Form 1118 Foreign Tax Credit - Corporations

1118

Form
(Rev. December 2012)
Department of the Treasury
Internal Revenue Service

Foreign Tax Credit—Corporations
▶

For calendar year 20

Information about Form 1118 and its separate instructions is at www.irs.gov/form1118.
▶ Attach to the corporation's tax return.
, or other tax year beginning
, 20
, and ending

OMB No. 1545-0122

, 20
Employer identification number

Name of corporation

Use a separate Form 1118 for each applicable category of income listed below. See Categories of Income in the instructions. Also, see Specific Instructions.
Check only one box on each form.
Passive Category Income

Section 901(j) Income: Name of Sanctioned Country ▶

General Category Income

Income Re-sourced by Treaty: Name of Country ▶

Schedule A

Income or (Loss) Before Adjustments (Report all amounts in U.S. dollars. See Specific Instructions.)

1. Foreign Country or
U.S. Possession (Enter
two-letter code; see
instructions. Use
a separate line for
each.) *

Gross Income or (Loss) From Sources Outside the United States (INCLUDE Foreign Branch Gross Income here and on Schedule F)
2. Deemed Dividends (see instructions)

3. Other Dividends
4. Interest

(a) Exclude gross-up (b) Gross-up (sec. 78) (a) Exclude gross-up (b) Gross-up (sec. 78)

5. Gross Rents,
Royalties, and
License Fees

6. Gross Income
From Performance
of Services

7. Other (attach
schedule)

8. Total (add columns
2(a) through 7)

A
B
C
D
E
F
Totals (add lines A through F)

* For section 863(b) income, NOLs, income from RICs, and high-taxed income, use a single line (see instructions).
Deductions (INCLUDE Foreign Branch Deductions here and on Schedule F)
9. Definitely Allocable Deductions
Rental, Royalty, and Licensing Expenses
(a) Depreciation,
Depletion, and
Amortization

(b) Other
Expenses

(c) Expenses
Related to Gross
Income From
Performance of
Services

(d) Other
Definitely
Allocable
Deductions

(e) Total Definitely
Allocable
Deductions (add
columns 9(a)
through 9(d))

10. Apportioned Share
of Deductions Not
Definitely Allocable
(enter amount from
applicable line of
Schedule H, Part II,
column (d))

11. Net Operating
Loss Deduction

12. Total
Deductions (add
columns 9(e)
through 11)

13. Total Income or
(Loss) Before
Adjustments (subtract
column 12 from
column 8)

A
B
C
D
E
F
Totals

For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 10900F

Form 1118 (Rev. 12-2012)

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Form 1118 (Rev. 12-2012)

Schedule B
Foreign Tax Credit (Report all foreign tax amounts in U.S. dollars.)
Part I—Foreign Taxes Paid, Accrued, and Deemed Paid (see instructions)
1. Credit is Claimed
for Taxes (check one):
Paid
Date Paid

Accrued
Date Accrued

2. Foreign Taxes Paid or Accrued (attach schedule showing amounts in foreign currency and conversion rate(s) used)
Tax Withheld at Source on:
(a) Dividends

(b) Interest

Other Foreign Taxes Paid or Accrued on:
(c) Rents, Royalties,
and License Fees

(d) Section
863(b) Income

(e) Foreign
Branch Income

(f) Services Income

(g) Other

3. Tax Deemed Paid
(from Schedule C—
Part I, column 10,
(h) Total Foreign Taxes
Part II, column 8(b),
Paid or Accrued (add
columns 2(a) through 2(g)) and Part III, column 8)

A
B
C
D
E
F
Totals (add lines A through F)

