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Instruksi untuk Formulir 1120-IC-DISC, Biaya Bunga Kembali Perusahaan Penjualan Internasional Domestik

Rev. Desember 2021

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Department of the Treasury  
Internal Revenue Service  
Instructions for  
Form 1120-IC-DISC  
(Rev. December 2021)  
Interest Charge Domestic International  
Sales Corporation Return  
Section references are to the Internal Revenue  
Code unless otherwise noted.  
the photographs and calling  
1-800-THE-LOST (1-800-843-5678) if you  
recognize a child.  
See section 441(h) and its regulations for  
more information.  
Its election to be treated as an IC-DISC  
Contents  
Page  
is in effect for the tax year.  
General Instructions . . . . . . . . . . . . . 1  
Purpose of Form . . . . . . . . . . . . . . . 1  
Who Must File . . . . . . . . . . . . . . . . 1  
When To File . . . . . . . . . . . . . . . . . 2  
Where To File . . . . . . . . . . . . . . . . . 2  
Who Must Sign . . . . . . . . . . . . . . . . 2  
General Instructions  
See Definitions, later, and section 992  
and related regulations for details.  
Purpose of Form  
Distribution to meet qualification re-  
quirements.  
Form 1120-IC-DISC is an information  
return filed by interest charge domestic  
international sales corporations  
(IC-DISCs), former DISCs, and former  
IC-DISCs.  
An IC-DISC that does not meet the  
Other Forms and Statements That  
gross receipts test or qualified export  
asset test during the tax year will still be  
considered to have met them if, after the  
tax year ends, the IC-DISC makes a pro  
rata property distribution to its  
May Be Required . . . . . . . . . . . 2  
Assembling the Return . . . . . . . . . . . 2  
Accounting Methods . . . . . . . . . . . . 2  
Accounting Periods . . . . . . . . . . . . . 3  
Rounding Off to Whole Dollars . . . . . . 3  
Recordkeeping . . . . . . . . . . . . . . . . 3  
Definitions . . . . . . . . . . . . . . . . . . . 3  
Penalties . . . . . . . . . . . . . . . . . . . . 4  
Specific Instructions . . . . . . . . . . . . . 5  
Schedule A . . . . . . . . . . . . . . . . . . 6  
Schedule B . . . . . . . . . . . . . . . . . . 7  
Schedule C . . . . . . . . . . . . . . . . . . 8  
Schedule E . . . . . . . . . . . . . . . . . 10  
Schedule J . . . . . . . . . . . . . . . . . 11  
What Is an IC-DISC?  
An IC-DISC is a domestic corporation that  
has elected to be an IC-DISC and its  
election is still in effect. The IC-DISC  
election is made by filing Form 4876-A,  
Election To Be Treated as an Interest  
Charge DISC.  
shareholders and specifies at the time that  
this is a distribution to meet the  
qualification requirements.  
If the IC-DISC did not meet the gross  
receipts test, the distribution equals the  
part of its taxable income attributable to  
gross receipts that are not qualified export  
gross receipts.  
Generally, an IC-DISC is not taxed on  
its income. Shareholders of an IC-DISC  
are taxed on its income when the income  
is actually (or deemed) distributed. In  
addition, section 995(f) imposes an  
interest charge on shareholders for their  
share of DISC-related deferred tax liability.  
See Form 8404, Interest Charge on  
DISC-Related Deferred Tax Liability, for  
details.  
If the IC-DISC did not meet the qualified  
export asset test, the distribution equals  
the fair market value (FMV) of the assets  
that are not qualified export assets on the  
last day of the tax year.  
Schedule K (Form  
1120-IC-DISC) . . . . . . . . . . . . 13  
Schedule L . . . . . . . . . . . . . . . . . 13  
Schedule N . . . . . . . . . . . . . . . . . 13  
Schedule O . . . . . . . . . . . . . . . . . 14  
If the IC-DISC did not meet either test,  
the distribution generally equals the sum  
of both amounts.  
Schedule P (Form  
Regulations section 1.992-3 explains  
1120-IC-DISC) . . . . . . . . . . . . 14  
To be an IC-DISC, a corporation must  
be organized under the laws of a state or  
the District of Columbia and meet the  
following tests.  
how to figure the distribution.  
Interest on late distribution. If the  
IC-DISC makes a distribution after Form  
1120-IC-DISC is due, interest must be  
paid to the United States Treasury. The  
interest charge is 41/2% of the distribution  
times the number of tax years that begin  
after the tax year to which the distribution  
relates until the date the IC-DISC made  
the distribution.  
Future Developments  
For the latest information about  
developments related to Form  
1120-IC-DISC and its instructions, such as  
legislation enacted after they were  
published, go to IRS.gov/  
At least 95% of its gross receipts during  
the tax year are qualified export receipts.  
At the end of the tax year, the adjusted  
basis of its qualified export assets is at  
least 95% of the sum of the adjusted basis  
of all of its assets.  
It has only one class of stock, and its  
What’s New  
outstanding stock has a par or stated  
value of at least $2,500 on each day of the  
tax year (or, for a new corporation, on the  
last day to elect IC-DISC status for the  
year and on each later day).  
If the IC-DISC must pay this interest,  
send the payment to the Internal Revenue  
Service Center where you filed Form  
1120-IC-DISC within 30 days of making  
the distribution. On the payment, write the  
IC-DISC's name, address, and employer  
identification number (EIN); the tax year;  
and a statement that the payment  
Schedule C, line 14, formerly related to  
section 965(a), which is no longer  
applicable for tax years after 2020, is now  
reserved for future use.  
It maintains separate books and  
Photographs of Missing  
Children  
records.  
Its tax year must conform to the tax year  
of the principal shareholder who has the  
highest percentage of voting power. If two  
or more shareholders have the highest  
percentage of voting power, the IC-DISC  
must elect a tax year that conforms to that  
of any one of the principal shareholders.  
represents the interest charge under  
Regulations section 1.992-3(c)(4).  
The IRS is a proud partner with the  
Children® (NCMEC). Photographs of  
missing children selected by the Center  
may appear in instructions on pages that  
would otherwise be blank. You can help  
bring these children home by looking at  
Who Must File  
The corporation must file Form  
1120-IC-DISC if it elected, by filing Form  
Dec 30, 2021  
Cat. No. 11476W  
     
4876-A, to be treated as an IC-DISC and  
its election is in effect for the tax year.  
reducing the acquiring corporation's basis  
in the property transferred. Once made,  
the election is irrevocable. For more  
information, see section 362(e)(2) and  
Regulations section 1.362-4. If an election  
is made, a statement must be filed in  
accordance with Regulations section  
1.362-4(d)(3).  
Who Must Sign  
The return must be signed and dated by:  
The president, vice president, treasurer,  
If the corporation is a former DISC or  
former IC-DISC, it must file Form  
1120-IC-DISC in addition to any other  
return required.  
assistant treasurer, chief accounting  
officer; or  
Any other corporate officer (such as tax  
officer) authorized to sign.  
A former DISC is a corporation that  
was a DISC on or before December 31,  
1984, but failed to qualify as a DISC after  
December 31, 1984, or did not elect to be  
an IC-DISC after 1984; and at the  
If a return is filed on behalf of a  
corporation by a receiver, trustee, or  
assignee, the fiduciary must sign the  
return, instead of the corporate officer.  
Returns and forms signed by a receiver or  
trustee in bankruptcy on behalf of a  
corporation must be accompanied by a  
copy of the order or instructions of the  
court authorizing signing of the return or  
form.  
Form 8992. Use Form 8992 to figure the  
domestic corporation's GILTI under  
section 951A and attach it to Form  
1120-IC-DISC.  
beginning of the current tax year, it had  
undistributed income that was previously  
taxed or it had accumulated DISC income.  
Form 8993. Use Form 8993 to figure the  
amount of the eligible deduction for FDII  
and GILTI under section 250 and attach it  
to Form 1120-IC-DISC.  
A former IC-DISC is a corporation that  
was an IC-DISC in an earlier year but did  
not qualify as an IC-DISC for the current  
tax year; and at the beginning of the  
current tax year, it had undistributed  
income that was previously taxed or  
accumulated IC-DISC income. See  
section 992 and related regulations.  
Other forms and statements. See the  
Instructions for Form 1120 and Pub. 542  
for a list of other forms and statements a  
corporation may need to file in addition to  
the forms and statements discussed  
throughout these instructions.  
If an employee of the corporation  
completes Form 1120-IC-DISC, the paid  
preparer's space should remain blank.  
Anyone who prepares Form  
1120-IC-DISC but does not charge the  
corporation should not complete that  
section. Generally, anyone who is paid to  
prepare Form 1120-IC-DISC must sign it  
and fill in the “Paid Preparer Use Only”  
area.  
A former DISC or former IC-DISC need  
not complete lines 1 through 8 on page 1  
and the schedules for figuring taxable  
income, but must complete Schedules J,  
L, and M of Form 1120-IC-DISC and  
Schedule K (Form 1120-IC-DISC). Write  
“Former DISC” or “Former IC-DISC”  
across the top of the return.  
Assembling the Return  
To ensure that the corporation's tax return  
is correctly processed, attach all  
schedules and other forms after the last  
page of Form 1120-IC-DISC, and in the  
following order.  
The paid preparer must complete the  
required preparer information and:  
1. Schedule N (Form 1120).  
2. Form 4136.  
3. Schedule D (Form 1120).  
4. Form 8992.  
Sign the return in the space provided  
for the preparer's signature, and  
When To File  
Give a copy of the return to the  
File Form 1120-IC-DISC by the 15th day  
of the 9th month after the IC-DISC's tax  
year ends. No extensions are allowed. If  
the due date falls on a Saturday, Sunday,  
or a legal holiday, the corporation may file  
on the next business day.  
taxpayer.  
5. Form 8993.  
Note. A paid preparer may sign original or  
amended returns by rubber stamp,  
mechanical device, or computer software  
program.  
6. Additional schedules in  
alphabetical order.  
7. Additional forms in numerical order.  
Complete every applicable entry space  
on Form 1120-IC-DISC. Do not enter “See  
Attached” or “Available Upon Request”  
instead of completing the entry spaces. If  
more space is needed on the forms or  
schedules, attach separate statements  
using the same size and format as the  
printed forms. If there are supporting  
statements and attachments, arrange  
them in the same order as the schedules  
or forms they support and attach them  
last. Show the totals on the printed forms.  
Enter the corporation's name and EIN on  
each supporting statement or attachment.  
Other Forms and  
Statements That May Be  
Required  
Where To File  
If you are using the U.S. Postal Service,  
file Form 1120-IC-DISC at the following  
address:  
Informing Shareholders  
Department of the Treasury  
Internal Revenue Service Center  
Kansas City, MO 64999  
Shareholders who are foreign per-  
sons. The corporation should inform  
shareholders who are nonresident alien  
individuals or foreign corporations, trusts,  
or estates that if they have gains from  
disposal of stock in the IC-DISC, former  
DISC, or former IC-DISC, or distributions  
from accumulated IC-DISC income,  
including deemed distributions, they must  
treat these amounts as effectively  
connected with the conduct of a trade or  
business conducted through a permanent  
establishment in the United States and  
derived from sources within the United  
States.  
Private delivery services (PDSs).  
Corporations may use certain PDSs  
designated by the IRS to meet the “timely  
mailing as timely filing” rule for tax returns.  
Go to IRS.gov/PDS.  
Accounting Methods  
Figure taxable income using the method of  
accounting regularly used in keeping the  
IC-DISC's books and records. In all cases,  
the method used must clearly show  
The PDS can tell you how to get written  
proof of the mailing date.  
For the IRS mailing address to use if  
you’re using a PDS, go to IRS.gov/  
taxable income. Permissible methods  
include cash, accrual, or any other method  
authorized by the Internal Revenue Code.  
Election to reduce basis under section  
362(e)(2)(C). If property is transferred to  
a corporation subject to section 362(e)(2),  
the transferor and the acquiring  
Private delivery services cannot  
Generally, the following rules apply. For  
more information, see Pub. 538,  
deliver items to P.O. boxes. You  
!
CAUTION  
must use the U.S. Postal Service  
corporation may elect, under section  
362(e)(2)(C), to reduce the transferor's  
basis in the stock received instead of  
Accounting Periods and Methods.  
to mail any item to an IRS P.O. box  
address.  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-2-  
           
An IC-DISC must use the accrual  
shareholders have the highest percentage  
property, but only if there is a recognized  
gain.  
5. Dividends (or amounts includible in  
gross income under section 951) with  
respect to stock of a related foreign export  
corporation (defined later).  
method of accounting if its average annual of voting power, the IC-DISC must have a  
gross receipts for the 3 prior tax years  
exceed $26 million. However, see  
providers, later.  
tax year that conforms to the tax year of  
any such shareholder. See section 441(h).  
