1120-IC DISC Instructions for Form 1120-IC DISC

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Instructions for Form
1120-IC-DISC

Department of the Treasury
Internal Revenue Service

(Rev. December 2024)

(Use with December 2024 revision of Form 1120-IC-DISC, November 2018 revision
of separate Schedule K, September 2017 revision of separate Schedule P, and
September 2016 revision of separate Schedule Q)
Interest Charge Domestic International Sales Corporation Return
Section references are to the Internal Revenue Code unless
otherwise noted.
Contents

General Instructions . . . . . . . . . . . . . . . . . . . . . .
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . .
Who Must File . . . . . . . . . . . . . . . . . . . . . . . . . .
When To File . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . .
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Forms and Statements That May Be
Required . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assembling the Return . . . . . . . . . . . . . . . . . . . .
Accounting Methods . . . . . . . . . . . . . . . . . . . . . .
Accounting Periods . . . . . . . . . . . . . . . . . . . . . . .
Rounding Off to Whole Dollars . . . . . . . . . . . . . . .
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . .
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specific Instructions . . . . . . . . . . . . . . . . . . . . . .
Schedule A—Cost of Goods Sold . . . . . . . . . . . .
Schedule B—Gross Income . . . . . . . . . . . . . . . .
Schedule C—Dividends, Inclusions, and Special
Deductions . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule E—Deductions . . . . . . . . . . . . . . . . . .
Schedule J—Deemed and Actual Distributions and
Deferred DISC Income for the Tax Year . . . . . .
Schedule K (Form 1120-IC-DISC)—Shareholder's
Statement of IC-DISC Distributions . . . . . . . .
Schedule L—Balance Sheets per Books . . . . . . .
Schedule N—Export Gross Receipts of the
IC-DISC and Related U.S. Persons . . . . . . . .
Schedule O—Other Information . . . . . . . . . . . . . .
Schedule P (Form 1120-IC-DISC)—Intercompany
Transfer Price or Commission . . . . . . . . . . . .

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For the latest information about developments related to Form
1120-IC-DISC and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form1120ICDISC.

What’s New
Gross receipts test relating to method-of-accounting requirements change. We removed the threshold amount for the
gross receipts test throughout these instructions because this

Nov 5, 2024

amount is adjusted annually for inflation. For the annual adjusted
inflation amount:
1. Go to IRS.gov/Newsroom/Inflation-Adjusted-Tax-Items-byTax-Year,
2. Click on the link for the IRS tax inflation adjustments for
your tax year,
3. Click on the Revenue Procedure for the tax year, and
4. Find section 3.31, Limitation on Use of Cash Method of
Accounting, in the Revenue Procedure for the applicable amount
for the average annual gross receipts.
The term U.S. possession changed to U.S. territory. We
have updated the term U.S. possession to U.S. territory
throughout these instructions. The meaning of these terms
remains the same.

Photographs of Missing Children

The IRS is a proud partner with the National Center for Missing &
Exploited Children® (NCMEC). Photographs of missing children
selected by the Center may appear in instructions on pages that
would otherwise be blank. You can help bring these children
home by looking at the photographs and calling
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General Instructions
Purpose of Form

Form 1120-IC-DISC is an information return filed by interest
charge domestic international sales corporations (IC-DISCs),
former DISCs, and former IC-DISCs.

What Is an IC-DISC?

An IC-DISC is a domestic corporation that has elected to be an
IC-DISC and its election is still in effect. The IC-DISC election is
made by filing Form 4876-A, Election To Be Treated as an
Interest Charge DISC.
Generally, an IC-DISC is not taxed on its income.
Shareholders of an IC-DISC are taxed on its income when the
income is actually (or deemed) distributed. In addition, section
995(f) imposes an interest charge on shareholders for their
share of DISC-related deferred tax liability. See Form 8404,
Interest Charge on DISC-Related Deferred Tax Liability, for
details.

To be an IC-DISC, a corporation must be organized under the
laws of a state or the District of Columbia and meet the following
tests.
• At least 95% of its gross receipts during the tax year are
qualified export receipts.
• At the end of the tax year, the adjusted basis of its qualified
export assets is at least 95% of the sum of the adjusted basis of
all of its assets.

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• It has only one class of stock, and its outstanding stock has a
par or stated value of at least $2,500 on each day of the tax year
(or, for a new corporation, on the last day to elect IC-DISC status
for the year and on each later day).
• It maintains separate books and records.
• Its tax year must conform to the tax year of the principal
shareholder who has the highest percentage of voting power. If
two or more shareholders have the highest percentage of voting
power, the IC-DISC must elect a tax year that conforms to that of
any one of the principal shareholders. See section 441(h) and its
regulations for more information.
• Its election to be treated as an IC-DISC is in effect for the tax
year.

income, but must complete Schedules J, L, and M of Form
1120-IC-DISC and Schedule K (Form 1120-IC-DISC). Write
“Former DISC” or “Former IC-DISC” across the top of the return.

When To File

File Form 1120-IC-DISC by the 15th day of the 9th month after
the IC-DISC's tax year ends. No extensions are allowed. If the
due date falls on a Saturday, Sunday, or a legal holiday, the
corporation may file on the next business day.

Where To File

If you are using the U.S. Postal Service, file Form 1120-IC-DISC
at the following address:

See Definitions, later, and section 992 and related regulations
for details.
Distribution to meet qualification requirements.
• An IC-DISC that does not meet the gross receipts test or
qualified export asset test during the tax year will still be
considered to have met them if, after the tax year ends, the
IC-DISC makes a pro rata property distribution to its
shareholders and specifies at the time that this is a distribution to
meet the qualification requirements.
• If the IC-DISC did not meet the gross receipts test, the
distribution equals the part of its taxable income attributable to
gross receipts that are not qualified export gross receipts.
• If the IC-DISC did not meet the qualified export asset test, the
distribution equals the fair market value (FMV) of the assets that
are not qualified export assets on the last day of the tax year.
• If the IC-DISC did not meet either test, the distribution
generally equals the sum of both amounts.
Regulations section 1.992-3 explains how to figure the
distribution.
Interest on late distribution. If the IC-DISC makes a
distribution after Form 1120-IC-DISC is due, interest must be
paid to the United States Treasury. The interest charge is 41/2%
of the distribution times the number of tax years that begin after
the tax year to which the distribution relates until the date the
IC-DISC made the distribution.
If the IC-DISC must pay this interest, send the payment to the
Internal Revenue Service Center where you filed Form
1120-IC-DISC within 30 days of making the distribution. On the
payment, write the IC-DISC's name, address, and employer
identification number (EIN); the tax year; and a statement that
the payment represents the interest charge under Regulations
section 1.992-3(c)(4).

Who Must File

The corporation must file Form 1120-IC-DISC if it elected, by
filing Form 4876-A, to be treated as an IC-DISC and its election
is in effect for the tax year.
If the corporation is a former DISC or former IC-DISC, it must
file Form 1120-IC-DISC in addition to any other return required.
A former DISC is a corporation that was a DISC on or before
December 31, 1984, but failed to qualify as a DISC after
December 31, 1984, or did not elect to be an IC-DISC after
1984; and at the beginning of the current tax year, it had
undistributed income that was previously taxed or it had
accumulated DISC income.
A former IC-DISC is a corporation that was an IC-DISC in an
earlier year but did not qualify as an IC-DISC for the current tax
year; and at the beginning of the current tax year, it had
undistributed income that was previously taxed or accumulated
IC-DISC income. See section 992 and related regulations.
A former DISC or former IC-DISC need not complete lines 1
through 8 on page 1 and the schedules for figuring taxable
2

Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999
Private delivery services (PDSs). Corporations may use
certain PDSs designated by the IRS to meet the “timely mailing
as timely filing” rule for tax returns. Go to IRS.gov/PDS.
The PDS can tell you how to get written proof of the mailing
date.
For the IRS mailing address to use if you’re using a PDS, go
to IRS.gov/PDSstreetAddresses.

!

CAUTION

Private delivery services cannot deliver items to P.O.
boxes. You must use the U.S. Postal Service to mail any
item to an IRS P.O. box address.

Who Must Sign

The return must be signed and dated by:
• The president, vice president, treasurer, assistant treasurer,
chief accounting officer; or
• Any other corporate officer (such as tax officer) authorized to
sign.
If a return is filed on behalf of a corporation by a receiver,
trustee, or assignee, the fiduciary must sign the return, instead of
the corporate officer. Returns and forms signed by a receiver or
trustee in bankruptcy on behalf of a corporation must be
accompanied by a copy of the order or instructions of the court
authorizing signing of the return or form.
If an employee of the corporation completes Form
1120-IC-DISC, the paid preparer's space should remain blank.
Anyone who prepares Form 1120-IC-DISC but does not charge
the corporation should not complete that section. Generally,
anyone who is paid to prepare Form 1120-IC-DISC must sign it
and fill in the “Paid Preparer Use Only” area.
The paid preparer must complete the required preparer
information and:
• Sign the return in the space provided for the preparer's
signature, and
• Give a copy of the return to the taxpayer.
Note. A paid preparer may sign original or amended returns by
rubber stamp, mechanical device, or computer software
program.

