1120-F Schedule I Interest Expense Allocation Under Regulations section 1.

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Interest Expense Allocation Under Regulations
Section 1.882-5

SCHEDULE I
(Form 1120-F)
Department of the Treasury
Internal Revenue Service

▶

2021

▶ Attach to Form 1120-F.
Go to www.irs.gov/Form1120F for instructions and the latest information.

Employer identification number

Name of corporation

A
B

OMB No. 1545-0123

DRAFT AS OF
June 30, 2021
DO NOT FILE

Check here if the corporation is a foreign bank as defined in Regulations section 1.882-5(c)(4) . . . . . . . . .
This Schedule I is being completed with respect to (check one):
Adjusted U.S. booked liabilities method under Regs. sec. 1.882-5(d). Complete lines 1 through 15 and 21 through 25.
Separate currency pools method under Regs. sec. 1.882-5(e). Complete lines 1 through 9 and 16a through 25.

Step 1

Specify the method used to determine the value of the
corporation’s U.S. assets on lines 2 through 5 below (check one):
Adjusted basis method: Regs. sec. 1.882-5(b)(2)(i)

2
3a
b
c

Total assets per books . . . . . . . . . . .
Total interbranch assets . . . . . . . . . . .
Total non-ECI assets under section 864(c)(4)(D) . . . .
Total other non-ECI assets (attach statement-see instructions)

d

Adjustments for amounts from partnerships and certain
disregarded entities included on line 2, column (a) . . .

e

Adjustments for assets that give rise to direct interest
expense allocations under Regs. sec. 1.882-5(a)(1)(ii) . .

f

Other adjustments to average assets included on line 2
(for example, mark-to-market differences) . . . . . .

(a)
Set(s) of Books That
Give Rise to U.S.
Booked Liabilities
(see instructions)

Fair market value method: Regs. sec. 1.882-5(b)(2)(ii)

4

Combine lines 3a through 3f .

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5

Total value of U.S. assets for the tax year . . .
Column (a): Subtract line 4 from line 2.
Column (b): See instructions for amount to enter.
Column (c): See instructions for amount to enter.

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6

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Average U.S. Assets for the Tax Year: Regulations Section 1.882-5(b)

1

Step 2

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(c)
Set(s) of Books
Other Than Those
Described in
Columns (a) and (b)

(b)
Partnership
Interests

(d)
Totals
(add columns (a)
through (c))

U.S.-Connected Liabilities for the Tax Year: Regulations Section 1.882-5(c)

Specify the method used to determine the amounts in Step 2 (check one):
Actual ratio under Regs. sec. 1.882-5(c)(2). Complete lines 6a through 6c below.
Fixed ratio under Regs. sec. 1.882-5(c)(4). Complete line 6d below.
a

Average worldwide liabilities

b
c
d

Average worldwide assets . . . . . . . . . . . . . . . . . .
Divide line 6a by line 6b . . . . . . . . . . . . . . . . . . .
Fixed ratio under Regs. sec. 1.882-5(c)(4). If the corporation is a foreign bank as defined
in Regs. sec. 1.882-5(c)(4), enter 95% on line 6d. If the corporation is not a foreign bank
or an insurance company, enter 50% on line 6d . . . . . . . . . . . .

e
7a
b
c

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6a
6b
6c

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%

6d

%

Enter the ratio from line 6c or 6d, as applicable . . . . . . . . . . . . . . . . . .
U.S.-connected liabilities before Regs. sec. 1.884-1(e)(3) election(s). Multiply line 5, column (d) by line 6e .

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6e
7a

U.S. liability reduction under Regs. sec. 1.884-1(e)(3) election .
U.S.-Connected Liabilities. Subtract line 7b from line 7a . .

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7b
7c

Step 3

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%

Interest Expense Paid or Accrued on Average U.S. Booked Liabilities: Regulations Section 1.882-5(d)
(a)
Set(s) of Books That
Give Rise to U.S.
Booked Liabilities
(see instructions)

8

Total average amount of U.S. booked liabilities as defined in
Regs. sec. 1.882-5(d)(2) (see instructions) . . . . . . .
Column (a): Do not include amounts that give rise to directly
allocable interest under Regs. sec. 1.882-5(a)(1)(ii) or from
partnerships includible in column (b).
Column (b): Enter the portion of the total from Schedule P, line
11, that constitutes U.S. booked liabilities.

9

Total interest paid or accrued during the tax year on line 8 amount
Column (a): Do not include amounts that give rise to directly
allocable interest under Regs. sec. 1.882-5(a)(1)(ii) or from
partnerships includible in column (b).
Column (b): Enter the total from Schedule P, line 8.

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

(b)
Partnership
Interests

Cat. No. 49680W

(c)
Totals
(add columns
(a) and (b))

Schedule I (Form 1120-F) 2021

Page 2

Schedule I (Form 1120-F) 2021

Step 3 (cont.)