See Pub. 538 for more information on  
accounting periods and tax years.  
6. Interest on any obligation that is a  
(defined below), an IC-DISC must use the  
accrual method for sales and purchases of  
inventory items. See Cost of Goods Sold,  
later.  
qualified export asset.  
Rounding Off to Whole  
Dollars  
7. Gross receipts for engineering or  
architectural services for construction  
projects outside the United States.  
8. Gross receipts for the performance  
of managerial services in furtherance of  
the production of other qualified export  
receipts of an IC-DISC.  
The IC-DISC may round off cents to whole  
dollars on its return and schedules. If the  
IC-DISC does round to whole dollars, it  
must round all amounts. To round, drop  
amounts under 50 cents and increase  
amounts from 50 to 99 cents to the next  
dollar (for example, $1.39 becomes $1  
and $2.50 becomes $3).  
A member of a controlled group may  
not use an accounting method that would  
distort any group member's income,  
including its own. For example, an  
IC-DISC acts as a commission agent for  
property sales by a related corporation  
that uses the accrual method and pays the  
IC-DISC its commission more than 2  
months after the sale. In this case, the  
IC-DISC should not use the cash method  
of accounting because that method  
materially distorts its income.  
For more information, see Regulations  
section 1.993-1.  
Qualified export assets. Qualified  
If two or more amounts must be added  
to figure the amount to enter on a line,  
include cents when adding the amounts  
and round off only the total.  
export assets are any of the following.  
1. Export property (defined later).  
2. Assets used primarily in connection  
with the sale, lease, rental, storage,  
handling, transportation, packaging,  
assembly, or servicing of export property,  
or the performance of engineering or  
architectural services described in item 7  
of Qualified export receipts, earlier, or  
managerial services in furtherance of the  
production of qualified export receipts  
described in items 1, 2, 3, and 7, earlier.  
3. Accounts receivable and evidences  
of indebtedness produced by transactions  
listed under Qualified export receipts,  
items 1–4, 7, and 8, earlier.  
Small business taxpayer. A small  
business taxpayer is a taxpayer that (a)  
has average annual gross receipts of $26  
million or less for the 3 prior tax years, and  
(b) is not a tax shelter (as defined in  
section 448(d)(3)). See section 471(c).  
Recordkeeping  
Keep the IC-DISC's records for as long as  
they may be needed for the administration  
of any provision of the Internal Revenue  
Code. Usually, records that support an  
item of income, deduction, or credit on the  
return must be kept for 3 years from the  
date the return is due or filed, whichever is  
later. Keep records that verify the  
A small business taxpayer can adopt or  
change its accounting method to account  
for inventories (a) in the same manner as  
materials and supplies that are  
IC-DISC's basis in property for as long as  
they are needed to figure the basis of the  
original or replacement property.  
nonincidental, or (b) to conform to its  
treatment of inventories in an applicable  
financial statement (as defined in section  
451(b)(3)). If it does not have an  
4. Temporary investments, such as  
money and bank deposits, in an amount  
reasonable to meet the IC-DISC's needs  
for working capital.  
The IC-DISC should keep copies of all  
filed returns. They help in preparing future  
and amended returns and in the  
applicable financial statement, it can use  
the method of accounting used in its  
books and records prepared according to  
its accounting procedures. See section  
471(c)(1).  
calculation of earnings and profits.  
5. Obligations related to a producer's  
Definitions  
loan (defined later).  
Change in accounting method. To  
change its method of accounting used to  
report taxable income, for income as a  
whole or for the treatment of any material  
item, the IC-DISC must file Form 3115,  
Application for Change in Accounting  
Method.  
The following definitions are based on  
sections 993 and 994.  
6. Stock or securities of a related  
foreign export corporation (defined later).  
7. Certain obligations that are issued,  
guaranteed or insured by the U.S.  
Export-Import Bank or the Foreign Credit  
Insurance Association and that the  
IC-DISC acquires from such bank or  
association or from the person who sold or  
bought the goods or services from which  
the obligations arose.  
8. Certain obligations held by the  
IC-DISC that were issued by a domestic  
corporation organized to finance export  
property sales under an agreement with  
the Export-Import Bank under which the  
domestic corporation makes export loans  
that the Export-Import Bank guarantees.  
Note. “United States,” as used in the  
following instructions, includes Puerto  
Rico and U.S. possessions, as well as the  
50 states and the District of Columbia.  
See the Instructions for Form 3115 and  
Section 993  
Pub. 538 for more information and  
exceptions. Also see Rev. Proc. 2018-31,  
2018-22 I.R.B. 637 (or any successor).  
Qualified export receipts. Qualified  
export receipts are any of the following.  
1. Gross receipts from selling,  
exchanging, or otherwise disposing of  
export property.  
2. Gross receipts from leasing or  
renting export property that the lessee  
uses outside the United States.  
3. Gross receipts from supporting  
services related to any qualified sale,  
exchange, lease, rental, or other  
disposition of export property by the  
IC-DISC.  
Accounting Periods  
An IC-DISC must figure its taxable income  
on the basis of a tax year. A tax year is the  
annual accounting period an IC-DISC  
uses to keep its records and report its  
income and expenses. Generally,  
IC-DISCs may use a calendar year or a  
fiscal year.  
9. Amounts (other than reasonable  
working capital) on deposit in the United  
States used to acquire qualified export  
assets within the time provided by  
Regulations section 1.993-2(j).  
Note. The tax year of an IC-DISC must be  
the same as the tax year of the principal  
shareholder which, at the beginning of the  
IC-DISC tax year, has the highest  
4. Gross receipts from selling,  
See Regulations section 1.993-2 for  
more information.  
exchanging, or otherwise disposing of  
qualified export assets that are not export  
percentage of voting power. If two or more  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-3-  
                 
qualified export assets listed in items 3  
and 4 of Qualified export assets, earlier;  
and  
10% of the IC-DISC's export promotion  
expenses attributable to the receipts;  
Export property. Export property must  
be:  
2. 50% of the IC-DISC's and the  
seller's combined taxable income from  
qualified export receipts on the property,  
derived from the IC-DISC's sale of the  
property plus 10% of the IC-DISC's export  
promotion expenses attributable to the  
receipts; or  
3. Taxable income based on the sale  
price actually charged, provided that  
under section 482 the price actually  
charged clearly reflects the taxable  
income of the IC-DISC and the related  
person.  
1. Made, grown, or extracted in the  
United States by a person other than an  
IC-DISC;  
2. Neither excluded under section  
993(c)(2) nor declared in short supply  
under section 993(c)(3);  
3. Held mainly for sale, lease, or rent  
in the ordinary course of a trade or  
business, by or to an IC-DISC for direct  
use, consumption, or disposition outside  
the United States;  
4. Property not more than 50% of the  
FMV of which is attributable to articles  
imported into the United States; and  
5. Neither sold nor leased by or to  
another IC-DISC that, immediately before  
or after the transaction, either belongs to  
the same controlled group (defined in  
section 993(a)(3)) as your IC-DISC or is  
related to your IC-DISC in a way that  
would result in losses being denied under  
section 267.  
The adjusted basis of the qualified  
export assets in items 1–4 of Qualified  
export assets, earlier, that the foreign  
corporation held at the end of the tax year  
is at least 95% of the adjusted basis of all  
assets it held at the end of such tax year.  
2. A real property holding  
company is a related foreign export  
corporation if:  
The IC-DISC directly owns more than  
50% of the total voting power of the  
foreign corporation's stock, and  
Its exclusive function is to hold title to  
Schedule P (Form 1120-IC-DISC),  
Intercompany Transfer Price or  
Commission, explains the intercompany  
pricing rules in more detail.  
real property located outside the United  
States for the exclusive use (under lease  
or otherwise) of the IC-DISC and  
applicable foreign law forbids the IC-DISC  
to hold title to the property.  
Section 994(c), Export  
Promotion Expenses  
3. An associated foreign  
corporation is a related foreign export  
corporation if:  
These are expenses incurred to help  
distribute or sell export property for use or  
distribution outside the United States.  
These expenses do not include income  
tax, but do include 50% of the cost of  
shipping the export property on  
The IC-DISC or a controlled group of  
corporations to which the IC-DISC  
See Regulations section 1.993-3 for  
details.  
belongs owns less than 10% of the total  
voting power of the foreign corporation's  
stock (section 1563 defines a controlled  
group in this sense, and sections 1563(d)  
and (e) define ownership), and  
A producer's loan. A producer's loan  
U.S.-owned and U.S.-operated aircraft or  
ships in those cases where U.S. law or  
regulations do not require that the export  
property be shipped on such aircraft or  
ships.  
must meet all the following terms.  
1. Satisfy the requirements of sections  
The IC-DISC's ownership of the foreign  
993(d)(2) and (3).  
corporation's stock or securities  
reasonably furthers transactions that lead  
to qualified export receipts for the  
IC-DISC.  
2. Not raise the unpaid balance due  
the IC-DISC on all of its producer's loans  
above the level of accumulated IC-DISC  
income it had at the start of the month in  
which it made the loan.  
3. Be evidenced by a note, or other  
written evidence of indebtedness, with a  
stated maturity date no more than 5 years  
after the date of the loan.  
Deficits in Earnings and Profits  
A deficit in earnings and profits is  
See Regulations section 1.993-5 for  
more information about related foreign  
export corporations.  
chargeable in the following order.  
1. First, to any earnings and profits  
other than accumulated IC-DISC income  
or previously taxed income.  
Gross receipts. Gross receipts are the  
IC-DISC's total receipts from selling,  
leasing, or renting property that the  
corporation holds for sale, lease, or rent in  
the ordinary course of its trade or business  
and gross income from all other sources.  
For commissions on selling, leasing, or  
renting property, include gross receipts  
from selling, leasing, or renting the  
property on which the commissions arose.  
See Regulations section 1.993-6 for more  
information.  
2. Second, to any accumulated  
IC-DISC income.  
4. Be made to a person engaged in a  
U.S. trade or business of making, growing,  
or extracting export property.  
3. Third, to previously taxed income.  
Do not apply any deficit in earnings and  
profits against accumulated IC-DISC  
income that, as a result of the  
5. Be designated as a producer's loan  
when made.  
corporation's revoking its election to be  
treated as an IC-DISC (or other  
disqualification), is deemed distributed to  
the shareholders. See section 995(b)(2)  
(A).  
For more information, see Schedule Q  
(Form 1120-IC-DISC), Borrower's  
Certificate of Compliance With the Rules  
for Producer's Loans, and Regulations  
section 1.993-4.  
Section 994, Intercompany  
Pricing Rules  
A related foreign export corporation.  
A related foreign export corporation  
includes the following.  
1. A foreign international sales  
corporation is a related foreign export  
corporation if:  
Penalties  
If a related person described in section  
482 sells export property to the IC-DISC,  
use the intercompany pricing rules to  
figure taxable income for the IC-DISC and  
the seller. These rules generally do not  
permit the related person to price at a loss.  
Under intercompany pricing, the  
The IC-DISC may have to pay the  
following penalties unless it can show that  
it had reasonable cause for not providing  
information or not filing a return.  
$100 for each instance of not providing  
The IC-DISC directly owns more than  
required information, up to $25,000 during  
the calendar year.  
50% of the total voting power of the  
foreign corporation's stock;  
IC-DISC's taxable income from the sale  
(regardless of the price actually charged)  
may not exceed the greatest of:  
$1,000 for not filing a return.  
For the tax year that ends with or within  
See section 6686 for other details.  
If you receive a notice about penalty  
the IC-DISC's tax year, at least 95% of the  
foreign corporation's gross receipts  
consists of the qualified export receipts  
described in items 1–4 of Qualified export  
receipts, earlier, and interest on the  
1. 4% of qualified export receipts on  
and interest after you file Form  
the IC-DISC's sale of the property plus  
1120-IC-DISC, send us an explanation  
and we will determine if you meet  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-4-  
       
reasonable-cause criteria. Do not attach  
an explanation when you file Form  
1120-IC-DISC.  
United States or U.S. possessions can  
use the online application. Foreign  
corporations should call 267-941-1099  
(not a toll free number) for more  
Question G(1)  
For rules of stock attribution, see section  
267(c). If the owner of the voting stock of  
the IC-DISC was an alien individual or a  
foreign corporation, partnership, trust, or  
estate, check the “Yes” box in the “Foreign  
owner” column and enter the name of the  
owner's country, in parentheses, in the  
address column. “Owner's country” for  
individuals is their country of residence;  
for other foreign entities, it is the country in  
which organized or otherwise created, or  
in which administered.  
