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self-dealing are corrected within the taxable

The allowable general banking services

Line 14. Payments. Generally, no

period.

are:

payments are allowed other than those on

Checking accounts, as long as the bank

lines 14a through 14d and the credit for

does not charge interest on any

backup withholding.

Definitions

overwithdrawals;

Backup withholding. If the fund had

Savings accounts, as long as the fund

Self-dealing. When determining if an act is

federal income tax withheld from any

may withdraw its money after giving no more

an act of self-dealing, treat the transfer of

payments it received because, for example,

than 30 days notice, without losing interest

personal property by a disqualified person to

it failed to give the payer its correct EIN,

for the period the money was on deposit; and

the fund as a sale or exchange if the property

include the amount withheld in the total for

Safekeeping activities (for example, rental

is subject to a mortgage or similar lien.

line 14f. Write the amount withheld and the

of a safe deposit box).

Otherwise, the term “self-dealing” means any

words “Backup Withholding” in the blank

direct or indirect:

Taxable period. For an act of self-dealing,

space above line 14f.

Sale, exchange, or leasing of real or

the term “taxable period” means the period

personal property between the fund and a

Line 15. Estimated tax penalty. A fund

beginning on the date of the act of

disqualified person;

that does not make estimated tax payments

self-dealing and ending on the date of the

Lending of money or other extensions of

when due may be subject to an

earliest of—

credit between the fund and a disqualified

underpayment penalty for the period of

The date of mailing of a notice of

person;

underpayment. Use Form 2220,

deficiency under section 6212 for the section

Furnishing of goods, services, or facilities

Underpayment of Estimated Tax by

4951 tax,

between the fund and a disqualified person;

Corporations, to see if the fund owes a

The date on which the tax imposed by

Payment of compensation (or payment or

penalty and to figure the amount of the

section 4951 is assessed, or

reimbursement of expenses) by the fund to a

penalty. If Form 2220 is attached, check the

The date correction of the act of

disqualified person; and

box on line 15 and enter the amount of the

self-dealing is completed.

Transfers to, or use by or for the benefit

penalty on that line.

Amount involved. The term “amount

of, a disqualified person of the income or

Schedule L. Balance Sheets

involved” means the greater of the amount of

assets of the fund.

money given (or received) and the fair

The balance sheets should agree with the

Exceptions. Acts of self-dealing do not

market value of the other property given (or

fund's books and records.

include:

received). When services described in

Schedule M. Other Information

1. The payment by the fund for the

section 4951(d)(2)(C) are involved, the

purposes of satisfying, in whole or in part, the

amount involved is only the excess

Line 1. The term “electing taxpayer” means

liability of the electing taxpayer for

compensation.

an eligible taxpayer that elects the

decommissioning costs of the nuclear power

application of section 468A to deduct

Note. Fair market value is determined as of

plant.

payments made to a nuclear

the date on which the act of self-dealing

2. The withdrawal of excess

decommissioning fund. See Regulations

occurs and at the highest market value

contributions by the electing taxpayer in

section 1.468A-7 for the rules concerning the

during the taxable period.

accordance with Regulations section

election.

1.468A-5(c)(2).

Correction and correct. The terms

Line 5. If you are a trustee or disqualified

“correction” and “correct” mean the undoing

3. The withdrawal of amounts that have

person (defined below), complete the items

of an act of self-dealing, to the extent

been treated as distributions to the electing

included in line 5 to determine if you have

possible, but in any case returning the fund

taxpayer under Regulations section

engaged in an act of self-dealing.

to a financial position no worse than it would

1.468A-5(c)(3).

have been if the disqualified person acted

Part II. Initial Taxes on

4. The payment of amounts remaining in

under the highest fiduciary relationship.

Self-Dealing (Section 4951)

the fund to the electing taxpayer after the

termination of the fund upon the substantial

Disqualified person. The term “disqualified

Initial taxes on self-dealers

completion of decommissioning.

person” means a person who is:

An initial tax of 10% of the amount involved

5. The furnishing of goods, services, or

1. A contributor to the fund.

(defined later) is imposed on each act of

facilities by a disqualified person to the fund

2. A trustee of the fund.

self-dealing between a disqualified person

if the furnishing is without charge and if the

3. An owner of more than 10% of (a) the

and a nuclear decommissioning fund for

goods, services, or facilities so furnished are

total combined voting power of a

each tax year (or part of a tax year) in the

exclusively used for the purposes specified

corporation, (b) the profits interest of a

taxable period. The tax is required to be paid

in section 468A(e)(4).

partnership, or (c) the beneficial interest of a

by any disqualified person (other than a

6. The payment of compensation (and

trust or unincorporated business that is a

trustee acting only as a trustee of the trust)

the payment or reimbursement of expenses)

contributor to the fund.

who participates in the act of self-dealing.

by the fund to a disqualified person for

4. An officer, director, or employee of a

personal services that are reasonable and

person who is a contributor to the fund.

Initial taxes on trustee

necessary to carry out the purposes of the

5. The spouse, ancestor, or a lineal

fund and the compensation (or payment or

A tax of 2

% of the amount involved is

reimbursement of expenses) is not

descendant, or a spouse of a lineal

imposed on a trustee who participates in the

descendant of an individual described in (1)

excessive.

act of self-dealing. The tax is not imposed if

through (4) above.

7. A payment by the fund for the

the trustee unwillingly or due to reasonable

performance of trust functions and certain

6. A corporation of which persons

cause participated in the act. The tax is

described in (1) through (5) above own more

general banking services by a bank or trust

computed on all acts of self-dealing that

company that is a disqualified person, if the

than 35% of the total combined voting

occur within the taxable period. The tax is

banking services are reasonable and

power.

required to be paid by the trustee who

necessary to carry out the purposes of the

participates in the act.

7. A partnership of which persons

fund and the compensation paid to the bank

described in (1) through (5) above own more

Exceptions. The initial tax on the act of

or trust company is not excessive

than 35% of the profits interests.

self-dealing of a disqualified person or a

(considering the fair market interest rate for

8. A trust or estate of which persons

trustee is not imposed if the acts of

the use of the funds by the bank or trust

described in (1) through (5) above own more

company).

than 35% of the beneficial interest.

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Instructions For Form 1120-Nd - Return For Nuclear Decommissioning Funds And Certain Related Persons - 2016 Page 4

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