Adjusted U.S. Booked Liabilities Method: Regulations Section 1.882-5(d)

If line 7c is greater than line 8, column (c), complete lines 10 through 13 below and skip lines 14a and 14b.
If line 7c is less than or equal to line 8, column (c), skip lines 10 through 13 and complete lines 14a and 14b.
10

If the corporation is a foreign bank which is making a current-year election to use a published rate as provided
under Regs. sec. 1.882-5(d)(5)(ii)(B), check the box on this line, skip lines 10a through 10c, and enter the rate
on line 10d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶
a

DRAFT AS OF
June 30, 2021
DO NOT FILE

Total interest paid or accrued during the tax year on U.S. dollar liabilities that are not
U.S. booked liabilities included on line 8 . . . . . . . . . . . . . .

b

Average U.S. dollar denominated liabilities that are not U.S. booked liabilities included
on line 8
. . . . . . . . . . . . . . . . . . . . . . .

c
d

Divide line 10a by line 10b . . . . . . . . . . . . .
Enter the published rate, if elected under Regs. sec. 1.882-5(d)(5)(ii)(B)

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10a

10b
10c
10d

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%
%

e
11
12

Enter the rate from line 10c or, if elected, the published rate on line 10d. See instructions if amount on line 10c is zero
Excess U.S.-connected liabilities. Subtract line 8, column (c), from line 7c . . . . . . . . . . . ▶
Excess interest. Multiply line 10e by line 11 . . . . . . . . . . . . . . . . . . . . ▶

10e
11
12

13
14a
b

Add line 9, column (c), and line 12 . . . . . . . . . . . . .
Scaling ratio. Divide line 7c by line 8, column (c)
. . . . . . . .
Multiply line 9, column (c) by line 14a. See instructions for hedging amounts

13
14a
14b

15

Interest expense allocable to ECI under the adjusted U.S. booked liabilities method. Enter the result from line
13 or line 14b here and on line 21 . . . . . . . . . . . . . . . . . . . . . . . ▶

Step 3 (cont.)

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b
17a

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15

(b)
Home Country
Currency. Specify:

▶

(c)
Other Currency.
Specify:

▶

(d)
Other Currency.
Specify:

▶

U.S. assets. Enter the corporation’s U.S. assets, using the
methodology in Regs. sec. 1.882-5(e)(1)(i). If more columns
are needed, attach statement (see instructions) . . . .
Check here if a less than 3% currency election was
made . . . . . . . . . . . . . . ▶
Enter the percentage from line 6e

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b

U.S.-connected liabilities. Multiply line 16a by line 17a, or,
if a liability reduction election is made, see instructions . .

18a

Enter the total interest expense paid or accrued for the tax
year with respect to the foreign corporation’s worldwide
liabilities denominated in that foreign currency (enter in
functional currency) . . . . . . . . . . . .

b

Enter the corporation’s average worldwide liabilities (whether
interest bearing or not) denominated in that foreign currency
(enter in functional currency) . . . . . . . . . .
Borrowing rate: Divide line 18a by line 18b . . . . .

c

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Separate Currency Pools Method: Regulations Section 1.882-5(e)
(a)
U.S. Dollar
Denominated

16a

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%

%

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%

19

Interest expense allocation by separate currency pool.
Multiply line 17b by line 18c . . . . . . . . . .

20

Interest expense allocable to ECI under the separate currency pools method. Total the amounts on line 19,
columns (a) through (d), and amounts from attached statement, if any, and enter the result here and on line 21 .

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Schedule I (Form 1120-F) 2021

Page 3

Schedule I (Form 1120-F) 2021

SUMMARY—Interest Expense Allocation and Deduction under Regulations Section 1.882-5
21

21

Amount from line 15 or line 20, as applicable .

22

Enter the corporation’s interest expense directly allocable under Regs. sec. 1.882-5(a)(1)(ii).
(Include total from Schedule P, line 7.) . . . . . . . . . . . . . . .

23

Interest expense allocable to ECI under Regs. sec. 1.882-5. Add lines 21 and 22

24a

Amount of line 23 that is permanently disallowed as a deduction under the Internal Revenue
Code or under an income tax treaty (attach statement—see instructions) . . . . . .

24a (

)

b

Amount of line 23 that is deferred as a deduction in the current tax year by a provision of
the Internal Revenue Code other than section 163(j) but may be allowed as a deduction
in a subsequent tax year (attach statement—see instructions) . . . . . . . .

24b (

)

Amount of line 23 that is disallowed business interest expense under section 163(j)
(attach Form 8990) . . . . . . . . . . . . . . . . . . . .

24c (

)

d

Amount of line 23 that is required to be capitalized under certain provisions of the
Internal Revenue Code (attach statement—see instructions) . . . . . . . .

24d (

)

e

Amount of interest expense that was deferred in a previous year by a provision of the
Internal Revenue Code other than section 163(j) and allowed as a deduction in the
current tax year (attach statement—see instructions)
. . . . . . . . . .

24e

f

Amount of business interest expense that was disallowed in a previous year under
section 163(j) but allowed as a deduction in the current year . . . . . . . .

c

g
25

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22
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23

▶

DRAFT AS OF
June 30, 2021
DO NOT FILE

24f
Combine lines 24a through 24f . . . . . . . . . . . . . . . . . . . . . . . . .
Total interest expense deduction under Regs. sec. 1.882-5. Combine lines 23 and 24g and enter here and on
Form 1120-F, Section II, line 18. The amount entered on line 25 may not exceed the total interest expense paid or
accrued by the foreign corporation . . . . . . . . . . . . . . . . . . . . . . . ▶

24g

25

Schedule I (Form 1120-F) 2021