Trust fund recovery penalty. This  
penalty may apply if certain excise,  
income, social security, and Medicare  
taxes that must be collected or withheld  
are not collected or withheld, or these  
taxes are not paid. These taxes are  
generally reported on:  
information on obtaining an EIN. See the  
Instructions for Form SS-4.  
EIN applied for but not received. If the  
corporation has not received its EIN by the  
time the return is due, enter "Applied For"  
and the date the corporation applied in the  
space for the EIN. However, if the  
Form 720, Quarterly Federal Excise  
Tax Return;  
Form 941, Employer's QUARTERLY  
corporation is filing its return electronically,  
an EIN is required at the time the return is  
filed. An exception applies to subsidiaries  
of corporations whose returns are filed  
with the parent's electronically filed  
Federal Tax Return;  
Form 944, Employer's Annual Federal  
Taxable Income  
Tax Return; or  
An IC-DISC must figure its taxable income  
although it does not pay most taxes. An  
IC-DISC is exempt from the corporate  
income tax and accumulated earnings tax.  
Form 945, Annual Return of Withheld  
consolidated Form 1120. These  
Federal Income Tax.  
subsidiaries should enter "Applied For" in  
the space for the EIN on their returns. The  
subsidiaries' returns are identified under  
the parent corporation's EIN.  
The trust fund recovery penalty may be  
imposed on all persons who are  
determined by the IRS to have been  
responsible for collecting, accounting for,  
and paying over these taxes, and who  
acted willfully in not doing so. The penalty  
is equal to the full amount of the unpaid  
trust fund tax. See the Instructions for  
Form 720 or Pub. 15 (Circular E),  
Employer's Tax Guide, for details,  
including the definition of responsible  
persons.  
An IC-DISC may not claim the general  
business credit or the credit for fuel  
produced from a nonconventional source.  
In addition, these credits may not be  
passed through to shareholders of the  
corporation.  
For more information, see the  
Instructions for Form SS-4.  
Item E—Total Assets  
Enter the IC-DISC's total assets (as  
determined by the accounting method  
regularly used in keeping the IC-DISC's  
books and records) at the end of the tax  
year. If there are no assets at the end of  
the tax year, enter -0-.  
Line 6a. Net Operating Loss (NOL)  
Deduction  
The NOL deduction is the amount of the  
NOL carryover and NOL carryback. The  
2-year carryback rule does not apply to  
NOLs arising in tax years ending after  
December 31, 2017. Exceptions apply to  
NOLs of certain farming losses and NOLs  
of insurance companies (other than life  
insurance companies). See section 172(b)  
for details.  
Other penalties. Other penalties may be  
imposed for negligence, substantial  
understatement of tax, reportable  
Item F—Initial Return, Final Return,  
Name Change, Address Change,  
or Amended Return  
transaction understatements, and fraud.  
See sections 6662, 6662A, and 6663.  
If this is the IC-DISC's initial or final  
Specific Instructions  
Entity Information  
Period Covered  
Enter the tax year in the space provided at  
the top of the form. For a calendar year,  
enter the last two digits of the calendar  
year in the first entry space. For a fiscal or  
short tax year return, fill in the tax year  
space at the top of the form.  
return, check the applicable box in item F  
at the top of the form.  
The following special rules apply. The  
corporation may elect under section  
965(n) to reduce the amount of the NOL  
for a tax year and the amount of taxable  
income reduced by NOL carryovers or  
carrybacks to such tax year. See section  
965(n) for more information.  
If the IC-DISC has changed its address  
since it last filed a return, check the box for  
“Address change.”  
Note. If a change in address or  
responsible party occurs after the return is  
filed, use Form 8822-B, Change of  
Address or Responsible Party —  
Business, to notify the IRS. See the  
instructions for Form 8822-B for details.  
Line 7. Taxable Income  
If the IC-DISC uses either the gross  
receipts method or combined taxable  
income method to figure the IC-DISC's  
taxable income attributable to any  
transactions involving products or product  
lines, attach Schedule P (Form  
1120-IC-DISC). Show in detail the  
IC-DISC's taxable income attributable to  
each such transaction or group of  
transactions.  
Address  
If the IC-DISC changed its name since it  
Include the suite, room, or other unit  
number after the street address. If the  
Post Office does not deliver mail to the  
street address and the corporation has a  
P.O. box, show the box number instead.  
last filed a return, check the box for “Name  
change.” Generally, an IC-DISC must also  
have amended its articles of incorporation  
and filed the amendment with the state in  
which it was incorporated.  
To correct an error on a Form  
Item C—Employer Identification  
Number (EIN)  
1120-IC-DISC already filed, file an  
amended Form 1120-IC-DISC and check  
the “Amended return” box. If the amended  
return changes the income or distributions  
of income to shareholders, an amended  
Schedule K (Form 1120-IC-DISC) must be  
filed with the amended Form  
Net operating loss (NOL). If line 7  
(figured without regard to the items listed  
above under minimum taxable income) is  
zero or less, the corporation may have an  
NOL that can be carried back or forward  
as a deduction to other tax years.  
Enter the corporation's EIN. If the  
corporation does not have an EIN, it must  
apply for one. An EIN may be applied for:  
Online – Go to IRS.gov/EIN. The EIN is  
issued immediately once the application  
information is validated.  
1120-IC-DISC and given to each  
shareholder. Write “AMENDED” across  
the top of the corrected Schedule K you  
give to each shareholder.  
Generally, a corporation first carries back  
an NOL attributable to farming losses 2  
tax years. However, the corporation can  
elect to waive the carryback period and  
By faxing or mailing Form SS-4,  
Application for Employer Identification  
Number. Corporations located in the  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-5-  
 
instead carry the farming NOL forward to  
future tax years. See the Instructions for  
Form 1139 for other special rules and  
elections.  
million or less (indexed for inflation) for the  
3 preceding tax years, and (b) is not a tax  
shelter (as defined in section 448(d)(3)).  
See section 471(c).  
A small business taxpayer is not  
required to capitalize costs under section  
263A. See section 263A(i).  
For details, see Regulations section  
1.263A-3(d).  
Note. The NOL is limited to 80% of  
taxable income (determined without  
regard to the net operating loss) for losses  
arising in tax years beginning after  
December 31, 2017.  
Enter amounts paid for merchandise  
during the tax year on line 2. The amount  
the IC-DISC may deduct for the tax year is  
figured on line 8.  
Enter on line 4 the balance of section  
263A costs paid or incurred during the tax  
year not includible on lines 2, 3, and 5.  
All filers not using the cash method of  
accounting should see Section 263A  
completing Schedule A.  
Line 5. Other Costs  
Enter on line 5 any costs paid or incurred  
during the tax year not entered on lines 2  
through 4.  
Line 8. Refundable Credit for  
Federal Tax Paid on Fuels  
Enter the credit from Form 4136.  
If the IC-DISC uses intercompany  
pricing rules (for purchases from a related  
supplier), use the transfer price figured in  
Part II of Schedule P (Form  
Schedule A  
Cost of Goods Sold  
Line 7. Inventory at End of Year  
See Regulations sections 1.263A-1  
through 1.263A-3 for details on figuring  
the amount of additional section 263A  
costs to be included in ending inventory. If  
the IC-DISC accounts for inventoriable  
items in the same manner as  
1120-IC-DISC).  
Generally, inventories are required at the  
beginning and end of each tax year if the  
purchase or sale of merchandise is an  
income-producing factor. See Regulations  
section 1.471-1. If inventories are  
If the IC-DISC acts as another person's  
commission agent on a sale, do not enter  
any amount in Schedule A for the sale.  
See Schedule P (Form 1120-IC-DISC).  
required, you must generally use an  
accrual method of accounting for sales  
and purchases of inventory items.  
nonincidental materials and supplies,  
enter on line 7 the portion of your raw  
materials and merchandise purchased for  
resale that was included in the total on  
line 6 but was not sold during the year.  
Line 1. Inventory at Beginning of  
Year  
Exceptions for certain taxpayers. A  
small business taxpayer (defined below)  
can adopt or change its accounting  
method to account for inventories in the  
same manner as materials and supplies  
that are nonincidental, or conform to its  
treatment of inventories in an applicable  
financial statement (as defined in section  
451(b)(3)) (or the method of accounting  
used in its books and records prepared in  
accordance with its accounting  
If the IC-DISC is changing its method of  
accounting for the current tax year, it must  
refigure last year's closing inventory using  
the new method of accounting and enter  
the result on line 1. If there is a difference  
between last year's closing inventory and  
the refigured amount, attach an  
Lines 9a Through 9f. Inventory  
Valuation Methods  
Inventories may be valued at:  
Cost,  
Cost or market value (whichever is  
explanation and take it into account when  
figuring the IC-DISC's section 481(a)  
adjustment.  
lower), or  
Any other method approved by the IRS  
that conforms to the requirements of the  
applicable regulations cited later.  
procedures, if applicable financial  
statements are not used). See section  
471(c)(1).  
If you account for inventories in the  
same manner as nonincidental materials  
and supplies, inventory costs for raw  
materials purchased for use in producing  
finished goods and merchandise  
Line 4. Additional Section 263A  
Costs  
An entry is required on this line only for  
IC-DISCs that have elected a simplified  
method of accounting.  
However, if the IC-DISC is using the  
cash method of accounting, it is required  
to use cost.  
IC-DISCs that use erroneous valuation  
methods must change to a method  
permitted for federal income tax purposes.  
Use Form 3115 to make this change. See  
the Instructions for Form 3115. Also see  
Pub. 538.  
For IC-DISCs that have elected the  
simplified production method, additional  
section 263A costs are generally those  
costs, other than interest, that were not  
capitalized under the IC-DISC's method of  
accounting immediately prior to the  
effective date of section 263A but are now  
required to be capitalized under section  
263A. For details, see Regulations section  
1.263A-2(b).  
purchased for resale are deductible in the  
year the finished goods or merchandise  
are sold (but not before the year you paid  
for the raw materials or merchandise, if  
you are also using the cash method).  
Under this accounting method, you can  
currently deduct expenditures for direct  
labor and all indirect costs that would  
otherwise be included in inventory costs.  
See the instructions for lines 2 and 7.  
A small business taxpayer claiming  
exemption from the requirement to keep  
inventories is changing its method of  
accounting for purposes of section 481.  
For additional guidance on this method of  
accounting, see Pub. 538. For guidance  
on adopting or changing to this method of  
accounting, see Form 3115 and its  
instructions.  
On line 9a, check the method(s) used  
for valuing inventories. Under lower of cost  
or market, the term “market” (for normal  
goods) means the current bid price  
prevailing on the inventory valuation date  
for the particular merchandise in the  
volume usually purchased by the  
taxpayer. If section 263A applies to the  
taxpayer, the basic elements of cost must  
reflect the current bid price of all direct  
costs and all indirect costs properly  
allocable to goods on hand at the  
inventory date.  
For IC-DISCs that have elected the  
simplified resale method, additional  
section 263A costs are generally those  
costs incurred with respect to the following  
categories.  
Off-site storage or warehousing.  
Purchasing.  
Handling, such as processing,  
assembling, repackaging, and  
transporting.  
Inventory may be valued below cost  
when the merchandise is unsalable at  
normal prices or unusable in the normal  
way because the goods are subnormal  
Small business taxpayer. A small  
business taxpayer is a taxpayer that (a)  
has average annual gross receipts of $26  
General and administrative costs  
(mixed service costs).  
-6-  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
     
due to damage, imperfections, shopwear,  
etc., within the meaning of Regulations  
section 1.471-2(c). The goods may be  
valued at the current bona fide selling  
price, minus direct cost of disposition (but  
not less than scrap value). Bona fide  
selling price means actual offering of  
goods during a period ending not later  
than 30 days after inventory date.  
method, including information on safe  
harbor methods. For information on a  
book safe harbor method of accounting for  
corporations that use the nonaccrual  
experience method of accounting, see  
Rev. Proc. 2011-46, 2011-42 I.R.B. 518,  
as modified by Rev. Proc. 2016-29,  
2016-21 I.R.B. 880. Also see the  
following conditions to meet the  
destination test.  
1. Within the United States to a carrier  
or freight forwarder for ultimate delivery  
outside the United States to a buyer or  
lessee.  
2. Within the United States to a buyer  
or lessee who, within 1 year of the sale or  
lease, delivers it outside the United States  
or delivers it to another person for ultimate  
delivery outside the United States.  
3. Within or outside the United States  
to an IC-DISC that is not a member of the  
same controlled group (as defined in  
section 993(a)(3)) as the seller or lessor.  
4. Outside the United States by  
means of the seller's delivery vehicle  
(ship, plane, etc.).  
5. Outside the United States to a  
buyer or lessee at a storage or assembly  
site if the property was previously shipped  
from the United States by the seller or  
lessor.  