Other Forms and Statements That
May Be Required
Informing Shareholders
Shareholders who are foreign persons. The corporation
should inform shareholders who are nonresident alien
individuals or foreign corporations, trusts, or estates that if they
have gains from disposal of stock in the IC-DISC, former DISC,
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

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or former IC-DISC, or distributions from accumulated IC-DISC
income, including deemed distributions, they must treat these
amounts as effectively connected with the conduct of a trade or
business conducted through a permanent establishment in the
United States and derived from sources within the United States.
Election to reduce basis under section 362(e)(2)(C). If
property is transferred to a corporation subject to section 362(e)
(2), the transferor and the acquiring corporation may elect, under
section 362(e)(2)(C), to reduce the transferor's basis in the stock
received instead of reducing the acquiring corporation's basis in
the property transferred. Once made, the election is irrevocable.
For more information, see section 362(e)(2) and Regulations
section 1.362-4. If an election is made, a statement must be filed
in accordance with Regulations section 1.362-4(d)(3).
Form 8992. Use Form 8992, U.S. Shareholder Calculation of
Global Intangible Low-Taxed Income (GILTI), to figure the
domestic corporation's GILTI under section 951A and attach it to
Form 1120-IC-DISC.
Form 8993. Use Form 8993, Section 250 Deduction for
Foreign-Derived Intangible Income (FDII) and Global Intangible
Low-Taxed Income (GILTI), to figure the amount of the eligible
deduction for FDII and GILTI under section 250 and attach it to
Form 1120-IC-DISC.
Other forms and statements. See the Instructions for Form
1120 and Pub. 542 for a list of other forms and statements a
corporation may need to file in addition to the forms and
statements discussed throughout these instructions.

Assembling the Return

To ensure that the corporation's tax return is correctly processed,
attach all schedules and other forms after the last page of Form
1120-IC-DISC, and in the following order.
1. Schedule N (Form 1120).
2. Form 4136.
3. Schedule D (Form 1120).
4. Form 8992.
5. Form 8993.
6. Additional schedules in alphabetical order.
7. Additional forms in numerical order.
Complete every applicable entry space on Form
1120-IC-DISC. Do not enter “See Attached” or “Available Upon
Request” instead of completing the entry spaces. If more space
is needed on the forms or schedules, attach separate
statements using the same size and format as the printed forms.
If there are supporting statements and attachments, arrange
them in the same order as the schedules or forms they support
and attach them last. Show the totals on the printed forms. Enter
the corporation's name and EIN on each supporting statement or
attachment.

Accounting Methods

Figure taxable income using the method of accounting regularly
used in keeping the IC-DISC's books and records. In all cases,
the method used must clearly show taxable income. Permissible
methods include cash, accrual, or any other method authorized
by the Internal Revenue Code.
Generally, the following rules apply. For more information, see
Pub. 538.
• An IC-DISC must use the accrual method of accounting if its
average annual gross receipts for the 3 prior tax years exceed
the annual threshold amount listed in section 3.31 of the
Revenue Procedure for the tax year of the return being filed. See
Inflation-adjusted Tax Items by Tax Year, available at IRS.gov/
Newsroom/Inflation-Adjusted-Tax-Items-by-Tax-Year, for the link
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

to the Revenue Procedure that contains the annual inflation
amount. However, see Nonaccrual experience method for
service providers., later.
• Unless it is a small business taxpayer (defined below), an
IC-DISC must use the accrual method for sales and purchases
of inventory items. See Schedule A—Cost of Goods Sold, later.
• A member of a controlled group may not use an accounting
method that would distort any group member's income, including
its own. For example, an IC-DISC acts as a commission agent
for property sales by a related corporation that uses the accrual
method and pays the IC-DISC its commission more than 2
months after the sale. In this case, the IC-DISC should not use
the cash method of accounting because that method materially
distorts its income.
Small business taxpayer. A small business taxpayer is a
taxpayer that (a) has average annual gross receipts of the annual
threshold amount listed in section 3.31 of the Revenue
Procedure for the tax year of the return being filed or less for the
3 prior tax years, and (b) is not a tax shelter (as defined in
section 448(d)(3)). See section 471(c) and Inflation-adjusted Tax
Items by Tax Year.
A small business taxpayer can adopt or change its
accounting method to account for inventories (a) in the same
manner as materials and supplies that are non-incidental, or (b)
to conform to its treatment of inventories in an applicable
financial statement (as defined in section 451(b)(3)). If it does
not have an applicable financial statement, it can use the method
of accounting used in its books and records prepared according
to its accounting procedures. See section 471(c)(1).
Change in accounting method. To change its method of
accounting used to report taxable income, for income as a whole
or for the treatment of any material item, the IC-DISC must file
Form 3115, Application for Change in Accounting Method.
See the Instructions for Form 3115 and Pub. 538 for more
information and exceptions. Also see Rev. Proc. 2024-30,
2024-30 I.R.B. 183, available at IRS.gov/IRB/
2024-30_IRB#REV-PROC-2024-30, or its successor).

Accounting Periods

An IC-DISC must figure its taxable income on the basis of a tax
year. A tax year is the annual accounting period an IC-DISC uses
to keep its records and report its income and expenses.
Generally, IC-DISCs may use a calendar year or a fiscal year.
Note. The tax year of an IC-DISC must be the same as the tax
year of the principal shareholder which, at the beginning of the
IC-DISC tax year, has the highest percentage of voting power. If
two or more shareholders have the highest percentage of voting
power, the IC-DISC must have a tax year that conforms to the tax
year of any such shareholder. See section 441(h).
See Pub. 538 for more information on accounting periods and
tax years.

Rounding Off to Whole Dollars

The IC-DISC may round off cents to whole dollars on its return
and schedules. If the IC-DISC does round to whole dollars, it
must round all amounts. To round, drop amounts under 50 cents
and increase amounts from 50 to 99 cents to the next dollar (for
example, $1.39 becomes $1 and $2.50 becomes $3).
If two or more amounts must be added to figure the amount to
enter on a line, include cents when adding the amounts and
round off only the total.

Recordkeeping

Keep the IC-DISC's records for as long as they may be needed
for the administration of any provision of the Internal Revenue
Code. Usually, records that support an item of income,
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deduction, or credit on the return must be kept for 3 years from
the date the return is due or filed, whichever is later. Keep
records that verify the IC-DISC's basis in property for as long as
they are needed to figure the basis of the original or replacement
property.
The IC-DISC should keep copies of all filed returns. They help
in preparing future and amended returns and in the calculation of
earnings and profits.

Definitions

The following definitions are based on sections 993 and 994.
Note. “United States,” as used in the following instructions,
includes Puerto Rico and other U.S. territories, as well as the 50
states and the District of Columbia.

Section 993
Qualified export receipts. Qualified export receipts are any of
the following.
1. Gross receipts from selling, exchanging, or otherwise
disposing of export property.
2. Gross receipts from leasing or renting export property that
the lessee uses outside the United States.
3. Gross receipts from supporting services related to any
qualified sale, exchange, lease, rental, or other disposition of
export property by the IC-DISC.
4. Gross receipts from selling, exchanging, or otherwise
disposing of qualified export assets that are not export property,
but only if there is a recognized gain.
5. Dividends (or amounts includible in gross income under
section 951) with respect to stock of a related foreign export
corporation (defined later).
6. Interest on any obligation that is a qualified export asset.
7. Gross receipts for engineering or architectural services for
construction projects outside the United States.
8. Gross receipts for the performance of managerial
services in furtherance of the production of other qualified export
receipts of an IC-DISC.
For more information, see Regulations section 1.993-1.
Qualified export assets. Qualified export assets are any of the
following.
1. Export property (defined later).
2. Assets used primarily in connection with the sale, lease,
rental, storage, handling, transportation, packaging, assembly, or
servicing of export property, or the performance of engineering
or architectural services described in item 7 of Qualified export
receipts, earlier, or managerial services in furtherance of the
production of qualified export receipts described in items 1, 2, 3,
and 7, earlier.
3. Accounts receivable and evidences of indebtedness
produced by transactions listed under Qualified export receipts,
items 1–4, 7, and 8, earlier.
4. Temporary investments, such as money and bank
deposits, in an amount reasonable to meet the IC-DISC's needs
for working capital.
5. Obligations related to a producer's loan (defined later).
6. Stock or securities of a related foreign export corporation
(defined later).
7. Certain obligations that are issued, guaranteed or insured
by the U.S. Export-Import Bank or the Foreign Credit Insurance
Association and that the IC-DISC acquires from such bank or
association or from the person who sold or bought the goods or
services from which the obligations arose.
4

