Fillable Form 1120-Fsc - Transfer Price Or Commission (Page 2 of 3) in pdf

Schedule P (Form 1120-FSC) (Rev. 12-2008)

Page

Schedule P, entering only the taxpayer’s

General Instructions

Specific Instructions

name and employer identification

number (EIN) at the top of Schedule P.

Purpose of Schedule

Item A–Product or Product Line. Enter

Also, check box 1b. Attach a tabular

the product or product line that meets

Use Schedule P to figure an allowable

schedule to the partially completed

one of the two standards below.

transfer price to charge the FSC or an

Schedule P, reporting all information as

1. The principal product based on the

allowable commission to pay to the FSC

if a separate Schedule P were filed for

North American Industry Classification

under the administrative pricing rules

each aggregate of transactions

System (NAICS) (see the last page of the

discussed below. The transfer price or

described in 1a above. Also see Format

Instructions for Form 1120-FSC) or

commission is used to allocate foreign

of tabular schedules on page 3.

2. A recognized industry or trade use.

trading gross receipts from the sale of

Note. To be eligible for either of the

Note. If the FSC used the Standard

export property or from certain services

aggregate reporting formats described

Industrial Classification (SIC) codes for

between the FSC and its related

above in 1a or 1b, the FSC and its

Schedule P in prior tax years, it may

supplier.

related supplier must maintain a

complete item A based on the SIC

Related supplier. Under Regulations

supporting schedule that contains all

codes for the current tax year.

section 1.482-1(a), a related supplier is

information that would be reported if a

Item B–Basis of Reporting. The FSC

an entity that is owned or controlled

separate Schedule P were filed for each

must indicate the basis on which the

directly or indirectly by the same

transaction. The supporting schedule

amounts on Schedule P were

interests as the FSC.

should not be filed with the Schedule P.

determined using either the

c. Tabular schedule of transactions.

Filing the Schedule

transaction-by-transaction basis or an

Instead of aggregate reporting, the FSC

election to group transactions.

may choose to report transactions on a

File the schedule for a FSC that has

Except for certain small FSCs electing

tabular schedule. File one Schedule P,

foreign trading gross receipts during the

to group transactions (discussed below),

entering only the taxpayer’s name and

tax year from:

FSCs should not file a separate

EIN at the top of Schedule P. Also,

The resale of export property or from

Schedule P for each transaction or each

check box 1c. Attach a tabular schedule

certain services or

group of transactions.

to the partially completed Schedule P,

The disposition of export property or

1. Transaction-by-transaction. If the

reporting all information as if a separate

from services in which the FSC served

FSC makes pricing determinations

Schedule P were filed for each

as commission agent for a related

based on each transaction rather than

transaction. Also see Format of tabular

supplier.

an election to group transactions, check

schedules on page 3.

box 1a, box 1b, or box 1c depending on

2. Group of transactions. The FSC’s

When Not To File

the FSC’s preferred reporting format.

related supplier may elect to group

Do not complete Schedule P (or an

a. Aggregate on Schedule P. If the

transactions by product or product line

alternate format) in the following three

FSC chooses to aggregate its

in making pricing determinations. The

situations.

transactions on one or more Schedules

grouping of transactions applies to all

1. The section 482 method of transfer

P, check box 1a.

transactions completed during the tax

pricing is used. If the 23% and 1.83%

year for that product or product line. Do

Aggregate on one Schedule P those

methods (see the instructions for

not group sale and lease transactions.

transactions for which the same

Sections B and C on page 3) do not

administrative pricing method is applied,

To make the election, complete one

apply to a sale or if the related supplier

provided all the transactions are

Schedule P, entering only the taxpayer’s

does not choose to use them, the

included in the same product or product

name and EIN at the top of Schedule P.

transfer price for a sale by the related

line indicated in item A.

Also, check box 2 of item B and attach

supplier to the FSC is figured on the

a tabular schedule to the partially

Aggregate on separate Schedules P

basis of the sales price actually charged

completed Schedule P, reporting all

those transactions for which the same

but is subject to section 482 and its

information as if a separate Schedule P

pricing method is applied in each

regulations and to Temporary

were filed for each group of transactions

separate product line.

Regulations section 1.925(a)-1T(a)(3)(ii).

(see Format of tabular schedules on

If a different pricing method is applied

2. The arm’s-length pricing method is

page 3).

to some of the transactions in one or

used. If the transaction is with an

Note. If a grouping basis is elected,

more of the separate product lines,

unrelated supplier, the FSC bases its

aggregate reporting is not permitted.

additional Schedules P must be filed.

profit on the arm’s-length price.

Attach Schedule P to Form 1120-FSC.

Example. If the 23% of combined

3. Transactions are incomplete at the

Once the election is made, grouping

taxable income method applies to

end of the year. If export property

redeterminations are permitted no later

transactions in three separate product

bought by the FSC from the related

than one year after the due date of the

lines (as indicated in item A), the FSC

supplier during the tax year is unsold by

FSC’s timely filed (including extensions)

would file three aggregate Schedules P.

the end of the FSC’s tax year or the

Form 1120-FSC. For details, see

However, if the FSC uses the 1.83% of

related supplier’s tax year in which the

Regulations section 1.925(a)-1(c)(8).

foreign trading gross receipts method for

property was transferred, the 23% and

some of the transactions in one of the

Small FSC. If the FSC elected to be a

1.83% methods cannot be used.

product lines, the FSC would file four

small FSC under section 922(b) and has

Instead, the transfer price of the

aggregate Schedules P.

foreign trading gross receipts of $5

property bought by the FSC is the

million or less for the tax year, the small

b. Aggregate on tabular schedule. The

supplier’s cost of goods sold for the

FSC may file a separate Schedule P for

FSC may choose to aggregate its

property. See Temporary Regulations

each group of transactions instead of

transactions on a tabular schedule rather

section 1.925(a)-1T(c)(5)(i)(C) for rules

filing a tabular schedule.

than on Schedule P. To do so, file one

regarding the transfer price of property

resold during the subsequent tax year.

Form 1120-Fsc - Transfer Price Or Commission Page 2

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