Form Schedule H (Form 1 Schedule H (Form 1 Expenses Allocated to Effectively Connected Income under

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INSTRUCTIONS TO PRINTERS
SCHEDULE H (FORM 1120-F), PAGE 1 of 2
MARGINS: TOP 13mm (1⁄ 2 ") CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
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SCHEDULE H
(Form 1120-F)
Department of the Treasury
Internal Revenue Service

Revised proofs
requested

Ref. checks = Rev. Rul. XX

This is a new product that was developed in response to the Form 1120-F
redesign. Accordingly, no changes or additions are highlighted.

Deductions Allocated To Effectively Connected
Income Under Regulations Section 1.861-8

Employer identification number

Deductions Directly Allocated and Apportioned to ECI and Non-ECI
Note. Enter all amounts in Part I in only U.S. dollars or in only functional currency. If U.S. dollars, check box

1
2
3
4
5
6
7
8
9
10
11
12
13
14

2007

Attach to Form 1120-F.
See separate instructions.

Name of corporation

Part I

OMB No. 1545-0126

©
©

Signature

O.K. to print

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Cumulative
Changes

Date

. Otherwise, specify currency ©

1
2

Total expenses on the books of the home office
Adjustments for U.S. tax principles (attach schedule - see instructions)
Total adjusted deductions on the books of the home office. Combine lines 1 and 2
4
Interest expense (included in line 3)
Remaining
5
Bad debt expense (included in line 3)
Total of interest expense and bad debt expense. Add lines 4 and 5
General and administrative deductions included in line 3. Subtract line 6 from line 3
8
Deductions directly allocable to non-effectively connected income from subsidiaries
Deductions directly allocable to other non-effectively connected income
9
booked in the home country
Deductions directly allocable to other non-effectively connected income
10
booked in other countries (including the United States)

3

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Add lines 8 through 10
Remaining deductions on the books of the home office allocable under Regulations section
1.861-8. Subtract line 11 from line 7
Less: Deductions directly allocated to effectively connected income
Remaining deductions on the books of the home office indirectly allocable under Regulations
section 1.861-8. Subtract line 13 from line 12

Part II

from
6
7

11
12
13
14

Home Office Deductions Indirectly Allocated and Apportioned to ECI and Non-ECI
Note. Enter the amounts in Part II, lines 16 through 21, in U.S. dollars.

15
16
17
18
19
20

Section
21

Average exchange rate used to convert allocable deductions to U.S. dollars (see instructions)
Deductions indirectly allocable under Regulations section 1.861-8. Enter the amount from line
14 in U.S. dollars. If line 14 is stated in functional currency, multiply line 14 by line 15
Indirect allocation and apportionment of line 16 amount to ECI (attach computation)
Deductions directly allocated to ECI from line 13, in U.S. dollars. If stated in foreign currency,
multiply line 13 by line 15
Total home office deductions allocated to effectively connected income. Add lines 17 and 18
Total deductions from other non-U.S. locations allocated and apportioned to effectively
connected income
Total deductions allocated and apportioned to effectively connected income. Add lines 19
and 20 and enter the amount here and on Form 1120F, section II, line 26

Part III

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20
21

Indirect Allocation and Apportionment Methods and Financial Records
Note. Enter the amounts in Part III, lines 22a, 22b, 23a, 23b, and 25 (if applicable), in U.S. dollars.

● If one or more methods used are different than in prior year, check box
● If any amount on line 21 is recorded as an interbranch amount on books and records used to prepare Form 1120F, Schedule
L, include on Part IV, line 36 and check box
22
a
b
c
23
a
b
c
24
a
b
c
25
26

Gross Income Ratio:
Effectively connected gross income
Worldwide gross income
Divide line 22a by line 22b
Gross Asset Ratio:
Average U.S. assets from Schedule I, line 5, column (d)
Worldwide assets (if applicable, from Schedule I, line 6b)
Divide line 23a by line 23b
Number of Personnel:
Personnel of U.S. trade or business within the United States
Worldwide personnel of foreign corporation
Divide line 24a by line 24b
Other ratio based methods (attach schedule)
Other methods (e.g., time spent analysis) (attach schedule)

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 1120-F.

22a
22b
22c

%

23c

%

24c

%

23a
23b

24a
24b

Cat. No. 49679V

Schedule H (Form 1120-F) 2007

7
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
SCHEDULE H (FORM 1120), PAGE 2 of 2
MARGINS: TOP 13mm (1⁄ 2 ") CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Page

Schedule H (Form 1120-F) 2007

Part III

2

Indirect Allocation and Apportionment Methods and Financial Records (continued)
Financial and other records used to identify deductions allocated and apportioned to ECI
Yes No

27a
b
28
29

Published or other non-public audited financial statements
Non-audited financial statements
Home office management or other departmental cost accounting reports
Other (e.g., home country regulatory reports) (attach schedule)

Part IV

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Allocation and Apportionment of Deductions on Books and Records Used to Prepare Form 1120F, Schedule L
Note. Enter all amounts in Part IV in U.S. dollars.

30

Total expenses per books and records used to prepare Form 1120F, Schedule L

31

Adjustments for U.S. tax principles (attach schedule - see instructions)

31

32

Total deductions per line 30 books and records. Combine lines 30 and 31

32

33a

33a Third party interest expense per books and records

33b

b Interbranch interest expense per books and records
34

Bad debt expense per books and records

34

35

Other third party deductions not allocable (attach schedule)

35

36

Interbranch expenses per books not included on line 33b (attach schedule)

36

37

Add lines 33a through 36

38

Deductions on books and records allocable and apportionable under Regulations section 1.861-8.
Subtract line 37 from line 30

32
Reconciliation of allocable expenses on books under Reg. 1.861-8 (from line 38)

39a Derivative transaction deductions directly allocated under
section 1.861-8 (from line 38)

41

42

(a)
ECI Amounts

37

38

(b)
Non-ECI Amounts

(c)
Total: Add columns
(a) and (b)

39a
39b

b Other deductions directly allocated and apportioned
40

30

Total expenses directly allocated and apportioned. Add lines
39a and 39b

40

Deductions on books and records indirectly allocated and
apportioned

41

Total deductions allocated and apportioned. Add lines 40 and 41.
Column (c) must equal line 38

42

Note. Line 42, column (a) is the total of the deductions reported on Form 1120F, Section II, lines 12, 13, 14, 16, 17, 19, 20,
21, 22, 23, 24, 25, and 27.
Schedule H (Form 1120-F) 2007

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