8. Certain obligations held by the IC-DISC that were issued
by a domestic corporation organized to finance export property
sales under an agreement with the Export-Import Bank under
which the domestic corporation makes export loans that the
Export-Import Bank guarantees.
9. Amounts (other than reasonable working capital) on
deposit in the United States used to acquire qualified export
assets within the time provided by Regulations section
1.993-2(j).
See Regulations section 1.993-2 for more information.
Export property. Export property must be:
1. Made, grown, or extracted in the United States by a
person other than an IC-DISC;
2. Neither excluded under section 993(c)(2) nor declared in
short supply under section 993(c)(3);
3. Held mainly for sale, lease, or rent in the ordinary course
of a trade or business, by or to an IC-DISC for direct use,
consumption, or disposition outside the United States;
4. Property not more than 50% of the FMV of which is
attributable to articles imported into the United States; and
5. Neither sold nor leased by or to another IC-DISC that,
immediately before or after the transaction, either belongs to the
same controlled group (defined in section 993(a)(3)) as your
IC-DISC or is related to your IC-DISC in a way that would result
in losses being denied under section 267.
See Regulations section 1.993-3 for details.
A producer's loan. A producer's loan must meet all the
following terms.
1. Satisfy the requirements of sections 993(d)(2) and (3).
2. Not raise the unpaid balance due the IC-DISC on all of its
producer's loans above the level of accumulated IC-DISC
income it had at the start of the month in which it made the loan.
3. Be evidenced by a note, or other written evidence of
indebtedness, with a stated maturity date no more than 5 years
after the date of the loan.
4. Be made to a person engaged in a U.S. trade or business
of making, growing, or extracting export property.
5. Be designated as a producer's loan when made.
For more information, see Schedule Q (Form 1120-IC-DISC),
Borrower's Certificate of Compliance With the Rules for
Producer's Loans, and Regulations section 1.993-4.
A related foreign export corporation. A related foreign export
corporation includes the following.
1. A foreign international sales corporation is a related
foreign export corporation if:
• The IC-DISC directly owns more than 50% of the total voting
power of the foreign corporation's stock;
• For the tax year that ends with or within the IC-DISC's tax
year, at least 95% of the foreign corporation's gross receipts
consists of the qualified export receipts described in items 1–4 of
Qualified export receipts, earlier, and interest on the qualified
export assets listed in items 3 and 4 of Qualified export assets,
earlier; and
• The adjusted basis of the qualified export assets in items 1–4
of Qualified export assets, earlier, that the foreign corporation
held at the end of the tax year is at least 95% of the adjusted
basis of all assets it held at the end of such tax year.
2. A real property holding company is a related foreign
export corporation if:
• The IC-DISC directly owns more than 50% of the total voting
power of the foreign corporation's stock, and
• Its exclusive function is to hold title to real property located
outside the United States for the exclusive use (under lease or
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otherwise) of the IC-DISC and applicable foreign law forbids the
IC-DISC to hold title to the property.
3. An associated foreign corporation is a related foreign
export corporation if:
• The IC-DISC or a controlled group of corporations to which
the IC-DISC belongs owns less than 10% of the total voting
power of the foreign corporation's stock (section 1563 defines a
controlled group in this sense, and sections 1563(d) and (e)
define ownership), and
• The IC-DISC's ownership of the foreign corporation's stock or
securities reasonably furthers transactions that lead to qualified
export receipts for the IC-DISC.
See Regulations section 1.993-5 for more information about
related foreign export corporations.
Gross receipts. Gross receipts are the IC-DISC's total receipts
from selling, leasing, or renting property that the corporation
holds for sale, lease, or rent in the ordinary course of its trade or
business and gross income from all other sources. For
commissions on selling, leasing, or renting property, include
gross receipts from selling, leasing, or renting the property on
which the commissions arose. See Regulations section 1.993-6
for more information.

Section 994, Intercompany Pricing Rules

If a related person described in section 482 sells export property
to the IC-DISC, use the intercompany pricing rules to figure
taxable income for the IC-DISC and the seller. These rules
generally do not permit the related person to price at a loss.
Under intercompany pricing, the IC-DISC's taxable income from
the sale (regardless of the price actually charged) may not
exceed the greatest of:
1. 4% of qualified export receipts on the IC-DISC's sale of
the property plus 10% of the IC-DISC's export promotion
expenses attributable to the receipts;
2. 50% of the IC-DISC's and the seller's combined taxable
income from qualified export receipts on the property, derived
from the IC-DISC's sale of the property plus 10% of the
IC-DISC's export promotion expenses attributable to the
receipts; or
3. Taxable income based on the sale price actually charged,
provided that under section 482 the price actually charged
clearly reflects the taxable income of the IC-DISC and the related
person.
Schedule P (Form 1120-IC-DISC), Intercompany Transfer
Price or Commission, explains the intercompany pricing rules in
more detail.

Section 994(c), Export Promotion Expenses

These are expenses incurred to help distribute or sell export
property for use or distribution outside the United States. These
expenses do not include income tax, but do include 50% of the
cost of shipping the export property on U.S.-owned and
U.S.-operated aircraft or ships in those cases where U.S. law or
regulations do not require that the export property be shipped on
such aircraft or ships.

Deficits in Earnings and Profits

A deficit in earnings and profits is chargeable in the following
order.
1. First, to any earnings and profits other than accumulated
IC-DISC income or previously taxed income.
2. Second, to any accumulated IC-DISC income.
3. Third, to previously taxed income.
Do not apply any deficit in earnings and profits against
accumulated IC-DISC income that, as a result of the
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

corporation's revoking its election to be treated as an IC-DISC
(or other disqualification), is deemed distributed to the
shareholders. See section 995(b)(2)(A).

Penalties

The IC-DISC may have to pay the following penalties unless it
can show that it had reasonable cause for not providing
information or not filing a return.
• $100 for each instance of not providing required information,
up to $25,000 during the calendar year.
• $1,000 for not filing a return.
See section 6686 for other details.
If you receive a notice about penalty and interest after you file
Form 1120-IC-DISC, send us an explanation and we will
determine if you meet reasonable-cause criteria. Do not attach
an explanation when you file Form 1120-IC-DISC.
Trust fund recovery penalty. This penalty may apply if certain
excise, income, social security, and Medicare taxes that must be
collected or withheld are not collected or withheld, or these taxes
are not paid. These taxes are generally reported on:
• Form 720, Quarterly Federal Excise Tax Return;
• Form 941, Employer's Quarterly Federal Tax Return;
• Form 944, Employer's Annual Federal Tax Return; or
• Form 945, Annual Return of Withheld Federal Income Tax.
The trust fund recovery penalty may be imposed on all
persons who are determined by the IRS to have been
responsible for collecting, accounting for, and paying over these
taxes, and who acted willfully in not doing so. The penalty is
equal to the full amount of the unpaid trust fund tax. See the
Instructions for Form 720 or Pub. 15 (Circular E), Employer's Tax
Guide, for details, including the definition of responsible persons.
Other penalties. Other penalties may be imposed for
negligence, substantial understatement of tax, reportable
transaction understatements, and fraud. See sections 6662,
6662A, and 6663.

Specific Instructions
Entity Information
Period Covered. Enter the tax year in the space provided at the
top of the form. For a calendar year, enter the last two digits of
the calendar year in the first entry space. For a fiscal or short tax
year return, fill in the tax year space at the top of the form.
Name and Address. Include the suite, room, or other unit
number after the street address. If the Post Office does not
deliver mail to the street address and the corporation has a P.O.
box, show the box number instead.
Item C—Employer Identification Number (EIN). Enter the
corporation's EIN. If the corporation does not have an EIN, it
must apply for one. An EIN may be applied for:
• Online – Go to IRS.gov/EIN. The EIN is issued immediately
once the application information is validated.
• By faxing or mailing Form SS-4, Application for Employer
Identification Number. Corporations located in the United States
or U.S. territories can use the online application. Foreign
corporations should call 267-941-1099 (not a toll free number)
for more information on obtaining an EIN. See the Instructions for
Form SS-4.
EIN applied for but not received. If the corporation has not
received its EIN by the time the return is due, enter "Applied For"
and the date the corporation applied in the space for the EIN.
However, if the corporation is filing its return electronically, an
EIN is required at the time the return is filed. An exception
applies to subsidiaries of corporations whose returns are filed
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with the parent's electronically filed consolidated Form 1120.
These subsidiaries should enter "Applied For" in the space for
the EIN on their returns. The subsidiaries' returns are identified
under the parent corporation's EIN.
For more information, see the Instructions for Form SS-4.
Item E—Total Assets. Enter the IC-DISC's total assets (as
determined by the accounting method regularly used in keeping
the IC-DISC's books and records) at the end of the tax year. If
there are no assets at the end of the tax year, enter -0-.
Item F—Initial Return, Final Return, Name Change, Address
Change, or Amended Return.
• If this is the IC-DISC's initial or final return, check the
applicable box in item F at the top of the form.
• If the IC-DISC has changed its address since it last filed a
return, check the box for “Address change.”
• If the IC-DISC changed its name since it last filed a return,
check the box for “Name change.” Generally, an IC-DISC must
also have amended its articles of incorporation and filed the
amendment with the state in which it was incorporated.
• To correct an error on a Form 1120-IC-DISC already filed, file
an amended Form 1120-IC-DISC and check the “Amended
return” box. If the amended return changes the income or
distributions of income to shareholders, an amended Schedule K
(Form 1120-IC-DISC) must be filed with the amended Form
1120-IC-DISC and given to each shareholder. Write
“AMENDED” across the top of the corrected Schedule K you
give to each shareholder.
Note. If a change in address or responsible party occurs after
the return is filed, use Form 8822-B, Change of Address or
Responsible Party—Business, to notify the IRS. See the
instructions for Form 8822-B for details.
Question G(1). For rules of stock attribution, see section
267(c). If the owner of the voting stock of the IC-DISC was an
alien individual or a foreign corporation, partnership, trust, or
estate, check the “Yes” box in the “Foreign owner” column and
enter the name of the owner's country, in parentheses, in the
address column. “Owner's country” for individuals is their
country of residence; for other foreign entities, it is the country in
which organized or otherwise created, or in which administered.

