Form Schedule I (Form 1 Schedule I (Form 1 Reduction of Oil and Gas Extraction Taxes

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I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
SCHEDULE 1 (FORM 1118), PAGE 1 of 2
PRINTS: HEAD TO HEAD
MARGINS: TOP 13 mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
1
FLAT SIZE: 216 mm (8 ⁄2 ")
279 mm (11")
PERFORATE: (NONE)
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

SCHEDULE I
(Form 1118)

Date

Signature

O.K. to print
Revised proofs
requested

Reduction of Oil and Gas Extraction Taxes

(Rev. January 2006)
Department of the Treasury
Internal Revenue Service

Action

OMB No. 1545-0122

䊳

For calendar year 20

Attach to Form 1118
, or other tax year beginning

, 20

, and ending

, 20

Name of corporation

Employer identification number

Report all amounts in U.S. dollars. Complete a separate Schedule I for each applicable category of income.

Part I

Foreign Oil and Gas Extraction Income and Taxes
1. Name of foreign country
(Use a separate line for
each country.)

Gross Oil and Gas Extraction Income From Sources Outside the United States and its Possessions (See instructions.)
2. Gross income from
extraction of minerals from
oil or gas wells

3. Gross income from sale
or exchange of assets used
in extraction

4. Certain dividends from
foreign corporations

10. Total (add columns 8
and 9)

11. Taxable income
(column 7 minus
column 10)

5. Constructive
distributions under
section 951(a)

7. Total (add columns 2
through 6)

6. Other

A
B
C
D
E
F

Totals (add lines A through F)
Deductions
8. Definitely allocable
deductions

9. Ratable part of deductions
not definitely allocable

Oil and Gas Extraction Taxes (attach schedule)
12. Paid or accrued

13. Deemed paid

14. Total (add columns 12
and 13)

A
B
C
D
E
F
Totals
For Paperwork Reduction Act Notice, see the Instructions for Form 1118.

Cat. No. 10237L

Schedule I (Form 1118) (Rev. 1-2006)

I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
SCHEDULE 1 (FORM 1118), PAGE 2 of 2
MARGINS: TOP 13 mm (1⁄2 "), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄2 ")
279 mm (11")
PERFORATE: (NONE)

PRINTS: HEAD TO HEAD
INK: BLACK

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

Schedule I (Form 1118) (Rev. 1-2006)

Part II

Page

2

Reduction Under Section 907(a)

1

Foreign oil and gas extraction income. (See Line 1 in the instructions below.)

2

Multiply line 1 by the highest rate of tax under section 11(b). (See Line 2 below.)

3

Total taxes (from Part I, column 14, “Totals” line)

4

Carryover or carryback of disallowed credits. (See section 907(f)—attach schedule.)

5

Total taxes before reduction (add line 3 and line 4)

6

Reduction (subtract line 2 from line 5; if zero or less, enter -0-). Enter here and on Schedule G,
line B of the corresponding Form 1118

General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.

Who Must File

Method of Reporting

If the corporation claims a credit for any income taxes paid,
accrued, or deemed paid during the tax year on foreign oil
and gas extraction income, the amount of such taxes eligible
for credit may be reduced. See section 907(a) and
Regulations section 1.907(a)-1 for details.
Complete Schedule I for each applicable category of
income.

Report all amounts in U.S. dollars. If it is necessary to
convert from foreign currency, attach a statement explaining
how the rate was determined.

Specific Instructions
Note. A net extraction loss from a foreign country offsets
extraction income from other foreign countries.

Part I
See section 907(c) and underlying regulations for rules on the
income to include in Part I.
Note. Do not include any dividend or interest income that is
passive income. See the instructions for Form 1118 for the
definition of passive income.
Column 2. Enter gross income from sources outside the
United States and its possessions from extraction (by the
corporation or any other person) of minerals from oil or gas
wells located outside the United States and its possessions.
Column 3. Enter gross income from sources outside the
United States and its possessions from the sale or exchange
of assets used in the trade or business of extracting minerals
from oil or gas wells located outside the United States and
its possessions.
Column 4. Enter dividends (including section 78 gross-up)
from a foreign corporation in respect of which taxes are
deemed paid under section 902 only if the dividends are paid
out of foreign oil and gas extraction income of the
distributing corporation and are not passive income.
Dividends from foreign corporations in respect of which the
corporation is not entitled to compute a deemed paid credit
are passive income and are not included in Part I.

Column 5. Enter amounts taxable under section 951(a)
(including section 78 gross-up) to the extent attributable to
the controlled foreign corporation’s foreign oil and gas
extraction income.
Column 6. Include the corporation’s distributive share of
partnership foreign oil and gas extraction income.
Do not include in column 6 interest income paid by a
foreign subsidiary, even if the interest is paid out of foreign
oil and gas extraction income of the payor and is not passive
income. See section 907(c)(3).
Columns 12 and 13. Attach a schedule to show how the
foreign taxes paid, accrued, or deemed paid with respect to
foreign oil and gas extraction income were figured.

Part II
Line 1. Enter the total from Part I, column 11, minus any
recapture of foreign oil and gas extraction losses by
recharacterizing later extraction income, as described in
section 907(c)(4).
Line 2. At the time this schedule went to print, the highest
rate of tax specified under section 11(b) was 35%.