1118 Foreign Tax Credit-Corporations

1118

Form
(Rev. December 2013)
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. 12-2013)

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Form 1118 (Rev. 12-2013)

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 12,
(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. 12-2013)

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Form 1118 (Rev. 12-2013)

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
1a. Name of Foreign Corporation
(identify DISCs and
former DISCs)

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

1b. EIN (if any) of
the foreign
corporation

1c. Reference ID
number
(see instructions)

8. Dividends and
Deemed Inclusions
(a) Functional Currency

(b) U.S. Dollars

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

3. Country of
Incorporation (enter
country code - see
instructions)

9. Divide Column 8(a) by
Column 4

4. Post-1986
5. Opening Balance
Undistributed
in Post-1986
Earnings (in
Foreign Income
functional currency
Taxes
—attach schedule)

10. Multiply column 7
by column 9

Total (Add amounts in column 12. Enter the result here and include on “Totals” line of Schedule B, Part I, column 3.)

6. Foreign Taxes Paid and Deemed Paid for Tax
Year Indicated

12. Tax Deemed Paid (subtract
column 11 from column 10)

11. Section 960(c) Limitation

.

.

.

.

.

.

.

(b) Taxes Deemed Paid
(from Schedule D, Part I
— see instructions)

(a) Taxes Paid

.

.

.

.

.

.

▶
Form 1118 (Rev. 12-2013)

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Form 1118 (Rev. 12-2013)

Tax Deemed Paid by Domestic Corporation Filing Return (Continued)
Schedule C
Part II—Dividends Paid Out of Pre-1987 Accumulated Profits

1a. Name of Foreign
Corporation (identify
DISCs and former
DISCs)

1b. EIN (if any) of 1c. Reference ID
number (see
the foreign
instructions)
corporation

5. Foreign Taxes
4. Accumulated Paid and Deemed
Profits for Tax Year Paid on Earnings
3. Country of
2. Tax Year End
Indicated (in
and Profits
Incorporation (enter
(Yr-Mo) (see
functional currency (E&P) for Tax Year
country code - see
instructions)
computed under
Indicated
instructions)
section 902) (attach (in functional
schedule)
currency)
(see instructions)

8. Tax Deemed Paid
(see instructions)

6. Dividends Paid
7. Divide Column
6(a) by
Column 4

(a) Functional
Currency

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

.

(b) U.S. Dollars

.

.

.

.

.

.

.

.

.

.

(a) Functional
Currency

.

.

(b) U.S. Dollars

▶

Part III—Deemed Inclusions From Pre-1987 Earnings and Profits

1a. Name of Foreign
Corporation (identify
DISCs and former
DISCs)

1b. EIN (if any) of 1c. Reference ID
number (see
the foreign
instructions)
corporation

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

3. Country of
Incorporation
(enter country
code - see
instructions)

4. E&P for Tax Year
Indicated
5. Foreign Taxes
(in functional
Paid and Deemed
currency
Paid for
translated from U.S.
Tax Year Indicated
dollars,
(see instructions)
computed under
section 964) (attach
schedule)

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

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

(a) Functional
Currency

.

.

.

(b) U.S. Dollars

.

.

.

.

.

.

.

.

.

.

▶
Form 1118 (Rev. 12-2013)

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Form 1118 (Rev. 12-2013)

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).)
1a. Name of Second-Tier Foreign Corporation
and Its Related First-Tier Foreign Corporation

1b. EIN (if any) of the
second-tier foreign
corporation

1c. Reference ID number
(see instructions)

6. Foreign Taxes Paid and Deemed Paid for Tax Year Indicated

(a) Taxes Paid

(b) Taxes Deemed Paid (see
instructions)

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

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

3. Country of Incorporation 4. Post-1986 Undistributed
(enter country code - see
Earnings (in functional
instructions)
currency—attach schedule)

8. Dividends Paid (in functional currency)

(a) of Second-tier Corporation

9. Divide Column 8(a) by
Column 4

5. Opening Balance in
Post-1986 Foreign Income
Taxes

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

(b) of First-tier Corporation

Section B—Dividends Paid Out of Pre-1987 Accumulated Profits (Include the column 8(b) results in Schedule C, Part I, column 6(b).)