Part II—Separate Foreign Tax Credit (Complete a separate Part II for each applicable category of income.)
1a Total foreign taxes paid or accrued (total from Part I, column 2(h)) . . . . . . . . . . . . . . . . . . . . . . .
b Foreign taxes paid or accrued by the corporation during prior tax years that were suspended due to the rules of section 909 and for
which the related income is taken into account by the corporation during the current tax year (see instructions) . . . . . . . .
2
Total taxes deemed paid (total from Part I, column 3) . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Reductions of taxes paid, accrued, or deemed paid (enter total from Schedule G) . . . . . . . . . . . . . . . . . . (
)
4
Taxes reclassified under high-tax kickout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Enter the sum of any carryover of foreign taxes (from Schedule K, line 3, column (xiv) and from Schedule I, Part III, line 3) plus any
carrybacks to the current tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Total foreign taxes (combine lines 1a through 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Enter the amount from the applicable column of Schedule J, Part I, line 11 (see instructions). If Schedule J is not required to be completed, enter the
result from the “Totals” line of column 13 of the applicable Schedule A . . . . . . . . . . . . . . . . . . . . . . . . . . .
8a Total taxable income from all sources (enter taxable income from the corporation’s tax return) . . . . . . . . . . . . . .
b Adjustments to line 8a (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c Subtract line 8b from line 8a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Divide line 7 by line 8c. Enter the resulting fraction as a decimal (see instructions). If line 7 is greater than line 8c, enter 1 . . . . . . . . . . .
10
Total U.S. income tax against which credit is allowed (regular tax liability (see section 26(b)) minus American Samoa economic development credit) . .
11
Credit limitation (multiply line 9 by line 10) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Separate foreign tax credit (enter the smaller of line 6 or line 11 here and on the appropriate line of Part III) . . . . . . . . . . . . . . .
Part III—Summary of Separate Credits (Enter amounts from Part II, line 12 for each applicable category of income. Do not include taxes paid to sanctioned countries.)
1
Credit for taxes on passive category income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Credit for taxes on general category income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Credit for taxes on income re-sourced by treaty (combine all such credits on this line) . . . . . . . . . . . . . . . .
4
Total (add lines 1 through 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Reduction in credit for international boycott operations (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Total foreign tax credit (subtract line 5 from line 4). Enter here and on the appropriate line of the corporation’s tax return . . . . . . . . . .
Form 1118 (Rev. 12-2012)

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Form 1118 (Rev. 12-2012)

Schedule C

Tax Deemed Paid by Domestic Corporation Filing Return

Use this schedule to figure the tax deemed paid by the corporation with respect to dividends from a first-tier foreign corporation under section 902(a), and deemed
inclusions of earnings from a first- or lower-tier foreign corporation under section 960(a). Report all amounts in U.S. dollars unless otherwise specified.

Part I—Dividends and Deemed Inclusions From Post-1986 Undistributed Earnings
1. Name of Foreign
Corporation
(identify DISCs and
former DISCs)

6. Foreign Taxes Paid and Deemed 7. Post-1986
4. Post-1986
3. Country of
5. Opening
8. Dividends and
Paid for Tax Year Indicated
2. Tax Year End Incorporation Undistributed
Balance in
Foreign Income
Deemed Inclusions
Earnings
(in
(b) Taxes Deemed
(Yr-Mo) (see (enter country
Post-1986
Taxes (add
functional
Paid (from
instructions)
code from currency—attach Foreign Income (a) Taxes Paid
columns 5,
(a) Functional Currency
(b) U.S. Dollars
Schedule D, Part I—
instructions)
Taxes
6(a), and 6(b))
schedule)
see instructions)

Total (Add amounts in column 10. Enter the result here and include on “Totals” line of Schedule B, Part I, column 3.)

.

.

.

.

.

.

.

.

.

.

9. Divide
10. Tax Deemed Paid
Column 8(a) (multiply column 7 by
by Column 4
column 9)

.

.

.

▶

Part II—Dividends Paid Out of Pre-1987 Accumulated Profits
1. Name of Foreign
Corporation (identify
DISCs and former
DISCs)

2. Tax Year End
(Yr-Mo) (see
instructions)

3. Country of
Incorporation (enter
country code from
instructions)

4. Accumulated Profits
for Tax Year Indicated
(in functional currency
computed under
section 902) (attach
schedule)

5. Foreign Taxes Paid
and Deemed Paid on
Earnings and Profits
(E&P) for Tax Year
Indicated
(in functional currency)
(see instructions)

6. Dividends Paid

(a) Functional Currency

7. Divide
Column 6(a)
by
Column 4

(b) U.S. Dollars

Total (Add amounts in column 8b. Enter the result here and include on “Totals” line of Schedule B, Part I, column 3.)

.

.

.

.

.

.

.

.

8. Tax Deemed Paid
(see instructions)

(a) Functional Currency

.

.

.

.

.