Taxable Income

An IC-DISC must figure its taxable income although it does not
pay most taxes. An IC-DISC is exempt from the corporate
income tax and accumulated earnings tax.
An IC-DISC may not claim the general business credit or the
credit for fuel produced from a nonconventional source. In
addition, these credits may not be passed through to
shareholders of the corporation.
Line 6a. Net Operating Loss (NOL) Deduction. The NOL
deduction is the amount of the NOL carryover and NOL
carryback. The 2-year carryback rule does not apply to NOLs
arising in tax years ending after December 31, 2017. Exceptions
apply to NOLs of certain farming losses and NOLs of insurance
companies (other than life insurance companies). See section
172(b) for details.
The following special rules apply. The corporation may elect
under section 965(n) to reduce the amount of the NOL for a tax
year and the amount of taxable income reduced by NOL
carryovers or carrybacks to such tax year. See section 965(n) for
more information.
Line 7. Taxable Income. If the IC-DISC uses either the gross
receipts method or combined taxable income method to figure
the IC-DISC's taxable income attributable to any transactions
involving products or product lines, attach Schedule P (Form
6

1120-IC-DISC). Show in detail the IC-DISC's taxable income
attributable to each such transaction or group of transactions.
Net operating loss (NOL). If line 7 (figured without regard to
the items listed above under minimum taxable income) is zero or
less, the corporation may have an NOL that can be carried back
or forward as a deduction to other tax years. Generally, a
corporation first carries back an NOL attributable to farming
losses 2 tax years. However, the corporation can elect to waive
the carryback period and instead carry the farming NOL forward
to future tax years. See the Instructions for Form 1139 for other
special rules and elections.
Note. The NOL is limited to 80% of taxable income (determined
without regard to the net operating loss) for losses arising in tax
years beginning after December 31, 2017.
Line 8. Refundable Credit for Federal Tax Paid on Fuels.
Enter the credit from Form 4136.

Schedule A—Cost of Goods Sold

Generally, inventories are required at the beginning and end of
each tax year if the purchase or sale of merchandise is an
income-producing factor. See Regulations section 1.471-1. If
inventories are required, you must generally use an accrual
method of accounting for sales and purchases of inventory
items.
Exceptions for certain taxpayers. A small business taxpayer
(defined below) can adopt or change its accounting method to
account for inventories in the same manner as materials and
supplies that are non-incidental, or conform to its treatment of
inventories in an applicable financial statement (as defined in
section 451(b)(3)) (or the method of accounting used in its books
and records prepared in accordance with its accounting
procedures, if applicable financial statements are not used). See
section 471(c)(1).
If you account for inventories in the same manner as
non-incidental materials and supplies, inventory costs for raw
materials purchased for use in producing finished goods and
merchandise purchased for resale are deductible in the year the
finished goods or merchandise are sold (but not before the year
you paid for the raw materials or merchandise, if you are also
using the cash method).
Under this accounting method, you can currently deduct
expenditures for direct labor and all indirect costs that would
otherwise be included in inventory costs. See the instructions for
lines 2 and 7, earlier.
A small business taxpayer claiming exemption from the
requirement to keep inventories is changing its method of
accounting for purposes of section 481. For additional guidance
on this method of accounting, see Pub. 538. For guidance on
adopting or changing to this method of accounting, see Form
3115 and its instructions.
If you account for inventories in the same manner as
non-incidental materials and supplies, inventory costs for raw
materials purchased for use in producing finished goods and
merchandise purchased for resale are deductible in the year the
finished goods or merchandise are sold (but not before the year
you paid for the raw materials or merchandise, if you are also
using the cash method).
Under this accounting method, you can currently deduct
expenditures for direct labor and all indirect costs that would
otherwise be included in inventory costs. See the instructions for
lines 2 and 7, earlier.
A small business taxpayer claiming exemption from the
requirement to keep inventories is changing its method of
accounting for purposes of section 481. For additional guidance
on this method of accounting, see Pub. 538. For guidance on
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adopting or changing to this method of accounting, see Form
3115 and its instructions.
Small business taxpayer. A small business taxpayer is a
taxpayer that (a) has average annual gross receipts of the annual
threshold amount listed in section 3.31 of the Revenue
Procedure for the tax year of the return being filed or less for the
3 preceding tax years, and (b) is not a tax shelter (as defined in
section 448(d)(3)). See section 471(c); and Inflation-adjusted
Tax Items by Tax Year for the annual threshold amount.
Enter amounts paid for merchandise during the tax year on
line 2. The amount the IC-DISC may deduct for the tax year is
figured on line 8.
All filers not using the cash method of accounting should see
Section 263A uniform capitalization rules, later, before
completing Schedule A.
If the IC-DISC uses intercompany pricing rules (for purchases
from a related supplier), use the transfer price figured in Part II of
Schedule P (Form 1120-IC-DISC).
If the IC-DISC acts as another person's commission agent on
a sale, do not enter any amount in Schedule A for the sale. See
Schedule P (Form 1120-IC-DISC).
If the IC-DISC uses intercompany pricing rules (for purchases
from a related supplier), use the transfer price figured in Part II of
Schedule P (Form 1120-IC-DISC).
All filers not using the cash method of accounting should see
Section 263A uniform capitalization rules, later, before
completing Schedule A.
If the IC-DISC acts as another person's commission agent on
a sale, do not enter any amount in Schedule A for the sale. See
Schedule P (Form 1120-IC-DISC).
Line 1. Inventory at Beginning of the Year. If the IC-DISC is
changing its method of accounting for the current tax year, it
must refigure last year's closing inventory using the new method
of accounting and enter the result on line 1. If there is a
difference between last year's closing inventory and the refigured
amount, attach an explanation and take it into account when
figuring the IC-DISC's section 481(a) adjustment.
Line 4. Additional Section 263A Costs. An entry is required
on this line only for IC-DISCs that have elected a simplified
method of accounting.
For IC-DISCs that have elected the simplified production
method, additional section 263A costs are generally those costs,
other than interest, that were not capitalized under the IC-DISC's
method of accounting immediately prior to the effective date of
section 263A but are now required to be capitalized under
section 263A. For details, see Regulations section 1.263A-2(b).
For IC-DISCs that have elected the simplified resale method,
additional section 263A costs are generally those costs incurred
with respect to the following categories.
• Off-site storage or warehousing.
• Purchasing.
• Handling, such as processing, assembling, repackaging, and
transporting.
• General and administrative costs (mixed service costs).
A small business taxpayer is not required to capitalize costs
under section 263A. See section 263A(i).
For details, see Regulations section 1.263A-3(d).
Enter on line 4 the balance of section 263A costs paid or
incurred during the tax year not includible on lines 2, 3, and 5.
Line 5. Other Costs. Enter on line 5 any costs paid or incurred
during the tax year not entered on lines 2 through 4.
Line 7. Inventory at End of the Year. See Regulations
sections 1.263A-1 through 1.263A-3 for details on figuring the
amount of additional section 263A costs to be included in ending
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

