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

ADVERTISEMENT

secondary activities that exceeds 20% of
Part II. Other Information
Part III. Vessel Information
line G(1).
With respect to Parts III and IV, complete
Attach a schedule showing
Question E
a separate column for each qualifying
computations for lines G(2)(a) and (b).
The term “electing group” means a
vessel. If the corporation has more than 4
Example 1. The corporation has
controlled group of which one or more
qualifying vessels, attach separate sheets
gross income from core qualifying
members is an electing corporation.
for Parts III and IV using the same size
activities of $20 million and gross income
and format as Form 8902. Also, on line
The term “controlled group” means any
from secondary activities of $5 million.
29, enter the sum of all columns of Part
group which would be treated as a single
The corporation enters $20 million on line
IV, line 28.
employer under section 52(a) or (b) if
G(1), $4 million (20% of $20 million) on
sections 52(a)(1) and (2) did not apply.
Line 9. Type of ownership
line G(2)(a), and $1 million (gross income
Line G(1). Core qualifying
Indicate in each column the type of
from secondary activities of $5 million
activities
ownership for the vessel. Enter “O” for an
less the $4 million limit) on line G(2)(b).
owned vessel, “L” for a leased vessel,
Enter on line G(1) the corporation’s gross
Example 2. The same facts as
and “CL” for a capitalized lease.
income from core qualifying activities.
above except the corporation has gross
Attach a schedule.
Line 10. Type of vessel use
income from secondary activities of $3
million. The corporation would enter $3
For purposes of this election, the term
Indicate in each column the type of vessel
“core qualifying activities” means activities
million on line G(2)(a) and zero on line
use. Enter “BB” for bareboat charter out,
in operating qualifying vessels in United
G(2)(b). Gross income from secondary
“TC” for time charter out, and “OI” for
States foreign trade.
activities of $3 million is less than the $4
operating income.
million limit.
Line G(2). Qualifying secondary
Part IV. Notional Shipping
Line G(3). Qualifying incidental
activities
activities
Income
For purposes of this election, the term
‘‘qualifying secondary activities’’ means
For purposes of this election, the term
Line 21. Ownership percentage
secondary activities (defined below) but
“qualifying incidental activities” means
only to the extent that the gross income
shipping-related activities if:
Enter the corporation’s percentage of
derived by the corporation from such
ownership in the vessel. If for any period
1. They are incidental to the
activities does not exceed 20% of the
two or more persons are operators of a
corporation’s core qualifying activities,
gross income derived by the corporation
qualifying vessel, the notional shipping
2. They are not qualifying secondary
from its core qualifying activities.
income from the operation of such vessel
activities, and
for that period must be allocated among
Secondary activities. The term
3. The gross income derived by the
the operators on the basis of their
‘‘secondary activities’’ means:
corporation from such activities does not
respective ownership, charter, and
The active management or operation of
exceed 0.1% of the corporation’s gross
operating agreement interests in the
vessels other than qualifying vessels in
income from its core qualifying activities.
vessel.
the U.S. foreign trade,
Line G(3)(a). Amount included in the
The provision of vessel, barge,
Paperwork Reduction Act Notice. We
0.1% limit. Enter on line G(3)(a) the
container, or cargo-related facilities or
ask for the information on this form to
corporation’s gross income from
services to any person,
carry out the Internal Revenue laws of the
incidental activities that does not exceed
Other activities of the electing
United States. You are required to give us
0.1% of line G(1).
corporation and other members of its
the information. We need it to ensure that
Electing groups. In the case of an
electing group that are an integral part of
you are complying with these laws and to
electing group, the above rules are
its business of operating qualifying
allow us to figure and collect the right
applied as if the group were one entity,
vessels in U.S. foreign trade, including:
amount of tax.
and the 0.1% limitation is allocated
1. Ownership or operation of barges,
You are not required to provide the
among the corporations in the group.
containers, chassis, and other equipment
information requested on a form that is
Line G(3)(b). Amount that exceeds the
that are the complement of, or used in
subject to the Paperwork Reduction Act
0.1% limit. Enter on line G(3)(b) the
connection with, a qualifying vessel in
unless the form displays a valid OMB
corporation’s gross income from
U.S. foreign trade,
control number. Books or records relating
incidental activities that exceeds 0.1% of
2. The inland haulage of cargo
to a form or its instructions must be
line G(1).
shipped, or to be shipped, on qualifying
retained as long as their contents may
vessels in U.S. foreign trade, and
Attach a schedule showing
become material in the administration of
3. The provision of terminal,
computations for lines G(3)(a) and (b).
any Internal Revenue law. Generally, tax
maintenance, repair, logistical, or other
Line H. Gross income from
returns and return information are
vessel, barge, container, or cargo-related
confidential, as required by section 6103.
qualifying shipping activities
services that are an integral part of
excluded from gross income on
The time needed to complete and file
operating qualifying vessels in U.S.
this form will vary depending on individual
the corporation’s income tax
foreign trade.
circumstances. The estimated average
return
The term “secondary activities” does
time is: Recordkeeping, 11 hr., 43 min.;
not include any core qualifying activities.
Enter on line H the total of lines G(1),
Learning about the law or the form, 1
Line G(2)(a). Amount included in 20%
G(2)(a), and G(3)(a). Do not include this
hr., 3 min.; Preparing the form, 2 hr., 13
limit. Enter on line G(2)(a) the
amount in gross income on the
min.; Copying, assembling, and
corporation’s gross income from
corporation’s Form 1120 or Form 1120-F.
sending the form to the IRS, 16 min.
secondary activities that does not exceed
Furthermore, do not include on the
If you have comments concerning the
20% of line G(1).
corporation’s Form 1120 or Form 1120-F
accuracy of these time estimates or
any item of loss, deduction, or credit with
Electing groups. In the case of an
suggestions for making this form simpler,
respect to this line H excluded income.
electing group, the above rules are
we would be happy to hear from you. See
applied as if the group were one entity,
Note: The amounts entered on lines
the instructions for the tax return with
and the 20% limitation is allocated among
G(2)(b) and G(3)(b) must be included in
which this form is filed.
the corporations in the group.
gross income on the corporation’s Form
1120 or Form 1120-F.
Line G(2)(b). Amount that exceeds the
20% limit. Enter on line G(2)(b) the
corporation’s gross income from
-2-

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category: Financial
Go
Page of 2