Instructions For Form 1120-Ic-Disc - 2012 (Page 11 of 16) in pdf

figure taxable income attributable to

smallest of these amounts (but not less

Line 2g. Other Expenses

military property, use the gross income

than zero) on line 17b.

Enter any other allowable deduction not

attributable to military property for the year

For purposes of lines 17a and 17b,

claimed on line 1 or lines 2a through 2f.

and the deductions properly allocated to

foreign investment in producer's loans is

that income. See Regulations section

the smallest of (1) the net increase in

The IC-DISC may have to report a

1.995-6.

foreign assets by members of the

negative section 481(a) adjustment on

controlled group (defined in section 993(a)

line 2g. See

Section 481(a)

adjustment,

Line 9. Deemed Distributions to C

(3)) to which the IC-DISC belongs; (2) the

earlier, for additional information.

actual foreign investment by the group's

Corporations

domestic members; or (3) the IC-DISC's

Generally, a deduction may not be

Line 9 provides for the computation of the

outstanding producer's loans to members

taken for any amount that is allocable to a

one-seventeenth deemed distribution of

of the controlled group.

class of exempt income. See section

section 995(b)(1)(F)(i). Line 9 only applies

265(b) for exceptions.

Net increase in foreign assets and

to shareholders of the IC-DISC that are C

actual foreign investment are defined in

corporations.

Note. Do not deduct fines or penalties

sections 995(d)(2) and (3).

paid to a government for violating any law.

See Regulations section 1.995-5 for

Line 10. International Boycott

For more information on other

additional information on figuring foreign

Income

deductions that may apply to corporations,

investment attributable to producer's

see Pub. 535.

loans.

An IC-DISC is deemed to distribute any

income that resulted from cooperating with

Schedule J

Lines 20 and 21. The percentages on

an international boycott (section 995(b)(1)

lines 20 and 21 must add up to 100%.

(F)(ii)). See Form 5713 to figure this

Part I—Deemed Distributions

Line 22. Allocate the line 22 amount to

deemed distribution and for reporting

Under Section 995(b)(1)

shareholders that are individuals,

requirements for any IC-DISC with

partnerships, S corporations, trusts, and

operations related to a boycotting country.

Line 2. Recognized Gain on

estates.

Section 995(b)(1)(B) Property

Line 11. Illegal Bribes, etc.

Part II—Section 995(b)(1)(E)

Enter gain recognized during the tax year

Taxable Income

An IC-DISC is deemed to distribute the

on the sale or exchange of property, other

amount of any illegal payments, such as

than property which in the hands of the

Generally, any taxable income of the

bribes or kickbacks, that it pays, directly or

IC-DISC was a qualified export asset,

IC-DISC attributable to qualified export

indirectly, to government officials,

receipts that exceed $10 million will be

previously transferred to the IC-DISC in a

employees, or agents (section 995(b)(1)

transaction in which the transferor realized

deemed distributed.

(F)(iii)).

gain but did not recognize the gain in

whole or in part. See section 995(b)(1)(B).

Line 1. Export Receipts

Show the computation of the gain on a

Line 14. Earnings and Profits

If there were no commission sales, leases,

separate statement. Include no more of

Attach a computation showing the

rentals, or services for the tax year, enter

the IC-DISC's gain than the amount of

earnings and profits for the tax year. See

on line 1, Part II, the total of lines 1c and

gain the transferor did not recognize on

section 312 for rules on figuring earnings

2k, column (e), Schedule B.

the earlier transfer.

and profits for the purpose of the section

995(b)(1) limitation.

If there were commission sales, leases,

Line 3. Recognized Gain on

rentals, or services for the tax year, the

Section 995(b)(1)(C) Property

total qualified export receipts to be

Line 17. Foreign Investment

entered on line 1, Part II, are figured as

Attributable to Producer Loans

Enter gain recognized on the sale or

follows (section 993(f)):

exchange of property described in section

Line 17a. For shareholders other than

995(b)(1)(C). Show the computation of the

C corporations. To figure the amount for

Line 1, Export Receipts

gain on a separate statement. Do not

line 17a, attach a computation showing (1)

include any gain included in the

Worksheet

the IC-DISC's foreign investment in

computation of line 2. Include only the

producer's loans during the tax year; (2)

amount of the IC-DISC's gain that the

1. Add lines 1c and 2k, column (b),

accumulated earnings and profits

transferor did not recognize on the earlier

Schedule B

. . . . . . . . . . .

(including earnings and profits for the

transfer and that would have been treated

2. Add lines 1c and 2k, column (d),

current tax year) minus the amount on

as ordinary income if the property had

Schedule B

. . . . . . . . . . .

line 15, Part I; and (3) accumulated

3. Add lines 1 and 2. Enter on line 1,

been sold or exchanged rather than

IC-DISC income. Enter the smallest of

Part II, Schedule J

transferred to the IC-DISC. Do not include

. . . . . . .

these amounts (but not less than zero) on

gain on the sale or exchange of IC-DISC

line 17a.

stock-in-trade or other property that either

Line 3. Controlled Group

would be included in inventory if on hand

Line 17b. For C corporation sharehold-

Allocation

at the end of the tax year or is held

ers. To figure the amount for line 17b,

primarily for sale in the normal course of

If the IC-DISC is a member of a controlled

attach a computation showing (1) the

business.

group (as defined in section 993(a)(3))

IC-DISC's foreign investment in producer's

that includes more than one IC-DISC, only

loans during the tax year; (2) accumulated

one $10 million limit is allowed to the

Line 4. Income Attributable to

earnings and profits (including earnings

group. If an allocation is required, a

and profits for the current tax year) minus

Military Property

statement showing each member's portion

the amount on line 16, Part I; and (3)

Enter 50% of taxable income attributable

of the $10 million limit must be attached to

accumulated IC-DISC income. Enter the

to military property (section 995(b)(1)(D)).

Show the computation of this income. To

Instructions for Form 1120-IC-DISC (Rev. 9-2017)

-11-

Instructions For Form 1120-Ic-Disc - 2012 Page 11

Related Articles

Related forms

Related Categories