inventory. If the IC-DISC accounts for inventoriable items in the
same manner as nonincidental materials and supplies, enter on
line 7 the portion of your raw materials and merchandise
purchased for resale that was included in the total on line 6 but
was not sold during the year.
Lines 9a Through 9f. Inventory Valuation Methods.
Inventories may be valued at:
• Cost,
• Cost or market value (whichever is lower), or
• Any other method approved by the IRS that conforms to the
requirements of the applicable regulations cited later.
However, if the IC-DISC is using the cash method of
accounting, it is required to use cost.
IC-DISCs that use erroneous valuation methods must change
to a method permitted for federal income tax purposes. Use
Form 3115 to make this change. See the Instructions for Form
3115. Also see Pub. 538.
On line 9a, check the method(s) used for valuing inventories.
Under lower of cost or market, the term “market” (for normal
goods) means the current bid price prevailing on the inventory
valuation date for the particular merchandise in the volume
usually purchased by the taxpayer. If section 263A applies to the
taxpayer, the basic elements of cost must reflect the current bid
price of all direct costs and all indirect costs properly allocable to
goods on hand at the inventory date.
Inventory may be valued below cost when the merchandise is
unsalable at normal prices or unusable in the normal way
because the goods are subnormal due to damage,
imperfections, shopwear, etc., within the meaning of Regulations
section 1.471-2(c). The goods may be valued at the current bona
fide selling price, minus direct cost of disposition (but not less
than scrap value). Bona fide selling price means actual offering
of goods during a period ending not later than 30 days after
inventory date.
If this is the first year the Last-in, First-out (LIFO) inventory
method was either adopted or extended to inventory goods not
previously valued under the LIFO method provided in section
472, attach Form 970, Application To Use LIFO Inventory
Method, or a statement with the information required by Form
970. Also check the LIFO box on line 9c. On line 9d, enter the
amount or the percent of total closing inventories computed
under section 472. Estimates are acceptable.
If the IC-DISC changed or extended its inventory method to
LIFO and had to write up the opening inventory to cost in the
year of election, report the effect of the write-up as other income
(Schedule B, line 2j or 3f), proportionately over a 3-year period
that begins with the year of the LIFO election.

Schedule B—Gross Income

If an income item falls into two or more categories, report each
part on the applicable line. For example, if interest income
consists of qualified interest from a foreign international sales
corporation and nonqualifying interest from a domestic
obligation, enter the qualified interest on an attached statement
for line 2g and the nonqualifying interest on an attached
statement for line 3f.
For gain from selling qualified export assets, attach a
separate statement in addition to the forms required for lines 2h
and 2i.
Nonaccrual experience method for service providers.
Accrual method corporations are not required to accrue certain
amounts to be received from the performance of services that,
on the basis of their experience, will not be collected, if:
• The services are in the fields of health, law, engineering,
architecture, accounting, actuarial science, performing arts, or
consulting; or
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• The corporation's average annual gross receipts for any prior
3-tax-year period does not exceed the annual threshold amount
listed in section 3.31 of the Revenue Procedure for the tax year
of the return being filed. For more details, see section 448(d)(5);
and Inflation-adjusted Tax Items by Tax Year for the annual
threshold amount.
This provision does not apply to any amount if interest is
required to be paid on the amount or if there is any penalty for
failure to timely pay the amount. See Regulations section
1.448-2 for information on the nonaccrual experience method,
including information on safe harbor methods. For information on
a book safe harbor method of accounting for corporations that
use the nonaccrual experience method of accounting, see Rev.
Proc. 2011-46, 2011-42 I.R.B. 518, as modified by Rev. Proc.
2016-29, 2016-21 I.R.B. 880. Also see the Instructions for Form
3115 for procedures to obtain automatic consent to change to
this method or make certain changes within this method.
Corporations that qualify to use the nonaccrual experience
method should attach a statement showing total gross receipts,
the amount not accrued as a result of the application of section
448(d)(5), and the net amount accrued. Enter the amount on the
applicable line of Schedule B.
Commissions: Special Rule.
Note. “United States,” as used in the following instructions,
includes Puerto Rico and other U.S. territories, as well as the 50
states and the District of Columbia.
If the IC-DISC received commissions on selling or renting
property or furnishing services, list in column (b) the gross
receipts from the sales, rentals, or services on which the
commissions arose, and in column (c), list the commissions
earned. In column (d), report receipts from noncommissioned
sales or rentals of property or furnishing of services, as well as
all other receipts.
For purposes of completing lines 1a and 1b, related
purchasers are members of the same controlled group (as
defined in section 993(a)(3)) as the IC-DISC. All other
purchasers are unrelated.
A qualified export sale or lease must meet a use test and a
destination test in order to qualify.
The use test applies at the time of the sale or lease. If the
property is used predominantly outside the United States and
the sale or lease is not for ultimate use in the United States, it is
a qualified export sale or lease. Otherwise, if a reasonable
person would believe that the property will be used in the United
States, the sale or lease is not a qualified export sale or lease.
For example, if property is sold to a foreign wholesaler and it is
known in trade circles that the wholesaler, to a substantial extent,
supplies the U.S. retail market, the sale would not be a qualified
export sale, and the receipts would not be qualified export
receipts.
Regardless of where title or risk of loss shifts from the seller
or lessor, the property must be delivered under one of the
following conditions to meet the destination test.
1. Within the United States to a carrier or freight forwarder
for ultimate delivery outside the United States to a buyer or
lessee.
2. Within the United States to a buyer or lessee who, within
1 year of the sale or lease, delivers it outside the United States or
delivers it to another person for ultimate delivery outside the
United States.
3. Within or outside the United States to an IC-DISC that is
not a member of the same controlled group (as defined in
section 993(a)(3)) as the seller or lessor.
4. Outside the United States by means of the seller's
delivery vehicle (ship, plane, etc.).
8

5. Outside the United States to a buyer or lessee at a
storage or assembly site if the property was previously shipped
from the United States by the seller or lessor.
6. Outside the United States to a purchaser or lessee if the
property was previously shipped by the seller or lessor from the
United States and if the property is located outside the United
States pursuant to a prior lease by the seller or lessor, and either
(a) the prior lease terminated at the expiration of its term (or by
the action of the prior lessee acting alone), (b) the sale occurred
or the term of the subsequent lease began after the time at
which the term of the prior lease would have expired, or (c) the
lessee under the subsequent lease is not a related person (a
member of the same controlled group as defined in section
993(a)(3) or a relationship that would result in a disallowance of
losses under section 267 or section 707(b)) immediately before
or after the lease with respect to the lessor, and the prior lease
was terminated by the action of the lessor (acting alone or
together with the lessee).
Line 1a. Enter the IC-DISC's qualified export receipts from
export property sold to foreign, unrelated buyers for delivery
outside the United States. Do not include amounts entered on
line 1b.
Line 1b. Enter the IC-DISC's qualified export receipts from
export property sold for delivery outside the United States to a
related foreign entity for resale to a foreign, unrelated buyer, or
an unrelated buyer when a related foreign entity acts as
commission agent.
Line 2a. Enter the gross amount received from leasing or
subleasing export property to unrelated persons for use outside
the United States.
Receipts from leasing export property may qualify in some
years and not in others, depending on where the lessee uses the
property. Enter only receipts that qualify during the tax year. (Use
Schedule E to deduct expenses such as repairs, interest, taxes,
and depreciation.)
Line 2b. A service connected to a sale or lease is related to it if
the service is usually furnished with that type of sale or lease in
the trade or business where it took place. A service is subsidiary
if it is less important than the sale or lease.
Line 2c. Include receipts from engineering or architectural
services on foreign construction projects abroad or proposed for
location abroad. These services include feasibility studies,
design and engineering, and general supervision of
construction, but do not include services connected with mineral
exploration.
Line 2d. Include receipts for export management services
provided to unrelated IC-DISCs.
Line 2e. Qualified dividends and inclusions from Schedule C,
line 19a.
Line 2f. Include interest received on any loan that qualifies as a
producer's loan.
Line 2g. Enter interest on any qualified export asset other than
interest on producer's loans. For example, include interest on
accounts receivable from sales in which the IC-DISC acted as a
principal or agent and interest on certain obligations issued,
guaranteed, or insured by the Export-Import Bank or the Foreign
Credit Insurance Association.
Line 2h. On Schedule D (Form 1120), Capital Gains and
Losses, report in detail every sale or exchange of a capital asset,
even if there is no gain or loss.
In addition to Schedule D (Form 1120), attach a separate
statement figuring gain from the sale of qualified export assets.