(b) U.S. Dollars

▶

Part III—Deemed Inclusions From Pre-1987 Earnings and Profits
1. Name of Foreign
Corporation (identify
DISCs and former
DISCs)

2. Tax Year End
(Yr-Mo) (see
instructions)

3. Country of
Incorporation (enter
country code from
instructions)

4. E&P for Tax Year Indicated
(in functional currency
translated from U.S. dollars,
computed under section 964)
(attach schedule)

5. Foreign Taxes Paid
and Deemed Paid for
Tax Year Indicated (see
instructions)

7. Divide
8. Tax Deemed Paid
Column 6(a)
(multiply column 5 by
by
column 7)
Column 4

6. Deemed Inclusions
(b) U.S. Dollars

(a) Functional Currency

Total (Add amounts in column 8. Enter the result here and include on “Totals” line of Schedule B, Part I, column 3.) .

.

.

.

.

.

.

.

.

.

.

.

.

.

▶
Form 1118 (Rev. 12-2012)

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Form 1118 (Rev. 12-2012)

Schedule D

Tax Deemed Paid by First- and Second-Tier Foreign Corporations under Section 902(b)
Use Part I to compute the tax deemed paid by a first-tier foreign corporation with respect to dividends from a second-tier foreign corporation. Use Part II to
compute the tax deemed paid by a second-tier foreign corporation with respect to dividends from a third-tier foreign corporation. Report all amounts in U.S.
dollars unless otherwise specified.

Part I—Tax Deemed Paid by First-Tier Foreign Corporations
Section A—Dividends Paid Out of Post-1986 Undistributed Earnings (Include the column 10 results in Schedule C, Part I, column 6(b).)
1. Name of Second-Tier Foreign
Corporation and Its Related
First-Tier Foreign Corporation

7. Post-1986
4. Post-1986
6. Foreign Taxes Paid and Deemed Paid
8. Dividends Paid (in functional
2. Tax Year
3. Country of
5. Opening
Foreign Income
for Tax Year Indicated
currency)
End (Yr-Mo) Incorporation (enter Undistributed Earnings
Balance in
Taxes
(add
(in functional
(see
country code from
Post-1986 Foreign
(b) Taxes Deemed
(a) of Second-tier (b) of First-tier
columns
5,
6(a),
currency—attach
(a) Taxes Paid
instructions)
instructions)
Income Taxes
Paid (see instructions)
Corporation
Corporation
and 6(b))
schedule)

9. Divide
Column
8(a) by
Column 4

10. Tax Deemed
Paid (multiply
column 7 by
column 9)

Section B—Dividends Paid Out of Pre-1987 Accumulated Profits (Include the column 8(b) results in Schedule C, Part I, column 6(b).)
1. Name of Second-Tier Foreign
Corporation and Its Related
First-Tier Foreign Corporation

2. Tax Year
End (Yr-Mo)
(see
instructions)

3. Country of
Incorporation (enter
country code from
instructions)

4. Accumulated Profits for 5. Foreign Taxes Paid and Deemed
Tax Year Indicated
Paid for Tax Year Indicated (in
(in functional currency—
functional currency—see
attach schedule)
instructions)

7. Divide
Column
6(a) by
Column 4

6. Dividends Paid (in functional currency)
(a) of Second-tier
Corporation

(b) of First-tier
Corporation

8. Tax Deemed Paid (see instructions)
(a) Functional Currency
of Second-tier
Corporation

(b) U.S. Dollars

Part II—Tax Deemed Paid by Second-Tier Foreign Corporations
Section A—Dividends Paid Out of Post-1986 Undistributed Earnings (Include the column 10 results in Section A, column 6(b), of Part I above.)
1. Name of Third-Tier Foreign
Corporation and Its Related
Second-Tier Foreign Corporation

6. Foreign Taxes Paid and Deemed
4. Post-1986
2. Tax Year
3. Country of
5. Opening
Paid for Tax Year Indicated
Undistributed Earnings
End (Yr-Mo) Incorporation (enter
Balance in
(b) Taxes Deemed
(in functional
(see
country code from
Post-1986 Foreign
Paid (from
currency—attach
(a) Taxes Paid
instructions)
instructions)
Income Taxes
Schedule E, Part I,
schedule)
column 10)

7. Post-1986
Foreign
Income Taxes
(add columns
5, 6(a), and
6(b))

8. Dividends Paid (in functional
currency)
(a) of Third-tier
Corporation

(b) of Second-tier
Corporation

9. Divide
Column
8(a) by
Column 4

10. Tax Deemed
Paid (multiply
column 7 by
column 9)

Section B—Dividends Paid Out of Pre-1987 Accumulated Profits (Include the column 8(b) results in Section A, column 6(b), of Part I above.)
1. Name of Third-Tier Foreign
Corporation and Its Related
Second-Tier Foreign Corporation