6. Outside the United States to a  
purchaser or lessee if the property was  
previously shipped by the seller or lessor  
from the United States and if the property  
is located outside the United States  
pursuant to a prior lease by the seller or  
lessor, and either (a) the prior lease  
terminated at the expiration of its term (or  
by the action of the prior lessee acting  
alone), (b) the sale occurred or the term of  
the subsequent lease began after the time  
at which the term of the prior lease would  
have expired, or (c) the lessee under the  
subsequent lease is not a related person  
(a member of the same controlled group  
as defined in section 993(a)(3) or a  
relationship that would result in a  
Instructions for Form 3115 for procedures  
to obtain automatic consent to change to  
this method or make certain changes  
within this method.  
If this is the first year the Last-in,  
First-out (LIFO) inventory method was  
either adopted or extended to inventory  
goods not previously valued under the  
LIFO method provided in section 472,  
attach Form 970, Application To Use LIFO  
Inventory Method, or a statement with the  
information required by Form 970. Also  
check the LIFO box on line 9c. On line 9d,  
enter the amount or the percent of total  
closing inventories computed under  
section 472. Estimates are acceptable.  
Corporations that qualify to use the  
nonaccrual experience method should  
attach a statement showing total gross  
receipts, the amount not accrued as a  
result of the application of section 448(d)  
(5), and the net amount accrued. Enter the  
amount on the applicable line of  
Schedule B.  
Commissions: Special Rule  
If the IC-DISC changed or extended its  
inventory method to LIFO and had to write  
up the opening inventory to cost in the  
year of election, report the effect of the  
write-up as other income (Schedule B,  
line 2j or 3f), proportionately over a 3-year  
period that begins with the year of the  
LIFO election.  
Note. “United States,” as used in the  
following instructions, includes Puerto  
Rico and U.S. possessions, as well as the  
50 states and the District of Columbia.  
If the IC-DISC received commissions  
on selling or renting property or furnishing  
services, list in column (b) the gross  
receipts from the sales, rentals, or  
services on which the commissions arose,  
and in column (c), list the commissions  
earned. In column (d), report receipts from  
noncommissioned sales or rentals of  
property or furnishing of services, as well  
as all other receipts.  
Schedule B  
Gross Income  
If an income item falls into two or more  
categories, report each part on the  
applicable line. For example, if interest  
income consists of qualified interest from  
a foreign international sales corporation  
and nonqualifying interest from a domestic  
obligation, enter the qualified interest on  
an attached statement for line 2g and the  
nonqualifying interest on an attached  
statement for line 3f.  
For purposes of completing lines 1a  
and 1b, related purchasers are members  
of the same controlled group (as defined  
in section 993(a)(3)) as the IC-DISC. All  
other purchasers are unrelated.  
disallowance of losses under section 267  
or section 707(b)) immediately before or  
after the lease with respect to the lessor,  
and the prior lease was terminated by the  
action of the lessor (acting alone or  
together with the lessee).  
For gain from selling qualified export  
assets, attach a separate statement in  
addition to the forms required for lines 2h  
and 2i.  
A qualified export sale or lease must  
meet a use test and a destination test in  
order to qualify.  
Line-by-Line Instructions  
The use test applies at the time of the  
sale or lease. If the property is used  
predominantly outside the United States  
and the sale or lease is not for ultimate  
use in the United States, it is a qualified  
export sale or lease. Otherwise, if a  
Nonaccrual experience method for  
service providers. Accrual method  
corporations are not required to accrue  
certain amounts to be received from the  
performance of services that, on the basis  
of their experience, will not be collected, if:  
Line 1a. Enter the IC-DISC's qualified  
export receipts from export property sold  
to foreign, unrelated buyers for delivery  
outside the United States. Do not include  
amounts entered on line 1b.  
Line 1b. Enter the IC-DISC's qualified  
export receipts from export property sold  
for delivery outside the United States to a  
related foreign entity for resale to a  
foreign, unrelated buyer, or an unrelated  
buyer when a related foreign entity acts as  
commission agent.  
reasonable person would believe that the  
property will be used in the United States,  
the sale or lease is not a qualified export  
sale or lease. For example, if property is  
sold to a foreign wholesaler and it is  
known in trade circles that the wholesaler,  
to a substantial extent, supplies the U.S.  
retail market, the sale would not be a  
qualified export sale, and the receipts  
would not be qualified export receipts.  
The services are in the fields of health,  
law, engineering, architecture, accounting,  
actuarial science, performing arts, or  
consulting; or  
The corporation's average annual gross  
receipts for any prior 3-tax-year period  
does not exceed $26 million. For more  
details, see section 448(d)(5).  
Line 2a. Enter the gross amount received  
from leasing or subleasing export property  
to unrelated persons for use outside the  
United States.  
This provision does not apply to any  
amount if interest is required to be paid on  
the amount or if there is any penalty for  
failure to timely pay the amount. See  
Regulations section 1.448-2 for  
Regardless of where title or risk of loss  
shifts from the seller or lessor, the property  
must be delivered under one of the  
Receipts from leasing export property  
may qualify in some years and not in  
information on the nonaccrual experience  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-7-  
   
others, depending on where the lessee  
uses the property. Enter only receipts that  
qualify during the tax year. (Use  
appropriate lines of Form 3115 to make  
the election. See the Instructions for Form  
3115 for more information.  
Include any net positive section 481(a)  
adjustment on Schedule B, line 2j or 3f  
(depending on whether the inventory,  
when sold, will generate qualified export  
receipts). If the net section 481(a)  
adjustment is negative, report it on  
Schedule E, line 2g.  
dividends-received deduction under  
section 243 is limited by section 854(b).  
The corporation should receive a notice  
from the RIC specifying the amount of  
dividends that qualify for the deduction.  
Schedule E to deduct expenses such as  
repairs, interest, taxes, and depreciation.)  
Line 2b. A service connected to a sale or  
lease is related to it if the service is usually  
furnished with that type of sale or lease in  
the trade or business where it took place.  
A service is subsidiary if it is less important  
than the sale or lease.  
Report so-called dividends or earnings  
received from mutual savings banks, etc.,  
as interest. Do not treat them as  
dividends.  
Line 3b. Enter receipts from selling  
products subsidized under a U.S. program  
if they have been designated as excluded  
receipts.  
Line 2, Column (a)  
Enter on line 2:  
Line 2c. Include receipts from  
engineering or architectural services on  
foreign construction projects abroad or  
proposed for location abroad. These  
services include feasibility studies, design  
and engineering, and general supervision  
of construction, but do not include  
services connected with mineral  
exploration.  
Dividends (except those received on  
certain debt-financed stock acquired after  
July 18, 1984) that are received from  
20%-or-more-owned domestic  
Line 3c. Enter receipts from selling or  
leasing property or services for use by any  
part of the U.S. government if law or  
regulations require U.S. products or  
services to be used.  
corporations subject to income tax and  
that are eligible for the 65% deduction  
under section 243(c), and  
Taxable distributions from an IC-DISC  
Line 3d. Enter receipts from any IC-DISC  
that belongs to the same controlled group  
(as defined in section 993(a)(3)).  
Line 2d. Include receipts for export  
management services provided to  
unrelated IC-DISCs.  
or former DISC that are considered  
eligible for the 65% deduction.  
Line 3e. Nonqualified dividends and  
Line 2e. Qualified dividends and  
Line 3, Column (a)  
Enter the following.  
inclusions from Schedule C, line 20a.  
inclusions from Schedule C, line 19a.  
Line 3f. Include in an attached statement  
any nonqualifying gross receipts not  
reported on lines 3a through 3e. Do not  
offset an income item against a similar  
expense item.  
The IC-DISC may have to report a  
section 481(a) adjustment on line 3f. See  
Section 481(a) adjustment, earlier, for  
additional information.  
Dividends received on certain  
Line 2f. Include interest received on any  
debt-financed stock acquired after July 18,  
1984, from domestic and foreign  
loan that qualifies as a producer's loan.  
Line 2g. Enter interest on any qualified  
export asset other than interest on  
corporations subject to income tax and  
that would otherwise be subject to the  
dividends-received deduction under  
section 243(a)(1), 243(c), or 245(a).  
Generally, debt-financed stock is stock  
that the corporation acquired by incurring  
a debt (for example, it borrowed money to  
buy the stock).  
producer's loans. For example, include  
interest on accounts receivable from sales  
in which the IC-DISC acted as a principal  
or agent and interest on certain obligations  
issued, guaranteed, or insured by the  
Export-Import Bank or the Foreign Credit  
Insurance Association.  
Schedule C  
Dividends received from a RIC on  
Dividends, Inclusions, and  
debt-financed stock. The amount of  
dividends eligible for the  
Line 2h. On Schedule D (Form 1120),  
Capital Gains and Losses, report in detail  
every sale or exchange of a capital asset,  
even if there is no gain or loss.  
In addition to Schedule D (Form 1120),  
attach a separate statement figuring gain  
from the sale of qualified export assets.  
Special Deductions  
dividends-received deduction is limited by  
section 854(b). The corporation should  
receive a notice from the RIC specifying  
the amount of dividends that qualify for the  
deduction.  
For purposes of the 20% ownership test  
on lines 1 through 7, the percentage of  
stock owned by the corporation is based  
on voting power and value of the stock.  
Preferred stock described in section  
1504(a)(4) is not taken into account.  
Line 2i. Enter the net gain or loss from  
line 18, Part II, Form 4797, Sales of  
Business Property.  
In addition to Form 4797, attach a  
separate statement figuring gain from the  
sale of qualified export assets.  
Line 3, Columns (b) and (c)  
Dividends received on certain  
Line 1, Column (a)  
Enter dividends (except those received on  
certain debt-financed stock acquired after  
July 18, 1984—see section 246A) that:  
debt-financed stock acquired after July 18,  
1984, are not entitled to the full 50% or  
65% dividends-received deduction. The  
50% or 65% deduction is reduced by a  
percentage that is related to the amount of  
debt incurred to acquire the stock. See  
section 246A. Also see section 245(a)  
before making this computation for an  
additional limitation that applies to  
Are received from  
Line 2j. Enter any other qualified export  
receipts for the tax year not reported on  
lines 2a through 2i.  
less-than-20%-owned domestic  
corporations subject to income tax, and  
Qualify for the 50% deduction under  
section 243(a)(1).  
Section 481(a) adjustment. The  
IC-DISC may have to make an adjustment  
under section 481(a) to prevent amounts  
of income or expense from being  
Also include the following on line 1.  
dividends received from foreign  
Taxable distributions from an IC-DISC  
corporations. Attach a statement to Form  
1120-IC-DISC showing how the amount  
on line 3, column (c), was figured.  
or former DISC that are designated as  
being eligible for the 50% deduction and  
certain dividends of Federal Home Loan  
Banks. See section 246(a)(2).  
duplicated or omitted. This section 481(a)  
adjustment period is generally 1 year for a  
net negative adjustment and 4 years for a  
net positive adjustment. However, an  
IC-DISC may elect to use a 1-year  
Line 4, Column (a)  
Enter dividends received on the preferred  
stock of a less-than-20%-owned public  
utility that is subject to income tax and is  
Dividends received (except those  
received on certain debt-financed stock  
acquired after July 18, 1984) from a  
regulated investment company (RIC). The  
amount of dividends eligible for the  
adjustment period if the net section 481(a)  
adjustment for the change is less than  
$25,000. The IC-DISC must complete the  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
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3. Add lines 2, 5, 7, and 8, column  
(c), and the part of the deduction  
on line 3, column (c), that is  
allowed the deduction provided in section  
247 for dividends paid.  
Lines 12a, 12b, and 12c, Column  
(a)  
attributable to dividends received  
from 20%-or-more-owned  
Enter Subpart F inclusions derived from  
Line 5, Column (a)  
the sale by a CFC.  
corporations  
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Enter dividends received on preferred  
stock of a 20%-or-more-owned public  
utility that is subject to income tax and is  
allowed the deduction under section 247  
for dividends paid.  
Line 12a: Enter the foreign-source  
4. Enter the smaller of line 2 or  
portion of any Subpart F inclusions  
attributable to the sale or exchange by a  
CFC of stock in another foreign  
corporation described in section 964(e)  
(4). This should equal the U.S.  
line 3. If line 3 is larger than  
line 2, do not complete the rest of  
this worksheet. Instead, enter the  
amount from line 4 in the margin  
next to line 9 of Schedule C and  
on line 6b, page 1, Form  
shareholder's pro rata share of the amount  
reported on Form 5471, Information  
Return of U.S. Persons With Respect to  
Certain Foreign Corporations, Schedule I,  
line 1a.  