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Line 2i. Enter the net gain or loss from line 18, Part II, Form
4797, Sales of Business Property.
In addition to Form 4797, attach a separate statement figuring
gain from the sale of qualified export assets.
Line 2j. Enter any other qualified export receipts for the tax year
not reported on lines 2a through 2i.
Section 481(a) adjustment. The IC-DISC may have to make
an adjustment under section 481(a) to prevent amounts of
income or expense from being duplicated or omitted. This
section 481(a) adjustment period is generally 1 year for a net
negative adjustment and 4 years for a net positive adjustment.
However, an IC-DISC may elect to use a 1-year adjustment
period if the net section 481(a) adjustment for the change is less
than $25,000. The IC-DISC must complete the appropriate lines
of Form 3115 to make the election. See the Instructions for Form
3115 for more information.
Include any net positive section 481(a) adjustment on
Schedule B, line 2j or 3f (depending on whether the inventory,
when sold, will generate qualified export receipts). If the net
section 481(a) adjustment is negative, report it on Schedule E,
line 2g.
Line 3b. Enter receipts from selling products subsidized under a
U.S. program if they have been designated as excluded receipts.
Line 3c. Enter receipts from selling or leasing property or
services for use by any part of the U.S. government if law or
regulations require U.S. products or services to be used.
Line 3d. Enter receipts from any IC-DISC that belongs to the
same controlled group (as defined in section 993(a)(3)).
Line 3e. Nonqualified dividends and inclusions from
Schedule C, line 20a.
Line 3f. Include in an attached statement any nonqualifying
gross receipts not reported on lines 3a through 3e. Do not offset
an income item against a similar expense item.
The IC-DISC may have to report a section 481(a) adjustment
on line 3f. See Section 481(a) adjustment, earlier, for additional
information.

Schedule C—Dividends, Inclusions,
and Special Deductions

For purposes of the 20% ownership test on lines 1 through 7, the
percentage of stock owned by the corporation is based on voting
power and value of the stock. Preferred stock described in
section 1504(a)(4) is not taken into account.
Line 1, Column (a). Enter dividends (except those received on
certain debt-financed stock acquired after July 18, 1984—see
section 246A) that:
• Are received from less-than-20%-owned domestic
corporations subject to income tax, and
• Qualify for the 50% deduction under section 243(a)(1).
Also include the following on line 1.
• Taxable distributions from an IC-DISC or former DISC that are
designated as being eligible for the 50% deduction and certain
dividends of Federal Home Loan Banks. See section 246(a)(2).
• Dividends received (except those received on certain
debt-financed stock acquired after July 18, 1984) from a
regulated investment company (RIC). The amount of dividends
eligible for the dividends-received deduction under section 243
is limited by section 854(b). The corporation should receive a
notice from the RIC specifying the amount of dividends that
qualify for the deduction.
Report so-called dividends or earnings received from mutual
savings banks, etc., as interest. Do not treat them as dividends.

• Dividends (except those received on certain debt-financed
stock acquired after July 18, 1984) that are received from
20%-or-more-owned domestic corporations subject to income
tax and that are eligible for the 65% deduction under section
243(c), and
• Taxable distributions from an IC-DISC or former DISC that are
considered eligible for the 65% deduction.
Line 3, Column (a). Enter the following.
• Dividends received on certain debt-financed stock acquired
after July 18, 1984, from domestic and foreign corporations
subject to income tax and that would otherwise be subject to the
dividends-received deduction under section 243(a)(1), 243(c), or
245(a). Generally, debt-financed stock is stock that the
corporation acquired by incurring a debt (for example, it
borrowed money to buy the stock).
• Dividends received from a RIC on debt-financed stock. The
amount of dividends eligible for the dividends-received
deduction is limited by section 854(b). The corporation should
receive a notice from the RIC specifying the amount of dividends
that qualify for the deduction.
Line 3, Columns (b) and (c). Dividends received on certain
debt-financed stock acquired after July 18, 1984, are not entitled
to the full 50% or 65% dividends-received deduction. The 50%
or 65% deduction is reduced by a percentage that is related to
the amount of debt incurred to acquire the stock. See section
246A. Also see section 245(a) before making this computation
for an additional limitation that applies to dividends received from
foreign corporations. Attach a statement to Form 1120-IC-DISC
showing how the amount on line 3, column (c), was figured.
Line 4, Column (a). Enter dividends received on the preferred
stock of a less-than-20%-owned public utility that is subject to
income tax and is allowed the deduction provided in section 247
for dividends paid.
Line 5, Column (a). Enter dividends received on preferred
stock of a 20%-or-more-owned public utility that is subject to
income tax and is allowed the deduction under section 247 for
dividends paid.
Line 6, Column (a). Enter the U.S.-source portion of dividends
that:
• Are received from less-than-20%-owned foreign corporations,
and
• Qualify for the 50% deduction under section 245(a). To qualify
for the 50% deduction, the corporation must own at least 10% of
the stock of the foreign corporation by vote and value.
Line 7, Column (a). Enter the U.S.-source portion of dividends
that are received from 20%-or-more-owned foreign corporations
and that qualify for the 65% deduction under section 245(a).
Line 8, Column (a). Enter dividends received from wholly
owned foreign subsidiaries that are eligible for the 100%
deduction under section 245(b).
In general, the deduction under section 245(b) applies to
dividends paid out of the earnings and profits of a foreign
corporation for a tax year during which:
• All of its outstanding stock is owned (directly or indirectly) by
the domestic corporation receiving the dividends, and
• All of its gross income from all sources is effectively
connected with the conduct of a trade or business within the
United States.
Line 9, Column (c). Generally, line 9, column (c), may not
exceed the amount from line 29 of the Worksheet.for
Schedule C, Lines 9 and 17. However, in a year in which an NOL
occurs, this limitation does not apply even if the loss is created
by the dividends-received deduction. See sections 172(d) and
246(b).

Line 2, Column (a). Enter on line 2:
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

9

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Worksheet for Schedule C, Lines 9 and 17

Keep for Your Records

Use this worksheet to figure the dividends-received deduction after the section 246(b) limitation, including the section 250 deduction.
Also use this worksheet to figure the section 250 deduction after the section 246(b) limitation. Before completing this worksheet,
complete Form 1120-IC-DISC, page 1, line 5, and Schedule C, lines 1 through 8 and 10. Also, complete Form 8993, Part III, lines 28
and 29.
1. Refigure Form 1120-IC-DISC, page 1, line 5, without any adjustment under section 1059 and without any capital
loss carryback to the tax year under section 1212(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2. Complete Schedule C, line 10, column (c), and enter the total here

..............................

2.

3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.

4. Multiply line 3 by 65% (0.65) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. Add Schedule C, lines 2, 5, 7, and 8, column (c), and the part of the deduction on Schedule C, line 3, column (c),
that is attributable to dividends from 20%-or-more-owned corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.

6. Enter the sum of the amounts on Form 8993, Part III, lines 28 and 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

8. Subtract line 7 from line 4. If zero or more, enter this amount on line 5, skip lines 9 through 15, and go to line 16. If
less than zero, leave line 8 blank and go to line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.

9. Divide line 5 by line 7. Enter the result as a decimal (rounded to at least three places) . . . . . . . . . . . . . . . . . .

9.

10. Subtract line 4 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

11. Multiply line 10 by line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.

12. Subtract line 11 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.

13. Subtract line 9 from 1.000

.........................................................

13.

14. Multiply line 13 by line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.

15. Subtract line 14 from line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.

16. Add the total amount of dividends from 20%-or-more-owned corporations that are included on Schedule C, lines
2, 3, 5, 7, and 8, column (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.

17. Subtract line 16 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.

18. Multiply line 17 by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.

19. Add Schedule C, lines 1, 4, and 6, column (c), and the part of the deduction on Schedule C, line 3, column (c),
that is not attributable to dividends from 20%-or-more-owned corporations . . . . . . . . . . . . . . . . . . . . . . . . .

19.

20. Add line 15 (or, if line 15 is blank, line 6) and line 19

........................................

20.

21. Subtract line 20 from line 18. If zero or more, enter this amount on line 19, skip lines 22 through 28, and go to
line 29. If less than zero, leave line 21 blank and go to line 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.

22. Divide line 19 by line 20. Enter the result as a decimal (rounded to at least three places)

................

22.

23. Subtract line 18 from line 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.

24. Multiply line 23 by line 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.

25. Subtract line 24 from line 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.

26. Subtract line 22 from 1.000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.

27. Multiply line 23 by line 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.

28. Subtract line 27 from line 15 (or, if line 15 is blank, line 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.

29. Dividends-received deduction after limitation (sec. 246(b)). Add line 12 (or, if line 12 is blank, line 8) and
line 25 (or if line 25 is blank, line 19). Enter the result here and on Schedule C, line 9, column (c) . . . . . . . . . . .

29.

30. Section 250 deduction after limitation (sec. 246(b)). Enter the amount on line 28 (or, if line 28 is blank,
line 15, or, if line 28 and line 15 are blank, line 6) here and on Schedule C, line 17, column (c) . . . . . . . . . . . . .

30.