1a. Name of Second-Tier 1b. EIN (if any) of
1c. Reference ID
Foreign Corporation and Its the second-tier
number (see
Related First-Tier Foreign
foreign
instructions)
Corporation
corporation

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

3. Country of
Incorporation
(enter country
code - see
instructions)

6. Dividends Paid (in functional
5. Foreign Taxes
currency)
4. Accumulated Paid and Deemed
Profits for Tax Paid for Tax Year
Year Indicated (in
Indicated
functional currency (in functional
(b) of First-tier
—attach schedule) currency—see (a) of Second-tier
Corporation
Corporation
instructions)

8. Tax Deemed Paid
(see instructions)
7. Divide Column
6(a) by
Column 4

(a) Functional
Currency of
Second-tier
Corporation

(b) U.S. Dollars

Form 1118 (Rev. 12-2013)

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Form 1118 (Rev. 12-2013)

Schedule D
Tax Deemed Paid by First- and Second-Tier Foreign Corporations under Section 902(b) (Continued)
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.)
1a. Name of Third-Tier Foreign Corporation and
Its Related Second-Tier Foreign Corporation

1b. EIN (if any) of the thirdtier foreign corporation

1c. Reference ID number
(see instructions)

6. Foreign Taxes Paid and Deemed Paid for Tax Year Indicated

(a) Taxes Paid

(b) Taxes Deemed Paid (from
Schedule E, Part I, column 10)

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

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

3. Country of
Incorporation (enter
country code - see
instructions)

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

5. Opening Balance in
Post-1986 Foreign Income
Taxes

9. Divide Column 8(a) by
Column 4

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

8. Dividends Paid (in functional currency)

(a) of Third-tier Corporation

(b) of Second-tier Corporation

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.)

1a. Name of Third-Tier
1b. EIN (if any) of 1c. Reference ID
Foreign Corporation and Its
the third-tier
number (see
Related Second-Tier Foreign
foreign
instructions)
Corporation
corporation

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

3. Country of
Incorporation
(enter country
code - see
instructions)

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

6. Dividends Paid (in functional
currency)

(a) of Third-tier
Corporation

8. Tax Deemed Paid
(see instructions)

7. Divide Column
6(a) by
(a) In Functional
Column 4
(b) of Second-tier
Currency of
Corporation
Third-tier
Corporation

(b) U.S. Dollars

Form 1118 (Rev. 12-2013)

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Form 1118 (Rev. 12-2013)

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).)
1a. Name of Fourth-Tier Foreign Corporation and
Its Related Third-Tier Foreign Corporation

1b. EIN (if any) of the
fourth-tier foreign
corporation

1c. Reference ID number
(see instructions)

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))

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

3. Country of Incorporation 4. Post-1986 Undistributed
(enter country code- see
Earnings (in functional
instructions)
currency—attach schedule)

8. Dividends Paid (in functional currency)

(a) of Fourth-tier CFC

9. Divide Column 8(a) by
Column 4

5. Opening Balance in
Post-1986 Foreign Income
Taxes

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

(b) of Third-tier CFC

Form 1118 (Rev. 12-2013)

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Form 1118 (Rev. 12-2013)

Schedule E
Tax Deemed Paid by Certain Third-, Fourth-, and Fifth-Tier Foreign Corporations Under Section 902(b) (Continued)
Part II—Tax Deemed Paid by Fourth-Tier Foreign Corporations (Include the column 10 results in column 6(b) of Part I above.)
1a. Name of Fifth-Tier Foreign Corporation and Its
1b. EIN (if any) of the
Related Fourth-Tier Foreign Corporation
fifth-tier foreign corporation

1c. Reference ID number
(see instructions)

6. Foreign Taxes Paid and Deemed Paid for Tax Year Indicated

(a) Taxes Paid

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

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

3. Country of
Incorporation (enter
country code - see
instructions)

8. Dividends Paid (in functional currency)

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

(a) of Fifth-tier CFC

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

5. Opening Balance in
Post-1986 Foreign Income
Taxes

9. Divide Column 8(a) by
Column 4

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

(b) of Fourth-tier CFC

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

6. Foreign Taxes Paid for Tax Year Indicated

1c. Reference ID number
(see instructions)

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

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

3. Country of
Incorporation (enter
country code - see
instructions)

8. Dividends Paid (in functional currency)

(a) of Sixth-tier CFC

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

5. Opening Balance in
Post-1986 Foreign Income
Taxes

9. Divide Column 8(a) by
Column 4

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

(b) of Fifth-tier CFC

Form 1118 (Rev. 12-2013)

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Form 1118 (Rev. 12-2013)

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

B

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

C

D

D

E

Taxes suspended under section 909

E

F

Other Reductions of Taxes—Attach schedule(s)

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).

Total (add lines A through F). Enter here and on Schedule
B, Part II, line 3 . . . . . . . . . . . . . . ▶
Part II - Other Information
During the tax year, did the corporation pay or accrue any foreign tax that
was disqualified for credit under section 901(m)? . . . . . . . . .
Form 1118 (Rev. 12-2013)

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Form 1118 (Rev. 12-2013)

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. 12-2013)

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Form 1118 (Rev. 12-2013)

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. 12-2013)