Line 6, Column (a)  
1120-IC-DISC  
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Enter the U.S.-source portion of dividends  
5. Enter the total amount of  
dividends received from  
20%-or-more-owned  
that:  
Are received from  
corporations that are included on  
lines 2, 3, 5, 7, and 8 of column  
less-than-20%-owned foreign  
corporations, and  
Line 12b: Enter the pro rata share of  
Subpart F inclusions attributable to hybrid  
dividends of tiered corporations under  
section 245A(e)(2). This should equal the  
U.S. shareholder's pro rata share of the  
amount reported on Form(s) 5471,  
Schedule I, line 1b.  
(a)  
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Qualify for the 50% deduction under  
6. Subtract line 5 from line 1  
7. Multiply line 6 by 50%  
section 245(a). To qualify for the 50%  
deduction, the corporation must own at  
least 10% of the stock of the foreign  
corporation by vote and value.  
(0.50)  
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8. Subtract line 3 above from  
column (c) of line 9  
9. Enter the smaller of line 7 or  
line 8  
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Line 12c: Enter all other amounts  
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Line 7, Column (a)  
included in income under section 951,  
which should equal the U.S. shareholder's  
pro rata share of the sum of the amounts  
on lines 1(c), 1(d), 1(e), 1(f), 2, 3, and 4 of  
Schedule I of Form(s) 5471.  
10. Dividends-received deduction  
after limitation. Add lines 4 and  
9. (If this is less than line 9 of  
Schedule C, enter the smaller  
amount on line 6b, page 1, Form  
1120-IC-DISC, and in the margin  
next to line 9 of  
Enter the U.S.-source portion of dividends  
that are received from  
20%-or-more-owned foreign corporations  
and that qualify for the 65% deduction  
under section 245(a).  
Line 13, Column (a)  
Schedule C.)  
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Line 8, Column (a)  
Enter amounts included in income under  
the section 951A GlLTI provision from  
Form 8992, Part II, line 5. If you also have  
a Form 5471 reporting requirement,  
please attach Form 5471.  
Enter dividends received from wholly  
owned foreign subsidiaries that are  
eligible for the 100% deduction under  
section 245(b).  
Line 10, Column (a)  
Enter the foreign-source portion of  
dividends that:  
Are received from specified  
Line 14, Column (a)  
Reserved for future use.  
In general, the deduction under section  
245(b) applies to dividends paid out of the  
earnings and profits of a foreign  
10%-owned foreign corporations (as  
defined in section 245A(b)), including gain  
from the sale of stock of a foreign  
corporation for a tax year during which:  
corporation that is treated as a dividend  
for purposes of applying section 245A  
under section 1248(a) and (j); and  
Line 14, Column (c)  
Reserved for future use.  
All of its outstanding stock is owned  
(directly or indirectly) by the domestic  
corporation receiving the dividends, and  
Qualify for the 100% deduction under  
All of its gross income from all sources  
section 245A excluding any hybrid  
dividends.  
Line 15, Column (a)  
Include the following.  
is effectively connected with the conduct  
of a trade or business within the United  
States.  
Dividends (other than capital gain  
Line 11, Column (a)  
distributions reported on Schedule D  
(Form 1120) and exempt-interest  
dividends) that are received from RICs  
and that are not subject to the 50%  
deduction.  
Enter foreign dividends not reportable on  
Line 9, Column (c)  
line 3, 6, 7, 8, or 10 of column (a).  
Generally, line 9, column (c), may not  
exceed the amount from the following  
worksheet. However, in a year in which an  
NOL occurs, this limitation does not apply  
even if the loss is created by the  
Include on line 11 any hybrid dividends  
from a controlled foreign corporation  
(CFC). Hybrid dividends are generally  
dividends received from a CFC that would  
otherwise be reported on line 10 except  
the CFC receives a deduction (or other tax  
benefit) with respect to any income, war  
profits, or excess profits taxes imposed by  
any foreign country or possession of the  
United States.  
Dividends from tax-exempt  
organizations.  
Dividends (other than capital gain  
distributions) received from a real estate  
investment trust that, for the tax year of the  
trust in which the dividends are paid,  
qualifies under sections 856 through 860.  
dividends-received deduction. See  
sections 172(d) and 246(b).  
Line 9, Column (c) Worksheet  
Dividends not eligible for a  
dividends-received deduction, which  
Also include on line 11 the corporation's  
1. Refigure line 5, page 1, Form  
1120-IC-DISC, without any  
adjustment under section 1059  
and without any capital loss  
carryback to the tax year under  
include the following.  
share of distributions from a section 1291  
fund from Form 8621, to the extent that  
the amounts are taxed as dividends under  
section 301. See Form 8621 and the  
Instructions for Form 8621.  
1. Dividends received on any share of  
stock held for less than 46 days during the  
91-day period beginning 45 days before  
the ex-dividend date. When counting the  
number of days the corporation held the  
section 1212(a)(1)  
2. Multiply line 1 by 65%  
(0.65)  
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Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
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stock, you may not count certain days  
during which the corporation's risk of loss  
was diminished. See section 246(c)(4)  
and Regulations section 1.246-5 for more  
details.  
2. Dividends attributable to periods  
totaling more than 366 days that the  
IC-DISC received on any share of  
Tangible personal property produced  
by a corporation includes a film, sound  
recording, videotape, book, or similar  
property.  
IC-DISCs subject to the section 263A  
uniform capitalization rules are required to  
capitalize:  
Golden parachute payments. A portion  
of the payments made by a corporation to  
key personnel that exceeds their usual  
compensation may not be deductible. This  
occurs when the corporation has an  
agreement (golden parachute) with these  
key employees to pay them these excess  
amounts if control of the corporation  
changes. See section 280G and  
1. Direct costs of assets produced or  
preferred stock held for less than 91 days  
during the 181-day period that began 90  
days before the ex-dividend date. When  
counting the number of days the IC-DISC  
held the stock, you may not count certain  
days during which the IC-DISC's risk of  
loss was diminished. See section 246(c)  
(4) and Regulations section 1.246-5 for  
more details. Preferred dividends  
acquired for resale, and  
Regulations section 1.280G-1. Also see  
2. Certain indirect costs (including  
taxes) that are properly allocable to  
property produced or property acquired for  
resale.  
Election to deduct business start-up  
and organizational costs.  
A
corporation can elect to deduct a limited  
amount of start-up and organizational  
costs it paid or incurred. Any remaining  
costs must generally be amortized over a  
180-month period. See sections 195 and  
248 and the related regulations.  
For inventory, some of the indirect  
expenses that must be capitalized are:  
Administration expenses;  
Taxes;  
attributable to periods totaling less than  
367 days are subject to the 46-day holding  
period rule in item 1.  
Depreciation;  
Insurance;  
Time for making an election. The  
corporation generally elects to deduct  
start-up or organizational costs by  
claiming the deduction on its income tax  
return filed by the due date (including  
extensions) for the tax year in which the  
active trade or business begins. However,  
for start-up or organizational costs paid or  
incurred before September 9, 2008, the  
corporation is required to attach a  
statement to its return to elect to deduct  
such costs.  
For more details, including special  
rules for costs paid or incurred before  
September 9, 2008, see the Instructions  
for Form 4562. Also see Pub. 535,  
Business Expenses.  
Compensation paid to officers  
3. Dividends on any share of stock to  
attributable to services;  
the extent the IC-DISC is under an  
Rework labor; and  
obligation (including a short sale) to make  
related payments with respect to positions  
in substantially similar or related property.  
Contributions to pension, stock bonus,  
and certain profit-sharing, annuity, or  
deferred compensation plans.  
Any other taxable dividend income not  
properly reported elsewhere on  
Schedule C.  
Regulations section 1.263A-1(e)(3)  
specifies other indirect costs that relate to  
production or resale activities that must be  
capitalized and those that may be  
currently deductible.  
Interest expense paid or incurred  
during the production period of designated  
property must be capitalized and is  
governed by special rules. For more  
details, see Regulations sections  
1.263A-8 through 1.263A-15.  
The costs required to be capitalized  
under section 263A are not deductible  
until the property (to which the costs  
relate) is sold, used, or otherwise  
disposed of by the corporation. The  
corporation recovers these costs through  
depreciation, amortization, or cost of  
goods sold.  
Line 17, Column (c)  
Enter the section 250 deduction claimed  
for FDII and GILTI. This should equal the  
sum of lines 8 and 9 of Form 8993, Part IV.  
Line 19, Column (a)  
Qualified dividends are dividends that  
qualify as qualified export receipts. They  
include all dividends (or amounts)  
If the corporation timely filed its return  
for the year without making an election, it  
can still make an election by filing an  
amended return within 6 months of the  
due date of the return (excluding  
includible in gross income (under section  
951) that are attributable to stock of  
related foreign export corporations. See  
993, earlier, for more details.  
extensions). Clearly indicate the election  
on the amended return and write "Filed  
pursuant to section 301.9100-2" at the top  
of the amended return. File the amended  
return at the same address the corporation  
filed its original return. The election  
applies when figuring taxable income for  
the current tax year and all subsequent  
years.  
The corporation can choose to forgo  
the elections above by affirmatively  
electing to capitalize its start-up or  
organizational costs on its income tax  
return filed by the due date (including  
extensions) for the tax year in which the  
active trade or business begins.  
Schedule E  
Deductions  
Limitations on Deductions  
Note. A small business taxpayer (defined  
earlier) is not required to capitalize costs  
under section 263A. A small business  
taxpayer that wants to discontinue  
capitalizing costs under section 263A  
must change its method of accounting.  
See section 263A(i). Also see Change in  
accounting method, earlier.  
For more details on the uniform  
capitalization rules, see Regulations  
sections 1.263A-1 through 1.263A-3 and  
Pub. 538.  
Section 263A uniform capitalization  
rules. The uniform capitalization rules of  
section 263A require corporations to  
capitalize, or include in inventory, certain  
costs incurred in connection with the  
following.  
The production of real property and  
tangible personal property held in  
inventory or held for sale in the ordinary  
course of business.  
Transactions between related taxpay-  
ers. Generally, an accrual basis taxpayer  
may only deduct business expenses and  
interest owed to a related party in the year  
the payment is included in the income of  
the related party. See sections 163(e)(3)  
and 267(a)(2) for limitations on deductions  
for unpaid interest and expenses.  
Note. The election to either amortize or  
capitalize start-up costs is irrevocable and  
applies to all start-up costs that are related  
to the trade or business.  
Real property or personal property  
(tangible and intangible) acquired for  
resale.  
Report the deductible amount of  
The production of real property and  
start-up and organizational costs and any  
amortization on line 2g of Schedule E. For  
amortization that begins during the current  
tangible personal property by a  
corporation for use in its trade or business  
or in an activity engaged in for profit.  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
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tax year, complete and attach Form 4562,  
Depreciation and Amortization.  
deferred arrangement, or amounts  
contributed under a salary reduction SEP  
agreement or a SIMPLE IRA plan.  
Regulations sections 1.263A-8 through  
1.263A-15 for definitions and more  
information.  
Limitations on deductions related to  
property leased to tax-exempt entities.  
If an IC-DISC leases property to a  
See the Instructions for Form 1125-E  
for more information on officers'  
Special rules apply to the following.  
Forgone interest on certain  
governmental or other tax-exempt entity, it  
may not claim deductions related to the  
property to the extent that they exceed the  
IC-DISC's income from the lease  
compensation, including any special rules  
and limitations that may apply.  
below-market-rate loans (see section  
7872).  
Original issue discount on certain  
The IC-DISC determines who is an  
officer under the laws of the state where it  
is incorporated.  
high-yield discount obligations. See  
section 163(e) to figure the disqualified  
portion.  
payments (tax-exempt-use loss). Amounts  
disallowed may be carried over to the next  
tax year and treated as a deduction with  
respect to the property for that tax year.  
See section 470 for exceptions.  
Interest which is allocable to  
unborrowed policy cash values of life  
insurance, endowment, or annuity  
Line 1m. Other Export Promotion  
Expenses  
Enter any other allowable export  
promotion expenses not claimed  
elsewhere on the return.  
Contributions. See the Instructions for  
Form 1120 and Pub. 542 for limitations  
that apply to contributions.  
contracts issued after June 8, 1997. See  
section 264(f). Attach a statement  
showing the computation of the deduction.  
Line 1. Export Promotion  
Expenses  
Line 2d. Charitable Contributions  
Note. Do not deduct fines or penalties  
imposed on the IC-DISC.  
For more information on charitable  
contributions, including substantiation and  
recordkeeping requirements, see section  
170 and the related regulations and Pub.  
526, Charitable Contributions. For  
Enter export promotion expenses on lines  
1a through 1m. Export promotion  
expenses are an IC-DISC's ordinary and  
necessary expenses paid or incurred to  
obtain qualified export receipts. Do not  
include income taxes. Enter on lines 2a  
through 2g any part of an expense not  
incurred to obtain qualified export  
receipts.  
