Instructions For Form 8902 - Alternative Tax On Qualifying Shipping Activities Page 2

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On or before the 15th day of the 3rd
not exceed 20% of the gross income
$20 million) on line G(2)(a), and $1
month of the tax year will be effective
derived by the corporation from its
million (gross income from secondary
on the 1st day of that tax year.
core qualifying activities.
activities of $5 million less the $4
After the 15th day of the 3rd month
million limit) on line G(2)(b).
Secondary activities. The term
of the tax year will be effective the 1st
Example 2. The same facts as
"secondary activities" means:
day of the following tax year.
above except the corporation has
The active management or
gross income from secondary
operation of vessels other than
However, if the revocation specifies
activities of $3 million. The
qualifying vessels in the U.S. foreign
a date for revocation that is on or after
corporation would enter $3 million on
trade;
the day on which the revocation is
line G(2)(a) and zero on line G(2)(b).
The provision of vessel, barge,
made, the revocation will be effective
Gross income from secondary
container, or cargo-related facilities or
for tax years beginning on and after
activities of $3 million is less than the
services to any person; and
the date of revocation specified.
$4 million limit.
Other activities of the electing
Item D
corporation and other members of its
Line G(3). Qualifying Incidental
An election under section 1354(a) will
electing group that are an integral part
Activities
be terminated effective on and after
of its business of operating qualifying
For purposes of this election, the term
the date the corporation ceases to be
vessels in U.S. foreign trade,
“qualifying incidental activities” means
a qualifying vessel operator.
including:
shipping-related activities if:
1. Ownership or operation of
Election after termination. If a
1. They are incidental to the
barges, containers, chassis, and other
qualifying vessel operator made the
corporation's core qualifying activities,
equipment that are the complement
election under section 1354(a) and
of, or used in connection with, a
subsequently revoked the election
2. They are not qualifying
qualifying vessel in U.S. foreign trade;
(Item C) or ceased to be a qualifying
secondary activities, and
vessel operator (Item D), that operator
2. The inland haulage of cargo
3. The gross income derived by
(and any successor operator) is not
shipped, or to be shipped, on
the corporation from such activities
eligible to make another section
qualifying vessels in U.S. foreign
does not exceed 0.1% of the
1354(a) election for any tax year
trade; and
corporation's gross income from its
before the fifth tax year that begins
core qualifying activities.
3. The provision of terminal,
after the first tax year for which the
maintenance, repair, logistical, or
termination is effective, unless the IRS
Line G(3)(a). Amount included in
other vessel, barge, container, or
consents to the election.
the 0.1% limit. Enter on line G(3)(a)
cargo-related services that are an
the corporation's gross income from
integral part of operating qualifying
Part II. Other Information
incidental activities that does not
vessels in U.S. foreign trade.
exceed 0.1% of line G(1).
Question E
The term “secondary activities”
Electing groups. In the case of an
does not include any core qualifying
The term “electing group” means a
electing group, the above rules are
activities.
controlled group of which one or more
applied as if the group were one
members is an electing corporation.
Line G(2)(a). Amount included in
entity, and the 0.1% limitation is
20% limit. Enter on line G(2)(a) the
The term “controlled group” means
allocated among the corporations in
corporation's gross income from
any group which would be treated as
the group.
secondary activities that does not
a single employer under section 52(a)
Line G(3)(b). Amount that exceeds
exceed 20% of line G(1).
or (b) if sections 52(a)(1) and (2) did
the 0.1% limit. Enter on line G(3)(b)
not apply.
Electing groups. In the case of an
the corporation's gross income from
electing group, the above rules are
Line G(1). Core Qualifying
incidental activities that exceeds 0.1%
applied as if the group were one
of line G(1).
Activities
entity, and the 20% limitation is
Attach a schedule showing
Enter on line G(1) the corporation's
allocated among the corporations in
computations for lines G(3)(a) and (b).
gross income from core qualifying
the group.
activities. Attach a schedule.
Line H. Gross Income From
Line G(2)(b). Amount that exceeds
Qualifying Shipping Activities
For purposes of this election, the
the 20% limit. Enter on line G(2)(b)
term “core qualifying activities” means
Excluded From Gross Income
the corporation's gross income from
activities in operating qualifying
secondary activities that exceeds
on the Corporation's Income
vessels in U.S. foreign trade.
20% of line G(1).
Tax Return
Attach a schedule showing
Line G(2). Qualifying
Enter on line H the total of lines G(1),
computations for lines G(2)(a) and (b).
Secondary Activities
G(2)(a), and G(3)(a). Do not include
this amount in gross income on the
Example 1. The corporation has
For purposes of this election, the term
corporation's Form 1120 or Form
gross income from core qualifying
"qualifying secondary activities"
1120-F. Furthermore, do not include
activities of $20 million and gross
means secondary activities (defined
on the corporation's Form 1120 or
income from secondary activities of
below) but only to the extent that the
Form 1120-F any item of loss,
$5 million. The corporation enters $20
gross income derived by the
million on line G(1), $4 million (20% of
corporation from such activities does
-2-
Instructions for Form 8902 (Rev. 9-2017)

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