2. Tax Year
End (Yr-Mo)
(see
instructions)

3. Country of
Incorporation (enter
country code from
instructions)

4. Accumulated Profits for 5. Foreign Taxes Paid and Deemed
Tax Year Indicated (in
Paid for Tax Year Indicated (in
functional currency—
functional currency—see
attach schedule)
instructions)

6. Dividends Paid (in functional currency)
(a) of Third-tier
Corporation

(b) of Second-tier
Corporation

7. Divide
Column
6(a) by
Column 4

8. Tax Deemed Paid (see instructions)
(a) In Functional
Currency of Third-tier
Corporation

(b) U.S. Dollars

Form 1118 (Rev. 12-2012)

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Form 1118 (Rev. 12-2012)

Schedule E

Tax Deemed Paid by Certain Third-, Fourth-, and Fifth-Tier Foreign Corporations Under Section 902(b)
Use this schedule to report taxes deemed paid with respect to dividends from eligible post-1986 undistributed earnings of fourth-, fifth- and sixth-tier controlled
foreign corporations. Report all amounts in U.S. dollars unless otherwise specified.

Part I—Tax Deemed Paid by Third-Tier Foreign Corporations (Include the column 10 results in Schedule D, Part II, Section A, column 6(b).)
1. Name of Fourth-Tier Foreign
Corporation and Its Related
Third-Tier Foreign Corporation

2. Tax Year
End
(Yr-Mo)
(see
instructions)

3. Country of
Incorporation (enter
country code from
instructions)

4. Post-1986
Undistributed Earnings
(in functional
currency—attach
schedule)

5. Opening
Balance in
Post-1986
Foreign Income
Taxes

6. Foreign Taxes Paid and Deemed
Paid for Tax Year Indicated
(a) Taxes Paid

(b) Taxes Deemed
Paid (from Part II,
column 10)

7. Post-1986
Foreign Income
Taxes (add
columns 5, 6(a),
and 6(b))

8. Dividends Paid (in
functional currency)
(a) Of
(b) Of
Fourth-tier Third-tier
CFC
CFC

9. Divide
Column
8(a) by
Column 4

10. Tax Deemed
Paid (multiply
column 7 by
column 9)

9. Divide
Column
8(a) by
Column 4

10. Tax Deemed
Paid (multiply
column 7
by column 9)

9. Divide
Column
8(a) by
Column 4

10. Tax Deemed
Paid (multiply
column 7
by column 9)

Part II—Tax Deemed Paid by Fourth-Tier Foreign Corporations (Include the column 10 results in column 6(b) of Part I above.)
1. Name of Fifth-Tier Foreign
Corporation and Its Related
Fourth-Tier Foreign Corporation

2. Tax Year
End
(Yr-Mo)
(see
instructions)

3. Country of
Incorporation (enter
country code from
instructions)

4. Post-1986
Undistributed Earnings
(in functional
currency—attach
schedule)

5. Opening
Balance in
Post-1986
Foreign Income
Taxes

6. Foreign Taxes Paid and Deemed
Paid for Tax Year Indicated
(a) Taxes Paid

(b) Taxes Deemed
Paid (from Part III,
column 10)

7. Post-1986
Foreign Income
Taxes (add
columns 5, 6(a),
and 6(b))

8. Dividends Paid (in
functional currency)
(a) Of
(b) Of
Fifth-tier Fourth-tier
CFC
CFC

Part III—Tax Deemed Paid by Fifth-Tier Foreign Corporations (Include the column 10 results in column 6(b) of Part II above.)
1. Name of Sixth-Tier Foreign
Corporation and Its Related
Fifth-Tier Foreign Corporation

2. Tax Year
End
(Yr-Mo)
(see
instructions)

3. Country of
Incorporation (enter
country code from
instructions)

4. Post-1986
Undistributed Earnings
(in functional
currency—attach
schedule)

5. Opening
Balance in
Post-1986
Foreign Income
Taxes

6. Foreign Taxes
Paid For Tax Year
Indicated

7. Post-1986
Foreign Income
Taxes (add
columns 5 and 6)

8. Dividends Paid (in
functional currency)
(a) Of
Sixth-tier
CFC

(b) Of
Fifth-tier
CFC

Form 1118 (Rev. 12-2012)