Line 2b. Taxes and Licenses  
Enter taxes paid or accrued during the tax  
year, but do not include the following.  
limitations on deduction and other special  
rules that apply to corporations, see the  
Instructions for Form 1120 and Pub. 542.  
Taxes not imposed on the corporation.  
Taxes, including state or local sales  
taxes, that are paid or incurred in  
connection with an acquisition or  
disposition of property (these taxes must  
be treated as part of the cost of the  
acquired property or, in the case of a  
disposition, as a reduction in the amount  
realized on the disposition).  
Line 2e. Freight  
Enter freight expense not deducted on  
Line 1d. Salaries and Wages  
line 1h as export promotion expense.  
Enter the total salaries and wages paid for  
the tax year. Do not include salaries and  
wages deductible elsewhere on the return,  
such as amounts included in officers'  
compensation, cost of goods sold,  
Line 2g. Other Expenses  
Enter any other allowable deduction not  
Taxes assessed against local benefits  
claimed on line 1 or lines 2a through 2f.  
that increase the value of the property  
assessed (such as for paving, etc.).  
elective contributions to a section 401(k)  
cash or deferred arrangement, or amounts  
contributed under a salary reduction SEP  
agreement or a SIMPLE IRA plan.  
Taxes deducted elsewhere on the  
The IC-DISC may have to report a  
negative section 481(a) adjustment on  
line 2g. See Section 481(a) adjustment,  
earlier, for additional information.  
return, such as those reflected in cost of  
goods sold.  
If the corporation provided taxable  
See section 164(d) for apportionment  
of taxes on real property between seller  
and purchaser.  
fringe benefits to its employees,  
!
Generally, a deduction may not be  
taken for any amount that is allocable to a  
class of exempt income. See section  
265(b) for exceptions.  
CAUTION  
such as personal use of a car, do  
not deduct as wages the amount allocated  
for depreciation and other expenses  
claimed on lines 1c and 1m.  
Line 2c. Interest  
Do not deduct the following interest.  
Note. Do not deduct fines or penalties  
Interest on indebtedness incurred or  
paid to a government for violating any law.  
Line 1h. Freight  
continued to purchase or carry obligations  
if the interest is wholly exempt from  
income tax. For exceptions, see section  
265(b).  
For more information on other  
deductions that may apply to corporations,  
see Pub. 535.  
Enter 50% of the freight expenses (except  
insurance) for shipping export property  
aboard U.S. flagships and U.S.-owned  
and U.S.-operated aircraft in those cases  
where you are not required to use U.S.  
ships or aircraft by law or regulations.  
For cash basis taxpayers, prepaid  
Schedule J  
interest allocable to years following the  
current tax year (for example, a cash basis  
calendar year taxpayer who in the current  
tax year prepaid interest allocable to any  
period after the current tax year may  
deduct only the amount allocable to the  
current tax year).  
Part I—Deemed Distributions  
Under Section 995(b)(1)  
Line 1i. Compensation of Officers  
Line 2. Recognized Gain on  
Section 995(b)(1)(B) Property  
Enter deductible officers' compensation  
on line 1i. Attach a statement showing the  
name, social security number, and amount  
of compensation paid to all officers. Do  
not include compensation deductible  
elsewhere on the return, such as amounts  
included in cost of goods sold, elective  
contributions to a section 401(k) cash or  
Interest on debt allocable to the  
Enter gain recognized during the tax year  
on the sale or exchange of property, other  
than property which in the hands of the  
IC-DISC was a qualified export asset,  
previously transferred to the IC-DISC in a  
transaction in which the transferor realized  
gain but did not recognize the gain in  
production of designated property by a  
corporation for its own use. The  
corporation must capitalize this interest.  
Also capitalize any interest on debt  
allocable to an asset used to produce the  
property. See section 263A(f) and  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
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whole or in part. See section 995(b)(1)(B).  
Show the computation of the gain on a  
separate statement. Include no more of  
the IC-DISC's gain than the amount of  
gain the transferor did not recognize on  
the earlier transfer.  
Line 14. Earnings and Profits  
Line 1. Export Receipts  
Attach a computation showing the  
earnings and profits for the tax year. See  
section 312 for rules on figuring earnings  
and profits for the purpose of the section  
995(b)(1) limitation.  
If there were no commission sales, leases,  
rentals, or services for the tax year, enter  
on Part II, line 1, the total of lines 1c and  
2k, column (e), of Schedule B.  
If there were commission sales, leases,  
rentals, or services for the tax year, the  
total qualified export receipts to be  
entered on Part II, line 1, are figured as  
follows (section 993(f)):  
Line 3. Recognized Gain on  
Section 995(b)(1)(C) Property  
Enter gain recognized on the sale or  
exchange of property described in section  
995(b)(1)(C). Show the computation of the  
gain on a separate statement. Do not  
include any gain included in the  
Line 17. Foreign Investment  
Attributable to Producer Loans  
Line 17a. For shareholders other than  
C corporations. To figure the amount for  
line 17a, attach a computation showing (1)  
the IC-DISC's foreign investment in  
producer's loans during the tax year; (2)  
accumulated earnings and profits  
(including earnings and profits for the  
current tax year) minus the amount on Part  
I, line 15; and (3) accumulated IC-DISC  
income. Enter the smallest of these  
amounts (but not less than zero) on  
line 17a.  
Line 1, Export Receipts  
Worksheet  
computation of line 2. Include only the  
amount of the IC-DISC's gain that the  
transferor did not recognize on the earlier  
transfer and that would have been treated  
as ordinary income if the property had  
been sold or exchanged rather than  
transferred to the IC-DISC. Do not include  
gain on the sale or exchange of IC-DISC  
stock-in-trade or other property that either  
would be included in inventory if on hand  
at the end of the tax year or is held  
primarily for sale in the normal course of  
business.  
1. Add lines 1c and 2k, column (b),  
Schedule B  
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2. Add lines 1c and 2k, column (d),  
Schedule B  
3. Add lines 1 and 2. Enter on  
Schedule J, Part II, line 1  
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Line 17b. For C corporation sharehold-  
ers. To figure the amount for line 17b,  
attach a computation showing (1) the  
IC-DISC's foreign investment in producer's  
loans during the tax year; (2) accumulated  
earnings and profits (including earnings  
and profits for the current tax year) minus  
the amount on Part I, line 16; and (3)  
accumulated IC-DISC income. Enter the  
smallest of these amounts (but not less  
than zero) on line 17b.  
Line 3. Controlled Group  
Allocation  
If the IC-DISC is a member of a controlled  
group (as defined in section 993(a)(3))  
that includes more than one IC-DISC, only  
one $10 million limit is allowed to the  
group. If an allocation is required, a  
Line 4. Income Attributable to  
Military Property  
statement showing each member's portion  
of the $10 million limit must be attached to  
Form 1120-IC-DISC. See Proposed  
Enter 50% of taxable income attributable  
to military property (section 995(b)(1)(D)).  
Show the computation of this income. To  
figure taxable income attributable to  
military property, use the gross income  
attributable to military property for the year  
and the deductions properly allocated to  
that income. See Regulations section  
1.995-6.  
Regulations section 1.995-8(f) for details.  
For purposes of lines 17a and 17b,  
foreign investment in producer's loans is  
the smallest of (1) the net increase in  
foreign assets by members of the  
Lines 4 and 5. Proration of $10  
Million Limit  
controlled group (defined in section 993(a)  
(3)) to which the IC-DISC belongs, (2) the  
actual foreign investment by the group's  
domestic members, or (3) the IC-DISC's  
outstanding producer's loans to members  
of the controlled group.  
The $10 million limit (or the controlled  
group member's share) is prorated on a  
daily basis. Thus, for example, if, for its  
2019 calendar tax year, an IC-DISC has a  
short tax year of 73 days, and it is not a  
member of a controlled group, the limit  
that would be entered on Part II, line 5, is  
$2 million (73/365 times $10 million).  
Line 9. Deemed Distributions to C  
Corporations  
Line 9 provides for the computation of the  
one-seventeenth deemed distribution of  
section 995(b)(1)(F)(i). Line 9 only applies  
to shareholders of the IC-DISC that are C  
corporations.  
Net increase in foreign assets and  
actual foreign investment are defined in  
sections 995(d)(2) and (3).  
See Regulations section 1.995-5 for  
additional information on figuring foreign  
investment attributable to producer's  
loans.  
Line 7. Taxable Income  
Enter the taxable income attributable to  
line 6, qualified export receipts. The  
IC-DISC may select the qualified export  
receipts to which the line 5 limitation is  
allocated.  
Line 10. International Boycott  
Income  
Lines 20 and 21. The percentages on  
lines 20 and 21 must add up to 100%.  
An IC-DISC is deemed to distribute any  
income that resulted from cooperating with  
an international boycott (section 995(b)(1)  
(F)(ii)). See Form 5713 to figure this  
deemed distribution and for reporting  
requirements for any IC-DISC with  
Line 22. Allocate the line 22 amount to  
shareholders that are individuals,  
partnerships, S corporations, trusts, and  
estates.  
See Proposed Regulations section  
1.995-8 for details on determining the  
IC-DISC's taxable income attributable to  
qualified export receipts in excess of the  
$10 million amount. Special rules are  
provided for allocating the taxable income  
attributable to any related and subsidiary  
services, and for the ratable allocation of  
the taxable income attributable to the first  
transaction selected by the IC-DISC that  
exceeds the $10 million amount.  
Part II—Section 995(b)(1)(E)  
Taxable Income  
operations related to a boycotting country.  
Line 11. Illegal Bribes, etc.  
Generally, any taxable income of the  
IC-DISC attributable to qualified export  
receipts that exceed $10 million will be  
deemed distributed.  
An IC-DISC is deemed to distribute the  
amount of any illegal payments, such as  
bribes or kickbacks, that it pays, directly or  
indirectly, to government officials,  
employees, or agents (section 995(b)(1)  
(F)(iii)).  
Deductions must be allocated and  
apportioned according to the rules of  
Regulations section 1.861-8. The  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-12-  
selection of the excess receipts by the  
IC-DISC is intended to permit the IC-DISC  
to allocate the $10 million limitation to the  
qualified export receipts of those  
Line 4a. Previously Taxed Income  
Schedule L  
Report on line 4a all actual distributions of  
previously taxed income. Also, include any  
distributions of pre-1985 accumulated  
DISC income that are nontaxable (see the  
Enter on the dotted line to the left of the  
line 4a amount the dollar amount of the  
distribution that is nontaxable pre-1985  
DISC income and identify it as such. Do  
not include distributions of pre-1985 DISC  
income that are made under section  
995(b)(2) because of prior year  
Balance Sheets per Books  
The balance sheet should agree with the  
IC-DISC's books and records. Include  
certificates of deposits as cash on line 1.  
transactions occurring during the tax year  
that permit the greatest amount of taxable  
income to be allocated to the IC-DISC  
under the intercompany pricing rules of  
section 994.  
Line 12. Accumulated Pre-1985  
DISC Income  
To avoid double counting of the  
If the corporation was a qualified DISC as  
of December 31, 1984, the accumulated  
pre-1985 DISC income will generally be  
treated as previously taxed income  
(exempt from tax) when distributed to  
DISC shareholders after December 31,  
1984.  
deemed distribution, if an amount of  
taxable income for the tax year attributable  
to excess qualified export receipts is also  
deemed distributed under either line 1, 2,  
3, or 4 of Part I, such amount of taxable  
income is only includible on that line of  
Part I, and must be subtracted from the  
amount otherwise reportable on Part II,  
line 7, and carried to Part I, line 5. See  
Proposed Regulations section 1.995-8(d).  
revocations or disqualifications.  
Part V—Deferred DISC Income  
Under Section 995(f)(3)  
In general, deferred DISC income is:  
Exception. The exemption does not  
apply to distributions of accumulated  
pre-1985 DISC income of an IC-DISC or  
former DISC that was made taxable under  
section 995(b)(2) because of a prior  
revocation of the DISC election or  
disqualification of the DISC. For more  
details on these distributions, see  
Temporary Regulations section  
1.921-1T(a)(7).  
1. Accumulated IC-DISC income (for  
periods after 1984) of the IC-DISC as of  
the close of the computation year, over  
After filing the IC-DISC's current year  
tax return, the allocation of the $10 million  
limitation and the computation of the line 7  
deemed distribution may be changed by  
filing an amended Form 1120-IC-DISC  
only under the conditions specified in  
Proposed Regulations section 1.995-8(b)  
(1).  
2. The amount of  
distributions-in-excess-of-income for the  
tax year of the IC-DISC following the  
computation year.  
