Instructions For Form 1120-Pc - 2016 (Page 21 of 23) in pdf

and liquidation rights that do not exceed

dividends received as a shareholder in a

provided to enrollees (as defined in 45

the issue price of the stock (except for a

mutual fund or other RIC.

C.F.R. 158.140) and for activities that

reasonable redemption or liquidation

improve health care quality (as defined in

Item 11

premium). See section 1504(a)(4).

45 C.F.R. 158.150) under its policies

If the corporation has an NOL, it generally

during the tax year (section 833(c)(5) MLR

Question 6

can elect under section 172(b)(3) to waive

numerator) divided by the total premium

Check the “Yes” box if one foreign person

the entire carryback period for the NOL

revenue (section 833(c)(5) MLR

owned at least 25% of (a) the total voting

and instead carry the NOL forward to

denominator). See section 833(c)(5),

power of all classes of stock of the

future tax years. To do so, check the box

Regulations section 1.833-1 and Notice

corporation entitled to vote, or (b) the total

on line 11 and file the tax return by its due

2010-79 for more information. Also see

value of all classes of stock of the

date, including extensions. Do not attach

Notice 2012-37 applicable to the first tax

corporation.

the statement described in Temporary

year beginning after December 31, 2012.

Regulations section 301.9100-12T. Once

See Regulations section 1.833-1(c)(2) for

The constructive ownership rules of

made, the election is irrevocable.

transition rules applicable to the first tax

section 318 apply in determining if a

year beginning after December 31, 2013

Corporations filing a consolidated

corporation is foreign owned. See section

and December 31, 2014.

return that elect to waive the entire

6038A(c)(5) and the related regulations.

carryback period for the group must also

Check the “Yes” box if the corporation

Enter on line 6a the percentage owned

attach the statement required by

is a Blue Cross or Blue Shield organization

by the foreign person specified in question

Regulations section 1.1502-21(b)(3) or the

described in section 833(c)(2), or other

6. On line 6b, enter the name of the

election will not be valid.

organization described in section 833(c)

owner's country.

(3), that has satisfied the MLR

Item 12

requirements of section 833(c)(5).

Note. If there is more than one

Enter the amount of the NOL carryover to

If you checked “Yes,” you must enter

25%-or-more foreign owner, complete

the tax year from prior years, even if some

the following.

lines 6a and 6b for the foreign person with

of the loss is used to offset income on this

The section 833(c)(5) MLR numerator

the highest percentage of ownership.

return. The amount to enter is the total of

on line 14(a),

all NOLs generated in prior years but not

Foreign person. The term “foreign

The section 833(c)(5) MLR

used to offset income (either as a

person” means:

denominator on line 14(b), and

carryback or carryover) in a tax year prior

An individual who is not a citizen or

The section 833(c)(5) percentage on

to 2016. Do not reduce the amount by any

resident of the United States;

line 14(c).

NOL deduction reported on Schedule A,

An individual who is a citizen or resident

line 36b.

If you checked “No,” enter zero on

of a U.S. possession who is not otherwise

Schedule H, line 6, and Schedule A,

Question 13

a citizen or resident of the United States;

line 34a. You cannot take the special

Any partnership, association, company,

A corporation that files Form 1120-PC

deduction. See the instructions for

or corporation that is not created or

must file Schedule UTP (Form 1120),

Schedule H.

organized in the United States;

Uncertain Tax Position Statement, with its

Any foreign estate or trust within the

Also, if you checked “No,” your

2016 income tax return if:

meaning of section 7701(a)(31); or

deduction of unearned premiums is

For 2016, the corporation's total assets

A foreign government (or one of its

limited. See the instructions for

equal or exceed $50 million;

agencies or instrumentalities) to the extent

Schedule E for more information.

The corporation or a related party

that it is engaged in the conduct of a

issued audited financial statements

commercial activity as described in

reporting all or a portion of the

Schedule L—Balance

section 892.

corporation's operations for all or a portion

Sheets per Books

However, the term “foreign person”

of the corporation's tax year; and

does not include any foreign person who

The corporation has one or more tax

consents to the filing of a joint income tax

positions that must be reported on

Note. All insurance companies required

return.

Schedule UTP.

to file Form 1120-PC must complete

Schedule L.

Owner's country. For individuals, the

For details, see the Instructions for

The balance sheets should agree with

term “owner's country” means the country

Schedule UTP.

the corporation's books and records.

of residence. For all others, it is the

Attach Schedule UTP to the

country where incorporated, organized,

If filing a consolidated return, report

corporation's income tax return. Do not file

created, or administered.

total consolidated assets, liabilities, and

it separately. A taxpayer that files a

shareholder's equity for all corporations

Requirement to file Form 5472. If the

protective Form 1120-PC must also file

joining in the return. See Consolidated

corporation checked “Yes,” it may have to

Schedule UTP if it satisfies the

Return, earlier.

file Form 5472, Information Return of a

requirements set forth above.

25% Foreign-Owned U.S. Corporation or

Corporations with total assets

Question 14

a Foreign Corporation Engaged in a U.S.

(non-consolidated or consolidated for all

Trade or Business. Generally, a 25%

Section 833(c)(5) provides that section

corporations included within the tax

foreign-owned corporation that had a

833(a)(2) and section 833(a)(3) do not

consolidation group) of $10 million or

reportable transaction with a foreign or

apply to a Blue Cross or Blue Shield

more on the last day of the tax year must

domestic related party during the tax year

organization described in section 833(c)

file Schedule M-3 (Form 1120-PC) instead

must file Form 5472. See the Instructions

(2), or other organization described in

of Schedule M-1. See the separate

for Form 5472 for filing instructions and

section 833(c)(3), unless it has an MLR of

Instructions for Schedule M-3 (Form

penalties for failure to file.

85% or more for the tax year.

1120-PC) for provisions that also affect

Item 10

Schedule L.

For purposes of section 833(c)(5), the

Show any tax-exempt interest received or

MLR is equal to the amount expended on

Line 1. Cash. Include certificates of

accrued. Include any exempt-interest

reimbursement for clinical services

deposit as cash on this line.

Instructions for Form 1120-PC (2016)

-21-

Instructions For Form 1120-Pc - 2016 Page 21

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