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Form 1118 (Rev. 12-2012)

Schedule F

Gross Income and Definitely Allocable Deductions for Foreign
Branches

1. Foreign Country or U.S. Possession (Enter
two-letter code from Schedule A, column 1.
Use a separate line for each.)

2. Gross Income

3. Definitely Allocable
Deductions

A

Schedule G

Reductions of Taxes Paid, Accrued, or Deemed Paid
Part I - Reduction Amounts
A Reduction of Taxes Under Section 901(e)—Attach
separate schedule
Reduction
of Foreign Oil and Gas Taxes—Enter
B
amount from Schedule I, Part II, line 4

C

Reduction of Taxes Due to International Boycott Provisions—
Enter appropriate portion of Schedule C (Form 5713), line 2b.
Important: Enter only “specifically attributable taxes” here.

C

D

Reduction of Taxes for Section 6038(c) Penalty—
Attach separate schedule

D

E

Other Reductions of Taxes—Attach schedule(s)

B

Total (add lines A through E). Enter here and on Schedule
B, Part II, line 3 . . . . . . . . . . . . . . ▶
Part II - Other Information

E
F

Totals (add lines A through F)* ▶
* Note: The Schedule F totals are not carried over to any other Form 1118 Schedule. (These totals were already included in
Schedule A.) However, the IRS requires the corporation to complete Schedule F under the authority of section 905(b).

1

During the tax year, did the corporation pay or accrue
any foreign tax that was disqualified for credit under
section 901(m)?

2

During the tax year, did the corporation pay or accrue
Yes
No
foreign taxes that were suspended due to the rules of
section 909?
If the answer to line 2 is "Yes," include the reduction amounts on Part I, line E above.

Yes

No

Form 1118 (Rev. 12-2012)

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Form 1118 (Rev. 12-2012)

Schedule H

Apportionment of Deductions Not Definitely Allocable (complete only once)

Part I—Research and Development Deductions
Product line #1 (SIC Code:
(i) Gross Sales

1

Totals (see instructions)

2
3

Total to be apportioned

(a) Sales Method
Product line #2 (SIC Code:
)*

(ii) R&D Deductions

(iii) Gross Sales

(iv) R&D
Deductions

)*

(b) Gross Income Method — Check method used:
Option 1
Option 2
Product line #1 (SIC Code:
Product line #2 (SIC Code:
)*
)*
(v) Gross Income

(vi) R&D Deductions

(c) Total R&D
Deductions Not
Definitely Allocable
(vii) Gross Income (viii) R&D Deductions (enter the sum of all
amounts entered in all
applicable “R&D
Deductions” columns)

Apportionment among
statutory groupings:

a

General category income

b Passive category income
c

Section 901(j) income*

d Income re-sourced by treaty*
4

Total foreign (add lines 3a
through 3d)
* Important: See Computer-Generated Schedule H in instructions.

Form 1118 (Rev. 12-2012)

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Form 1118 (Rev. 12-2012)

Schedule H

Apportionment of Deductions Not Definitely Allocable (continued)

Part II—Interest Deductions, All Other Deductions, and Total Deductions
(a) Average Value of Assets—Check method used:
Fair market value

Tax book value

(b) Interest Deductions

Alternative tax book value
(i) Nonfinancial
Corporations

1a

Totals (see instructions)
Amounts specifically allocable under Temp. Regs.
b 1.861-10T(e)
c

Other specific allocations under Temp. Regs. 1.861-10T

(ii) Financial Corporations

(iii) Nonfinancial
Corporations

(iv) Financial
Corporations

(c) All Other
Deductions Not
Definitely Allocable

(d) Totals (add the
corresponding
amounts from
column (c), Part I;
columns (b)(iii) and
(b)(iv), Part II; and
column (c), Part II).
Enter each amount
from lines 3a
through 3d below
in column 10 of the
corresponding
Schedule A.

d Assets excluded from apportionment formula
Total to be apportioned (subtract the sum of lines 1b,
1c, and 1d from line 1a)
3
Apportionment among statutory groupings:
2

a

General category income

b Passive category income
c

Section 901(j) income*

d Income re-sourced by treaty*
4

Total foreign (add lines 3a through 3d)

* Important: See Computer-Generated Schedule H in instructions.

Form 1118 (Rev. 12-2012)