Note. For purposes of item 2,  
distributions-in-excess-of-income means  
the excess (if any) of:  
Line 13. Accumulated IC-DISC  
Income  
Accumulated IC-DISC income (for periods  
after 1984) is accounted for this line. The  
balance of this account is used in figuring  
deferred DISC income in Part V of  
Schedule J.  
Actual distributions to shareholders out  
Part III—Deemed Distributions  
Under Section 995(b)(2)  
of accumulated IC-DISC income, over  
The amount of IC-DISC income (as  
defined in section 996(f)(1)) for the tax  
year following the computation year.  
If the corporation is a former DISC or a  
former IC-DISC that revoked IC-DISC  
status or lost IC-DISC status for failure to  
satisfy one or more of the conditions  
specified in section 992(a)(1) for the  
current tax year, each shareholder is  
deemed to have received a distribution  
taxable as a dividend on the last day of the  
current tax year. The deemed distribution  
equals the shareholder's prorated share of  
the DISC's or IC-DISC's income  
Note. For purposes of items 1 and 2, see  
section 995(f) and Proposed Regulations  
section 1.995(f)-1 for a definition of  
Schedule N  
Export Gross Receipts  
of the IC-DISC and Related U.S.  
Persons  
Line 1. Product Code and  
Percentage  
computation year, examples, and other  
details on figuring deferred DISC income.  
The amount on Part V, line 3, is  
allocated to each shareholder on Part III,  
line 10, of Schedule K (Form  
1120-IC-DISC).  
accumulated during the years just before  
DISC or IC-DISC status ended. The  
shareholder will be deemed to receive the  
distribution in equal parts on the last day  
of each of the 10 tax years of the  
Shareholders of an IC-DISC must file  
Form 8404 if the IC-DISC reports deferred  
DISC income on Schedule K, Part III,  
line 10.  
Enter on line 1a the code number and  
percentage of total export gross receipts  
(defined under Line 2. Definitions, later)  
for the product or service that accounts for  
the largest portion of the IC-DISC's export  
gross receipts. The product codes are at  
the end of these instructions. On line 1b,  
enter the same information for the  
corporation following the year of the  
termination or disqualification of the  
IC-DISC (but in no case over more than  
twice the number of years the corporation  
was a DISC or IC-DISC).  
Schedule K (Form  
1120-IC-DISC)  
Shareholder's Statement of  
IC-DISC's next largest product or service.  
Part IV—Actual Distributions  
IC-DISC Distributions  
Example. An IC-DISC has export  
gross receipts of $10 million. Selling  
agricultural chemicals accounts for $4.5  
million (45% (0.45)) of that amount, which  
is the IC-DISC's largest product or service.  
The IC-DISC should enter “287” (the  
product code for agricultural chemicals)  
and “45%” on line 1a.  
Line 1. Distributions To Meet  
Qualification Requirements Under  
Section 992(c)  
If the corporation is required to pay  
interest under section 992(c)(2)(B) on the  
amount of a distribution to meet the  
qualification requirements of section  
992(c), report this interest on Schedule E,  
line 2c. Also include the amount on  
Schedule J, Part IV, line 1, and show the  
computation of the interest on an attached  
statement.  
Attach a separate Copy A, Schedule K  
(Form 1120-IC-DISC), to Form  
1120-IC-DISC for each shareholder who  
received an actual or deemed distribution  
during the tax year or to whom the  
corporation reported deferred DISC  
income for the tax year.  
Selling industrial chemicals accounts  
for $2 million (20% (0.20) of the $10  
million total) and is the IC-DISC's  
second-largest product or service. The  
IC-DISC should enter “281” (the product  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-13-  
       
code for industrial inorganic and organic  
chemicals) and “20%” on line 1b.  
Complete column (a) to report the  
IC-DISC's export gross receipts from all  
sources (including the United States) for  
the current tax year.  
or prior year carryover, excess business  
interest expense allocated from the  
partnership.  
Line 2. Definitions  
Exclusions from filing. A taxpayer is  
not required to file Form 8990 if the  
taxpayer is a small business taxpayer and  
does not have excess business interest  
expense from a partnership. A taxpayer is  
also not required to file Form 8990 if the  
taxpayer only has business interest  
expense from these excepted trades or  
businesses:  
Column (b). Export gross receipts of  
related IC-DISCs. Complete column (b)  
to report related IC-DISCs' export gross  
receipts from all sources (including the  
United States).  
Export gross receipts are receipts from  
any of the following.  
Providing engineering or architectural  
services for construction projects located  
outside the United States.  
Selling for direct use, consumption, or  
Column (c). Export gross receipts of  
all other related U.S. persons.  
Complete column (c) to report other  
related U.S. persons' export gross  
receipts from all sources except the  
United States.  
disposition outside the United States,  
property (such as inventory) produced in  
the United States.  
An electing real property trade or  
business,  
Renting this property to unrelated  
An electing farming business, or  
persons for use outside the United States.  
Providing services involved in such a  
Certain utility businesses.  
sale or rental.  
Small business taxpayer. A small  
Line 3. Related U.S. Persons  
Enter on line 3 the name, address, and  
identifying number of related U.S. persons  
in your controlled group.  
Providing export management services.  
business taxpayer is not subject to the  
business interest expense limitation and is  
not required to file Form 8990. A small  
business taxpayer is a taxpayer that (a) is  
not a tax shelter (as defined in section  
448(d)(3)), and (b) meets the gross  
receipts test of section 448(c), discussed  
next.  
For commission sales, export gross  
receipts include the total receipts on which  
the IC-DISC earned the commission.  
Schedule O  
Other Information  
Question 6. Boycott of Israel. If  
question 6a, 6b, or 6c is checked “Yes,”  
the IC-DISC must file Form 5713 and is  
also deemed to distribute part of its  
income. See Form 5713 for more  
information.  
For purposes of line 2, Schedule N  
only, no reduction is to be made for  
receipts attributable to military property.  
Therefore, an IC-DISC's export gross  
receipts for purposes of line 2 include the  
total of the amounts from Schedule B,  
columns (b) and (d) of lines 1c, 2a, 2b, 2c,  
and 2d.  
Gross receipts test. A taxpayer  
meets the gross receipts test if the  
taxpayer has average annual gross  
receipts of $26 million or less for the 3  
prior tax years. A taxpayer's average  
annual gross receipts for the 3 prior tax  
years is determined by adding the gross  
receipts for the 3 prior tax years and  
dividing the total by 3. Gross receipts  
include the aggregate gross receipts from  
all persons treated as a single employer,  
such as a controlled group of  
Question 7. Limitation on business in-  
terest expense. For tax years beginning  
after 2017, the limitation on business  
interest expense applies to every taxpayer  
with a trade or business, unless the  
taxpayer meets certain specified  
Related persons are:  
An individual, partnership, estate, or  
trust that controls the IC-DISC;  
A corporation that controls the IC-DISC  
or is controlled by it; or  
A corporation controlled by the same  
exceptions. A taxpayer may elect out of  
the limitation for certain businesses  
otherwise subject to the business interest  
expense limitation.  
corporations, commonly controlled  
partnerships, or proprietorships, and  
affiliated service groups. See section  
448(c) and the Instructions for Form 8990  
for additional information.  
person or persons who control the  
IC-DISC.  
Control means direct or indirect  
ownership of more than 50% of the total  
voting power of all classes of stock  
entitled to vote. See section 993(a)(3).  
Certain real property trades or  
businesses and farming businesses  
qualify to make an election not to limit  
business interest expense. This is an  
irrevocable election. If you make this  
election, you are required to use the  
alternative depreciation system to  
depreciate any property with a recovery  
period of 10 years or more. Also, you are  
not entitled to the special depreciation  
allowance for that property. For a taxpayer  
with more than one qualifying business,  
the election is made with respect to each  
business.  
Check “Yes” if the taxpayer has an  
election in effect to exclude a real property  
trade or business or a farming business  
from section 163(j). For more information,  
see section 163(j) and the Instructions for  
Form 8990.  
Question 9. Tax-exempt interest.  
Report any tax-exempt interest received  
or accrued. Include any exempt-interest  
dividends received as a shareholder in a  
mutual fund or other RIC.  
U.S. person is:  
A citizen or resident of the United  
States, which includes the Commonwealth  
of Puerto Rico and possessions of the  
United States;  
Question 10. Foreign owner. If the  
answer to question 10(a) or 10(b) is "Yes,"  
enter on line 10(b)a the percentage  
owned. On line 10(b)b, enter the owner's  
country, and on line 10(b)c, if Form 5472,  
Information Return of a 25%  
A domestic corporation or partnership;  
or  
An estate or trust (other than a foreign  
estate or trust as defined in section  
7701(a)(31)).  
Foreign-Owned U.S. Corporation  
Engaged in a U.S. Trade or Business, is  
filed by the corporation, enter the number  
of Forms 5472 attached.  
Export Gross Receipts  
Column (a). All IC-DISCs should  
complete column (a) in line 2. If two or  
more IC-DISCs are related persons, only  
the IC-DISC with the largest export gross  
receipts should complete columns (b) and  
(c). If an IC-DISC acts as a commission  
agent for a related person, attribute the  
total amount of the transaction to the  
IC-DISC.  
Schedule P (Form  
1120-IC-DISC)  
Question 8. Form 8990. Generally, a  
taxpayer with a trade or business must file  
Form 8990 to claim a deduction for  
Intercompany Transfer Price or  
Commission  
Complete and attach a separate  
business interest. In addition, Form 8990  
must be filed by any taxpayer that owns an  
interest in a partnership with current year,  
Schedule P (Form 1120-IC-DISC) for each  
transaction or group of transactions to  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-14-  
     
which you apply the intercompany pricing  
rules of section 994(a)(1) and (2).  
Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United  
States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to  
figure and collect the right amount of tax.  
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form  
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents  
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,  
as required by section 6103.  
The time needed to complete and file Form 1120-IC-DISC, Schedule K (Form 1120-IC-DISC), and Schedule P (Form  
1120-IC-DISC), will vary depending on individual circumstances. The estimated burden for business taxpayers filing these forms is  
approved under OMB control number 1545-0123.  
If you have comments concerning the accuracy of these time estimates or suggestions for making these forms simpler, we would  
be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to: Internal Revenue  
Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Don't send the tax forms to this  
address. Instead, see Where To File, earlier, near the beginning of these instructions.  
Instructions for Form 1120-IC-DISC (Rev. 12-2021)  
-15-  
Form 1120-IC-DISC Codes for Principal Business Activity  
This list of principal business activities and their associated codes is  
designed to classify an enterprise by the type of activity in which it is  
engaged to facilitate the administration of the Internal Revenue  
Code. These principal business activity codes are based on the  
North American Industry Classiꢀcation System. Certain activities,  
such as manufacturing, do not apply to an IC-DISC.  
total gross receipts is derived. Total receipts means all income (line  
1, page 1).  
On page 6, Schedule O, line 1, enter the principal business activity  
and principal product or service that account for the largest  
percentage of total receipts. For example, if the principal activity is  
“Wholesale Trade Durable Goods: Machinery, Equipment, &  
Supplies,” the principal product or service may be “Engines and  
Turbines.”  