Line 10, Column (a). Enter the foreign-source portion of
dividends that:
• Are received from specified 10%-owned foreign corporations
(as defined in section 245A(b)), including gain from the sale of
stock of a foreign corporation that is treated as a dividend for
purposes of applying section 245A under section 1248(a) and
(j); and
• Qualify for the 100% deduction under section 245A excluding
any hybrid dividends.
Line 11, Column (a). Enter foreign dividends not reportable on
line 3, 6, 7, 8, or 10 of column (a).
10

• Include on line 11 any hybrid dividends from a controlled
foreign corporation (CFC). Hybrid dividends are generally
dividends received from a CFC that would otherwise be reported
on line 10 except the CFC receives a deduction (or other tax
benefit) with respect to any income, war profits, or excess profits
taxes imposed by any foreign country or territory of the United
States.
• Also include on line 11 the corporation's share of distributions
from a section 1291 fund from Form 8621, to the extent that the
amounts are taxed as dividends under section 301. See Form
8621, Information Return by a Shareholder of a Passive Foreign
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

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Investment Company or Qualified Electing Fund, and its
instructions.
Lines 12a, 12b, and 12c, Column (a). Enter Subpart F
inclusions derived from the sale by a CFC.
• Line 12a: Enter the foreign-source portion of any Subpart F
inclusions attributable to the sale or exchange by a CFC of stock
in another foreign corporation described in section 964(e)(4).
This should equal the U.S. shareholder's pro rata share of the
amount reported on Form 5471, Information Return of U.S.
Persons With Respect To Certain Foreign Corporations,
Schedule I, line 1a.
• Line 12b: Enter the pro rata share of Subpart F inclusions
attributable to hybrid dividends of tiered corporations under
section 245A(e)(2). This should equal the U.S. shareholder's pro
rata share of the amount reported on Form(s) 5471, Schedule I,
line 1b.
• Line 12c: Enter all other amounts included in income under
section 951, which should equal the U.S. shareholder's pro rata
share of the sum of the amounts on lines 1(c), 1(d), 1(e), 1(f), 2,
3, and 4 of Schedule I of Form(s) 5471.
Line 13, Column (a). Enter amounts included in income under
the section 951A GlLTI provision from Form 8992, Part II, line 5.
If you also have a Form 5471 reporting requirement, please
attach Form 5471.
Line 15, Column (a). Include the following.
• Dividends (other than capital gain distributions reported on
Schedule D (Form 1120) and exempt-interest dividends) that are
received from RICs and that are not subject to the 50%
deduction.
• Dividends from tax-exempt organizations.
• Dividends (other than capital gain distributions) received from
a real estate investment trust that, for the tax year of the trust in
which the dividends are paid, qualifies under sections 856
through 860.
• Dividends not eligible for a dividends-received deduction,
which include the following.
1. Dividends received on any share of stock held for less
than 46 days during the 91-day period beginning 45 days before
the ex-dividend date. When counting the number of days the
corporation held the stock, you may not count certain days
during which the corporation's risk of loss was diminished. See
section 246(c)(4) and Regulations section 1.246-5 for more
details.
2. Dividends attributable to periods totaling more than 366
days that the IC-DISC received on any share of preferred stock
held for less than 91 days during the 181-day period that began
90 days before the ex-dividend date. When counting the number
of days the IC-DISC held the stock, you may not count certain
days during which the IC-DISC's risk of loss was diminished.
See section 246(c)(4) and Regulations section 1.246-5 for more
details. Preferred dividends attributable to periods totaling less
than 367 days are subject to the 46-day holding period rule in
item 1.
3. Dividends on any share of stock to the extent the IC-DISC
is under an obligation (including a short sale) to make related
payments with respect to positions in substantially similar or
related property.
• Any other taxable dividend income not properly reported
elsewhere on Schedule C.
Line 17, Column (c). Generally, line 17, column (c), cannot
exceed the amount on line 30 of the Worksheet for Schedule C,
Lines 9 and 27. See the worksheet, earlier. However, in a year in
which an NOL occurs, the limitation in section 246(b)(1) does
not apply. See sections 172(d) and 246(b).
Line 19, Column (a). Qualified dividends are dividends that
qualify as qualified export receipts. They include all dividends (or
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

amounts) includible in gross income (under section 951) that are
attributable to stock of related foreign export corporations. See
Qualified export receipts. and A related foreign export
corporation. under Section 993, earlier, for more details.

Schedule E—Deductions
Limitations on Deductions
Section 263A uniform capitalization rules. The uniform
capitalization rules of section 263A require corporations to
capitalize, or include in inventory, certain costs incurred in
connection with the following.
• The production of real property and tangible personal property
held in inventory or held for sale in the ordinary course of
business.
• Real property or personal property (tangible and intangible)
acquired for resale.
• The production of real property and tangible personal property
by a corporation for use in its trade or business or in an activity
engaged in for profit.
Tangible personal property produced by a corporation
includes a film, sound recording, videotape, book, or similar
property.
IC-DISCs subject to the section 263A uniform capitalization
rules are required to capitalize:
1. Direct costs of assets produced or acquired for resale,
and
2. Certain indirect costs (including taxes) that are properly
allocable to property produced or property acquired for resale.
For inventory, some of the indirect expenses that must be
capitalized are:
• Administration expenses;
• Taxes;
• Depreciation;
• Insurance;
• Compensation paid to officers attributable to services;
• Rework labor; and
• Contributions to pension, stock bonus, and certain
profit-sharing, annuity, or deferred compensation plans.
Regulations section 1.263A-1(e)(3) specifies other indirect
costs that relate to production or resale activities that must be
capitalized and those that may be currently deductible.
Interest expense paid or incurred during the production
period of designated property must be capitalized and is
governed by special rules. For more details, see Regulations
sections 1.263A-8 through 1.263A-15.
The costs required to be capitalized under section 263A are
not deductible until the property (to which the costs relate) is
sold, used, or otherwise disposed of by the corporation. The
corporation recovers these costs through depreciation,
amortization, or cost of goods sold.
Note. A small business taxpayer (defined earlier) is not required
to capitalize costs under section 263A. A small business
taxpayer that wants to discontinue capitalizing costs under
section 263A must change its method of accounting. See
section 263A(i). Also see Change in accounting method, earlier.
For more details on the uniform capitalization rules, see
Regulations sections 1.263A-1 through 1.263A-3 and Pub. 538.
Transactions between related taxpayers. Generally, an
accrual basis taxpayer may only deduct business expenses and
interest owed to a related party in the year the payment is
included in the income of the related party. See sections 163(e)
(3) and 267(a)(2) for limitations on deductions for unpaid interest
and expenses.
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Golden parachute payments. A portion of the payments made
by a corporation to key personnel that exceeds their usual
compensation may not be deductible. This occurs when the
corporation has an agreement (golden parachute) with these key
employees to pay them these excess amounts if control of the
corporation changes. See section 280G and Regulations section
1.280G-1. Also see Line 1i. Compensation of Officers, later.
Election to deduct business start-up and organizational
costs. A corporation can elect to deduct a limited amount of
start-up and organizational costs it paid or incurred. Any
remaining costs must generally be amortized over a 180-month
period. See sections 195 and 248 and the related regulations.
Time for making an election. The corporation generally
elects to deduct start-up or organizational costs by claiming the
deduction on its income tax return filed by the due date
(including extensions) for the tax year in which the active trade or
business begins. However, for start-up or organizational costs
paid or incurred before September 9, 2008, the corporation is
required to attach a statement to its return to elect to deduct
such costs.
For more details, including special rules for costs paid or
incurred before September 9, 2008, see the Instructions for Form
4562. Also see the Guide to Business Expense Resources,
available at IRS.gov/Forms-Pubs/Guide-to-Business-ExpenseResources.
If the corporation timely filed its return for the year without
making an election, it can still make an election by filing an
amended return within 6 months of the due date of the return
(excluding extensions). Clearly indicate the election on the
amended return and write "Filed pursuant to section 301.9100-2"
at the top of the amended return. File the amended return at the
same address the corporation filed its original return. The
election applies when figuring taxable income for the current tax
year and all subsequent years.
The corporation can choose to forgo the elections above by
affirmatively electing to capitalize its start-up or organizational
costs on its income tax return filed by the due date (including
extensions) for the tax year in which the active trade or business
begins.
Note. The election to either amortize or capitalize start-up costs
is irrevocable and applies to all start-up costs that are related to
the trade or business.
Report the deductible amount of start-up and organizational
costs and any amortization on line 2g of Schedule E. For
amortization that begins during the current tax year, complete
and attach Form 4562, Depreciation and Amortization.
Limitations on deductions related to property leased to
tax-exempt entities. If an IC-DISC leases property to a
governmental or other tax-exempt entity, it may not claim
deductions related to the property to the extent that they exceed
the IC-DISC's income from the lease payments (tax-exempt-use
loss). Amounts disallowed may be carried over to the next tax
year and treated as a deduction with respect to the property for
that tax year. See section 470 for exceptions.
Contributions. See the Instructions for Form 1120 and Pub.
542 for limitations that apply to contributions.
Line 1. Export Promotion Expenses. Enter export promotion
expenses on lines 1a through 1m. Export promotion expenses
are an IC-DISC's ordinary and necessary expenses paid or
incurred to obtain qualified export receipts. Do not include
income taxes. Enter on lines 2a through 2g any part of an
expense not incurred to obtain qualified export receipts.
Line 1d. Salaries and Wages. Enter the total salaries and
wages paid for the tax year. Do not include salaries and wages
deductible elsewhere on the return, such as amounts included in
12

officers' compensation, cost of goods sold, elective contributions
to a section 401(k) cash or deferred arrangement, or amounts
contributed under a salary reduction SEP agreement or a
SIMPLE IRA plan.
If the corporation provided taxable fringe benefits to its
employees, such as personal use of a car, do not deduct
CAUTION as wages the amount allocated for depreciation and
other expenses claimed on lines 1c and 1m.

