business, office, or agency

end of the tax year (Form

Revenue Service Center

of stock or securities (as defined in ICA section

is located in:

1120-RIC, page 1, item D)

address:

2(a)(36)) or foreign currencies,

are:

•

Other income (including gains from

Connecticut, Delaware, District

options, futures, or forward contracts) derived

of Columbia, Illinois, Indiana,

from the RIC’s business of investing in such

stock, securities, or currencies, and

Kentucky, Maine, Maryland,

•

Net income derived from an interest in a

Massachusetts, Michigan, New

Less than $10 million

Cincinnati, OH 45999-0012

qualified publicly traded partnership (as defined

Hampshire, New Jersey, New

in section 851(h).

York, North Carolina, Ohio,

Income from a partnership or trust qualifies

Pennsylvania, Rhode Island,

under the 90% test to the extent the RIC’s

South Carolina, Vermont,

$10 million or more

Ogden, UT 84201-0012

distributive share of such income is from items

Virginia, West Virginia,

described above as realized by the partnership

Wisconsin

or trust.

Alabama, Alaska, Arizona,

Income that a RIC receives in the normal

course of business as a reimbursement from

Arkansas, California,

its investment advisor is qualifying income for

Colorado, Florida, Georgia,

purposes of the 90% test if the reimbursement

Hawaii, Idaho, Iowa, Kansas,

is includible in the RIC’s gross income.

Louisiana, Minnesota,

2. At the end of each quarter of the RIC’s

Mississippi, Missouri,

Any amount

Ogden, UT 84201-0012

tax year, at least 50% of the value of its assets

Montana, Nebraska, Nevada,

must be invested in the following items.

New Mexico, North Dakota,

•

Cash and cash items (including

Oklahoma, Oregon, South

receivables),

Dakota, Tennessee, Texas,

•

Government securities,

Utah, Washington, Wyoming

•

Securities of other RICs, and

•

Securities of other issuers, except that

the investment in a single issuer of securities

A group of corporations with members located in more than one service center area will often

may not exceed 5% of the value of the RIC’s

keep all the books and records at the principal office of the managing corporation. In this case, the

assets or 10% of the outstanding voting

tax returns of the corporations may be filed with the service center for the area in which the

securities of the issuer (except as provided in

principal office of the managing corporation is located.

-2-

Instructions For Form 1120-Ric - U.s. Income Tax Return For Regulated Investment Companies - 2004 Page 2

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