Using the list below, enter on page 1, item B, the code number for  
the speciꢀc industry group from which the largest percentage of  
Code  
Code  
Wholesale Trade  
Code  
Merchandise Wholesalers, Durable  
Goods  
423100 Motor Vehicle & Motor  
Vehicle Parts & Supplies  
423200 Furniture & Home Furnishings  
423300 Lumber & Other Construction  
Materials  
423400 Professional & Commercial  
Equipment & Supplies  
Rental and Leasing  
Code  
Rental and Leasing Services  
532100 Automotive Equipment Rental  
& Leasing  
532210 Consumer Electronics &  
Appliances Rental  
532281 Formal Wear & Costume  
Rental  
532282 Video Tape & Disc Rental  
532283 Home Health Equipment  
Rental  
532284 Recreational Goods Rental  
532289 All Other Consumer Goods  
Motion Picture and Sound  
Recording Industries  
424210 Drugs & Druggists’ Sundries  
424300 Apparel, Piece Goods, &  
Notions  
424400 Grocery & Related Products  
424500 Farm Product Raw Materials  
424600 Chemical & Allied Products  
424700 Petroleum & Petroleum  
Products  
424800 Beer, Wine, & Distilled  
Alcoholic Beverage  
424910 Farm Supplies  
424920 Book, Periodical, &  
Newspapers  
424930 Flower, Nursery Stock, &  
Florists’ Supplies  
512100 Motion Picture & Video  
Industries (except video  
rental)  
512200 Sound Recording Industries  
Broadcasting (except Internet)  
515100 Radio & Television  
Broadcasting  
515210 Cable & Other Subscription  
Programming  
423500 Metal & Mineral (except  
Petroleum)  
Telecommunications  
517000 Telecommunications  
(including paging, cellular,  
satellite, cable & other  
program distribution,  
423600 Household Appliances &  
Electrical & Electronic Goods  
423700 Hardware, & Plumbing &  
Heating Equipment, & Supplies  
423800 Machinery, Equipment, &  
Supplies  
Rental  
532310 General Rental Centers  
532400 Commercial & Industrial  
Machinery & Equipment  
Rental & Leasing  
424940 Tobacco & Tobacco Products  
424950 Paint, Varnish, & Supplies  
424990 Other Miscellaneous  
Nondurable Goods  
resellers, other  
telecommunications, &  
internet service providers)  
423910 Sporting & Recreational Goods  
& Supplies  
Professional Services  
Architectural, Engineering, and  
Related Services  
541310 Architectural Services  
541320 Landscape Architecture  
Services  
Information  
Publishing Industries (except  
Internet)  
511110 Newspaper Publishers  
511120 Periodical Publishers  
511130 Book Publishers  
511140 Directory & Mailing List  
Publishers  
511190 Other Publishers  
511210 Software Publishers  
Data Processing Services  
518210 Data Processing, Hosting, &  
Related Services  
423920 Toy & Hobby Goods & Supplies  
423930 Recyclable Materials  
423940 Jewelry, Watch, Precious  
Stone, & Precious Metals  
423990 Other Miscellaneous Durable  
Goods  
Other Information Services  
519100 Other Information Services  
(including news syndicates,  
541330 Engineering Services  
libraries, internet publishing & 541340 Drafting Services  
Merchandise Wholesalers,  
Nondurable Goods  
424100 Paper & Paper Products  
broadcasting)  
541350 Building Inspection Services  
541360 Geophysical Surveying &  
Mapping Services  
541370 Surveying & Mapping (except  
Geophysical) Services  
541380 Testing Laboratories  
Other Professional Services  
541600 Management, Scientiꢀc, &  
Technical Consulting Services  
Schedule P (Form 1120-IC-DISC) Codes for Principal Business Activity  
(These codes are used only with Schedule P (Form 1120-IC-DISC)).  
Using the list below, enter on each Schedule P, the code for the  
speciꢀc industry group and the product or product line for which the  
Schedule P is completed.  
These codes for the Principal Business Activity are designed to  
classify enterprises by the type of activity in which they are engaged  
to facilitate the administration of the Internal Revenue Code. Certain  
activities such as manufacturing do not apply to an IC-DISC.  
Code  
Transportation,  
Retail Trade  
Finance, Insurance, and Real  
Estate  
5040 Sporting, recreational,  
photographic, and hobby  
goods, toys, and supplies  
5050 Metals and minerals, except  
petroleum and scrap  
5060 Electrical goods  
5070 Hardware, plumbing and heating  
equipment  
Communication, Electric,  
Gas, and Sanitary Services  
Code  
Building materials, hardware, garden Code  
supply, mobile home dealers,  
Code  
Transportation  
4400 Water transportation  
4700 Other transportation services  
Credit agencies other than banks  
6199 Other credit agencies  
general merchandise, and food  
stores  
5220 Building materials dealers  
5251 Hardware stores  
5265 Garden supplies and mobile  
home dealers  
5300 General merchandise stores  
5410 Grocery stores  
Services  
Business services  
7389 Export management services  
Electric, gas, and sanitary services  
4910 Electric services  
4920 Gas production and distribution  
4930 Combination utility services  
5098 Other durable goods  
Nondurable  
Auto repair and services;  
miscellaneous repair services  
7500 Lease or rental of motor  
vehicles  
5110 Paper and paper products  
5129 Drugs, drug proprietaries, and  
druggists’ sundries  
5130 Apparel, piece goods, and  
notions  
5140 Groceries and related products  
5150 Farm-product raw materials  
5160 Chemicals and allied products  
5170 Petroleum and petroleum  
products  
5180 Alcoholic beverages  
5190 Miscellaneous nondurable  
goods  
5490 Other food stores  
Wholesale Trade  
Durable  
5008 Machinery, equipment, and  
supplies  
5010 Motor vehicles and automotive  
equipment  
5020 Furniture and home furnishings  
5030 Lumber and construction  
materials  
Automotive dealers and service  
stations  
5515 Motor vehicle dealers  
5541 Gasoline service stations  
5598 Other automotive dealers  
5600 Apparel and accessory stores  
5700 Furniture and home furnishings  
stores  
Amusement and recreation services  
7812 Motion picture production,  
distribution, and services  
Other services  
8911 Architectural and engineering  
services  
8930 Accounting, auditing, and  
bookkeeping  
8980 Miscellaneous services  
5800 Eating and drinking places  
Miscellaneous retail stores  
5912 Drug stores and proprietary  
stores  
5921 Liquor stores  
5995 Other miscellaneous retail stores  
-16-  
Schedule N Product Code System  
(These codes are used only with Schedule N, page 6, Form 1120-IC-DISC.)  
Using the list below, enter on line 1 of Schedule N the product code number and percent of export gross receipts as explained in  
the Specific Instructions.  
This product code system is divided into two categories—nonmanufactured product groups and services, and manufactured  
product groups.  
Code  
Code  
Code  
Nonmanufactured Product Groups and Services  
Furniture and fixtures  
Fabricated metal products (except ordnance,  
machinery and transportation)  
Grains, including soybeans  
Vegetables and melons  
Fruit and tree nuts  
Greenhouse, nursery, and ꢀoriculture  
Cotton  
Other crops (including sugar beets, peanuts,  
spices, hops, and vegetable seeds)  
Livestock  
Household furniture  
Ofꢁce furniture  
Public building and related furniture  
Other furniture and ꢁxtures  
011  
012  
013  
014  
015  
019  
251  
252  
253  
259  
Metal cans  
341  
Cutlery, hand tools, and general hardware  
342  
Heating apparatus (except electric) and plumbing  
343  
ꢁxtures  
Paper and allied products  
Fabricated structural metal products  
344  
Screw machine products and bolts, nuts, screws,  
rivets, and washers  
345  
Pulp  
Newsprint  
Business machine paper  
Stationery and ofꢁce supplies (including pens  
and pencils)  
261  
262  
263  
264  
021  
022  
023  
024  
029  
101  
102  
103  
110  
130  
147  
Poultry and eggs  
Metal stampings  
Coated and engraved metal products  
Other fabricated metal products  
346  
347  
349  
Fishery products and services (including shellꢁsh)  
Fur bearing animals and unꢁnished hides  
Other animal products  
Paperboard (including containers and boxes)  
Paper bags and coated and treated paper  
(including wallpaper and gift wrap)  
Other paper and allied products  
265  
266  
Machinery (except electrical and electronic)  
Iron ores  
Precious metals (including gold and silver)  
Other ores  
Coal mining products  
Secondary petroleum and natural gas products  
Nonmetallic mineral products and services  
(including limestone, sulfur, and fertilizer)  
Sand, gravel, and clay  
Export management services  
Computer software  
Engines and turbines  
351  
352  
353  
269  
Farm machinery and equipment  
Construction, mining, and materials handling  
machinery and equipment  
Printed media  
Metalworking machinery and equipment  
Special industry machinery (except metalworking  
machinery)  
354  
355  
Newspapers  
Periodicals  
Books  
Greeting cards  
Manifold business forms  
Other printed media  
271  
272  
273  
274  
275  
279  
148  
730  
737  
780  
850  
988  
990  
General industrial machinery and equipment  
Service industry machinery  
Other machinery (except electrical and electronic)  
356  
357  
359  
Motion picture distribution  
Engineering and architectural services  
Leasing--other property (except aircraft)  
Other nonmanufactured products  
Chemicals and allied products  
Electrical and electronic machinery, equipment, and  
supplies  
Industrial inorganic and organic chemicals  
Plastics materials, synthetic resins, synthetic  
rubber, and synthetic ꢁbers  
281  
282  
Electric power transmission and distribution  
equipment (including transformers, motors and  
generators)  
361  
Manufactured Product Groups  
Ordnance and accessories  
Drugs  
283  
284  
Electrical ofꢁce equipment (including  
photocopying machines and calculators)  
Household appliances  
Electric lighting and wiring equipment  
Audio and video equipment (except  
communication types)  
362  
Soap, detergents, and cleaning preparations,  
perfumes, cosmetics, and toiletries  
Paints, varnishes, lacquers, enamels, and allied  
products  
Guns, howitzers, mortars, and related equipment  
Ammunition (except small arms)  
Sighting and ꢁre control equipment  
Small arms  
Small arms ammunition  
Other ordnance and accessories  
191  
192  
194  
195  
196  
199  
363  
364  
365  
285  
Gum and wood chemicals  
Agricultural chemicals  
Other chemicals and allied products  
286  
287  
289  
Communication equipment  
Semiconductors, capacitors, resistors, and other  
electronic components  
366  
367  
Food and kindred products  
Refined petroleum and related products  
Meat products  
Dairy products  
Fruits, vegetables, and seafood  
Grain mill products  
Bakery products  
201  
202  
203  
204  
205  
206  
207  
208  
209  
Computer and peripheral equipment  
Other electrical and electronic machinery,  
equipment, and supplies  
368  
369  
Reꢁned petroleum  
Paving and rooꢁng materials  
Other petroleum and related products  
291  
295  
299  
Transportation equipment  
Sugar  
Rubber and plastics products  
Motor vehicles and motor vehicle equipment  
Aircraft and aircraft parts and equipment  
Leased aircraft  
Ships and nautical equipment  
Railroad equipment  
Motorcycles, bicycles, and parts  
Tanks and tank components  
Other transportation equipment  
371  
372  
373  
374  
375  
376  
378  
379  
Confectionery and related products  
Beverages  
Other food and kindred products  
Tires and inner tubes  
Rubber footwear  
Reclaimed rubber  
Fabricated rubber products  
Other rubber and plastics products  
301  
302  
303  
306  
309  
Tobacco products  
Cigarettes  
Cigars  
211  
212  
213  
Leather and leather products  
Tobacco (chewing and smoking) and snuff  
Tanned and ꢁnished leather  
Industrial leather belting and packing  
Boot and shoe cut stock and ꢁndings  
Leather footwear  
Leather gloves and mittens  
Leather luggage  
311  
312  
313  
314  
315  
316  
317  
Professional, scientific, and controlling instruments;  
photographic and optical goods; watches and clocks  
Textile mill products  
Broad woven cotton fabrics  
221  
222  
223  
224  
225  
226  
227  
228  
229  
Engineering, laboratory, and scientiꢁc and  
research instruments and associated equipment  
Instruments for measuring, controlling, and  
indicating physical characteristics  
Optical instruments, lenses, binoculars,  
microscopes, telescopes, and prisms  
Surgical, medical, and dental instruments and  
supplies  
381  
382  
383  
384  
Broad woven synthetic ꢁbers and silk fabrics  
Broad woven wool fabrics  
Narrow fabrics  
Knit fabrics  
Dyed and ꢁnished textiles  
Carpets and rugs  
Leather handbags and other personal leather  
goods  
Other leather and leather products  
319  
Stone, clay, glass, and concrete products  
Yarns and threads  
Other textile goods  
Flat glass  
321  
322  
323  
324  
325  
326  
327  
328  
329  
Ophthalmic goods  
Photographic equipment and supplies  
Watches and clocks  
385  
386  
387  
Glass and glassware, pressed and blown  
Glass products, made or purchased glass  
Cement, hydraulic  
Apparel and other finished goods  
Men’s and boys’ clothing and furnishings  
Women’s, children’s and infants’ clothing and  
accessories (including fur goods and millinery)  
Footwear (except rubber and leather)  
Other apparel and accessories  
231  
233  
Structural clay products  
Other manufactured products  
Pottery and related products  
Concrete, gypsum, and plaster products  
Cut stone and stone products  
Abrasive, asbestos, and other nonmetallic mineral  
products  
Jewelry, silverware, and plated ware  
Musical instruments  
Toys, amusement, sporting, and athletic goods  
Artists’ materials  
Costume jewelry, costume novelties, buttons,  
and other notions (except precious metal)  
Other manufactured products  
391  
393  
394  
395  
396  
238  
239  
Lumber and wood products (except furniture)  
Logs and log products  
241  
243  
Primary and secondary nonfabricated metal products  
Lumber construction materials (including  
millwork, veneer, plywood and prefabricated  
structural wood products)  
399  
Iron and steel products  
331  
332  
339  
Nonferrous metal products  
Other primary and secondary nonfabricated metal  
products  
Wooden containers  
Other lumber and wood products  
244  
249  
-17-