Instructions For Form 1120-Pc - 2016 (Page 8 of 23) in pdf

credit on line 14h for the amount of tax

Line 12. Other Taxes

Line 10. Foreign corporations. A

paid by the attorney-in-fact that is related

foreign corporation carrying on an

Include any of the following taxes and

to the income received by the

insurance business in the United States is

interest in the total on line 12. Check the

attorney-in-fact from the reciprocal in the

taxed as a domestic insurance company

appropriate box(es) for the form, if any,

tax year.

on its income effectively connected with

used to compute the total.

See section 835 and the related

the conduct of a trade or business in the

Recapture of investment credit. If the

regulations for special rules and

United States (see sections 864(c) and

corporation disposed of investment credit

information regarding the statements

897 for definition).

property or changed its use before the end

required to be attached to the return.

Generally, any other U.S.-source

of its useful life or recovery period, it may

income received by the foreign

Line 6. Alternative minimum tax (AMT).

owe a tax. See Form 4255, Recapture of

corporation is taxed at 30% (or at a lower

Investment Credit.

A corporation that is not a small

treaty rate) under section 881. If the

corporation exempt from the AMT

Recapture of low-income housing

corporation has this income, attach a

may be required to file Form 4626

credit. If the corporation disposed of

statement showing the kind and amount of

CAUTION

if it claims certain credits, even though it

property (or there was a reduction in the

income, the tax rate, and the amount of

does not owe any AMT. See the

tax. Enter the tax on line 10. However, see

qualified basis of the property) for which it

instructions for Form 4626, Alternative

Reduction of section 881 tax, later.

took the low-income housing credit, and

Minimum Tax—Corporations, for details.

the corporation did not follow the

Note. Interest received from certain

procedures that would have prevented

Unless the corporation is treated as a

portfolio debt investments that were

recapture of the credit, it may owe a tax.

small corporation exempt from the AMT, it

issued after July 18, 1984, is not subject to

See Form 8611, Recapture of

may owe the AMT if it has any of the

the tax. See section 881(c).

Low-Income Housing Credit.

adjustments and tax preference items

See section 842 for more information.

listed on Form 4626. The corporation must

Other. Additional taxes and interest

file Form 4626 if its taxable income (or

amounts can be included in the total

Minimum effectively connected net

loss) before the NOL deduction, combined

entered on line 12. Check the box for

investment income. See section 842(b)

with these adjustments and tax preference

“Other” if the corporation includes any

and Notice 89-96, 1989-2 C.B. 417, for the

items is more than the smaller of $40,000

additional taxes and interest such as the

general rules for computing this amount.

or the corporation's allowable exemption

items discussed below. See How to report

Also, see Rev. Proc. 2016-46, 2016-37

amount (from Form 4626). For this

below, for details on reporting these

I.R.B. 345, for the domestic asset/liability

purpose, taxable income does not include

amounts on an attached statement.

percentages and domestic investment

the NOL deduction.

Recapture of Indian employment credit.

yields needed to compute this amount.

Generally, if an employer terminates the

See Form 4626 for definitions and

Any additional income required by

employment of a qualified employee less

details on how to figure the tax.

section 842(b) must be included in taxable

than 1 year after the date of initial

income (for example, Schedule A, line 13).

Line 8a. Foreign tax credit. To find out

employment, any Indian employment

when a corporation can take the credit for

credit allowed for a prior tax year because

Reduction of section 881 tax.

payment of income tax to a foreign country

of wages paid or incurred to that employee

Additional taxes resulting from the net

or U.S. possession, see Form 1118,

must be recaptured. See Form 8845 and

investment income adjustment may offset

Foreign Tax Credit—Corporations.

section 45A.

a corporation's section 881 tax on

Recapture of new markets credit (see

U.S.-source income. The tax reduction is

Line 8b. Credit from Form 8834. Enter

Form 8874, New Markets Credit, and

any qualified electric vehicle passive

determined by multiplying the section 881

Form 8874-B, Notice of Recapture Event

tax by the ratio of the amount of income

activity credits from prior years allowed for

for New Markets Credit).

adjustment to income subject to the

the current tax year from Form 8834,

Recapture of employer-provided

section 881 tax, computed without the

Qualified Electric Vehicle Credit, line 7.

childcare facilities and services credit (see

exclusion for interest on state and local

Attach Form 8834. Also include on line 8b

Form 8882).

any credits from Form 5735, American

bonds or income exempted from taxation

Interest on deferred tax attributable to

by treaty. See section 842(c)(2). Attach a

Samoa Economic Development Credit.

certain nondealer installment obligations

statement showing how the reduction

See the Instructions for Form 5735. Attach

(section 453A(c)).

under section 881 was figured. Enter the

Form 5735, if applicable.

Interest due on deferred gain (section

net tax imposed by section 881 on line 10.

Line 8c. General business credit. Enter

1260(b)).

Line 11. Personal holding company

on line 8c the allowable credit from Form

Interest due under section 1291(c)(3).

tax. A corporation (other than a

3800, Part II, line 38.

See Form 8621 and the Instructions for

corporation described in section 542(c)) is

The corporation is required to file Form

Form 8621.

taxed as a personal holding company

Alternative tax on qualifying shipping

3800, General Business Credit, to claim

(PHC) under section 542 if:

activities (see Form 8902).

most business credits. For a list of

At least 60% of its adjusted ordinary

allowable credits, see Form 3800. Also,

How to report. If the corporation

gross income for the tax year is PHC

see the applicable credit form and its

checked the “Other” box, attach a

income, and

instructions.

statement showing the computation of

At any time during the last half of the tax

Line 8d. Credit for prior year minimum

each item included in the total for line 12

year more than 50% in value of its

tax. To figure the minimum tax credit and

and identify the applicable Code section

outstanding stock is directly or indirectly

any carryforward of that credit, complete

and the type of tax or interest.

owned by five or fewer individuals.

and attach Form 8827, Credit for Prior

See Schedule PH (Form 1120), U.S.

Year Minimum Tax—Corporations.

Line 13. Total Tax

Personal Holding Company (PHC) Tax,

for definitions and details on how to figure

Line 8e. Bond credits from Form 8912.

Include any deferred tax on the

the tax.

Enter the allowable credits from Form

termination of a section 1294 election

8912, Credit to Holders of Tax Credit

applicable to shareholders in a qualified

Bonds, line 12.

Instructions for Form 1120-PC (2016)

-8-

Instructions For Form 1120-Pc - 2016 Page 8

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