!

Line 1h. Freight. Enter 50% of the freight expenses (except
insurance) for shipping export property aboard U.S. flagships
and U.S.-owned and U.S.-operated aircraft in those cases where
you are not required to use U.S. ships or aircraft by law or
regulations.
Line 1i. Compensation of Officers. Enter deductible officers'
compensation on line 1i. Attach a statement showing the name,
social security number, and amount of compensation paid to all
officers. Do not include compensation deductible elsewhere on
the return, such as amounts included in cost of goods sold,
elective contributions to a section 401(k) cash or deferred
arrangement, or amounts contributed under a salary reduction
SEP agreement or a SIMPLE IRA plan.
See the Instructions for Form 1125-E for more information on
officers' compensation, including any special rules and
limitations that may apply.
The IC-DISC determines who is an officer under the laws of
the state where it is incorporated.
Line 1m. Other Export Promotion Expenses. Enter any other
allowable export promotion expenses not claimed elsewhere on
the return.
Note. Do not deduct fines or penalties imposed on the IC-DISC.
Line 2b. Taxes and Licenses. Enter taxes paid or accrued
during the tax year, but do not include the following.
• Taxes not imposed on the corporation.
• Taxes, including state or local sales taxes, that are paid or
incurred in connection with an acquisition or disposition of
property (these taxes must be treated as part of the cost of the
acquired property or, in the case of a disposition, as a reduction
in the amount realized on the disposition).
• Taxes assessed against local benefits that increase the value
of the property assessed (such as for paving, etc.).
• Taxes deducted elsewhere on the return, such as those
reflected in cost of goods sold.
See section 164(d) for apportionment of taxes on real
property between seller and purchaser.
Line 2c. Interest. Do not deduct the following interest.
• Interest on indebtedness incurred or continued to purchase or
carry obligations if the interest is wholly exempt from income tax.
For exceptions, see section 265(b).
• For cash basis taxpayers, prepaid interest allocable to years
following the current tax year (for example, a cash basis calendar
year taxpayer who in the current tax year prepaid interest
allocable to any period after the current tax year may deduct only
the amount allocable to the current tax year).
• Interest on debt allocable to the production of designated
property by a corporation for its own use. The corporation must
capitalize this interest. Also capitalize any interest on debt
allocable to an asset used to produce the property. See section
263A(f) and Regulations sections 1.263A-8 through 1.263A-15
for definitions and more information.
Special rules apply to the following.
• Forgone interest on certain below-market-rate loans (see
section 7872).
• Original issue discount on certain high-yield discount
obligations. See section 163(e) to figure the disqualified portion.
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

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• Interest which is allocable to unborrowed policy cash values of
life insurance, endowment, or annuity contracts issued after
June 8, 1997. See section 264(f). Attach a statement showing
the computation of the deduction.
Line 2d. Charitable Contributions. For more information on
charitable contributions, including substantiation and
recordkeeping requirements, see section 170 and the related
regulations and Pub. 526. For limitations on deduction and other
special rules that apply to corporations, see the Instructions for
Form 1120 and Pub. 542.
Line 2e. Freight. Enter freight expense not deducted on line 1h
as export promotion expense.
Line 2g. Other Expenses. Enter any other allowable deduction
not claimed on line 1 or lines 2a through 2f.
The IC-DISC may have to report a negative section 481(a)
adjustment on line 2g. See Section 481(a) adjustment earlier, for
additional information.
Generally, a deduction may not be taken for any amount that
is allocable to a class of exempt income. See section 265(b) for
exceptions.
Note. Do not deduct fines or penalties paid to a government for
violating any law.
For more information on other deductions that may apply to
corporations, see the Guide to Business Expense Resources,
available at IRS.gov/Forms-Pubs/Guide-to-Business-ExpenseResources.

Schedule J—Deemed and Actual
Distributions and Deferred DISC
Income for the Tax Year
Part I—Deemed Distributions Under Section
995(b)(1)
Line 2. Recognized Gain on Section 995(b)(1)(B) Property.
Enter gain recognized during the tax year on the sale or
exchange of property, other than property which in the hands of
the IC-DISC was a qualified export asset, previously transferred
to the IC-DISC in a transaction in which the transferor realized
gain but did not recognize the gain in whole or in part. See
section 995(b)(1)(B). Show the computation of the gain on a
separate statement. Include no more of the IC-DISC's gain than
the amount of gain the transferor did not recognize on the earlier
transfer.
Line 3. Recognized Gain on Section 995(b)(1)(C) Property.
Enter gain recognized on the sale or exchange of property
described in section 995(b)(1)(C). Show the computation of the
gain on a separate statement. Do not include any gain included
in the computation of line 2. Include only the amount of the
IC-DISC's gain that the transferor did not recognize on the earlier
transfer and that would have been treated as ordinary income if
the property had been sold or exchanged rather than transferred
to the IC-DISC. Do not include gain on the sale or exchange of
IC-DISC stock-in-trade or other property that either would be
included in inventory if on hand at the end of the tax year or is
held primarily for sale in the normal course of business.
Line 4. Income Attributable to Military Property. Enter 50%
of taxable income attributable to military property (section 995(b)
(1)(D)). Show the computation of this income. To figure taxable
income attributable to military property, use the gross income
attributable to military property for the year and the deductions
properly allocated to that income. See Regulations section
1.995-6.

Instructions for Form 1120-IC-DISC (Rev. 12-2024)

Line 9. Deemed Distributions to C Corporations. Line 9
provides for the computation of the one-seventeenth deemed
distribution of section 995(b)(1)(F)(i). Line 9 only applies to
shareholders of the IC-DISC that are C corporations.
Line 10. International Boycott Income. An IC-DISC is
deemed to distribute any income that resulted from cooperating
with an international boycott (section 995(b)(1)(F)(ii)). See Form
5713, International Boycott Report, to figure this deemed
distribution and for reporting requirements for any IC-DISC with
operations related to a boycotting country.
Line 11. Illegal Bribes, etc. An IC-DISC is deemed to
distribute the amount of any illegal payments, such as bribes or
kickbacks, that it pays, directly or indirectly, to government
officials, employees, or agents (section 995(b)(1)(F)(iii)).
Line 14. Earnings and Profits. Attach a computation showing
the earnings and profits for the tax year. See section 312 for
rules on figuring earnings and profits for the purpose of the
section 995(b)(1) limitation.
Line 17. Foreign Investment Attributable to Producer’s
Loans. For purposes of lines 17a and 17b, foreign investment in
producer's loans is the smallest of (1) the net increase in foreign
assets by members of the controlled group (defined in section
993(a)(3)) to which the IC-DISC belongs, (2) the actual foreign
investment by the group's domestic members, or (3) the
IC-DISC's outstanding producer's loans to members of the
controlled group.
Net increase in foreign assets and actual foreign investment
are defined in sections 995(d)(2) and (3).
See Regulations section 1.995-5 for additional information on
figuring foreign investment attributable to producer's loans.
Line 17a. For shareholders other than C corporations. To
figure the amount for line 17a, attach a computation showing (1)
the IC-DISC's foreign investment in producer's loans during the
tax year; (2) accumulated earnings and profits (including
earnings and profits for the current tax year) minus the amount
on Part I, line 15; and (3) accumulated IC-DISC income. Enter
the smallest of these amounts (but not less than zero) on
line 17a.
Line 17b. For C corporation shareholders. To figure the
amount for line 17b, attach a computation showing (1) the
IC-DISC's foreign investment in producer's loans during the tax
year; (2) accumulated earnings and profits (including earnings
and profits for the current tax year) minus the amount on Part I,
line 16; and (3) accumulated IC-DISC income. Enter the smallest
of these amounts (but not less than zero) on line 17b.
Lines 20 and 21. The percentages on lines 20 and 21 must
add up to 100%.
Line 22. Allocate the line 22 amount to shareholders that are
individuals, partnerships, S corporations, trusts, and estates.

Part II—Section 995(b)(1)(E) Taxable Income

Generally, any taxable income of the IC-DISC attributable to
qualified export receipts that exceed $10 million will be deemed
distributed.

Line 1. Export Receipts. If there were no commission sales,
leases, rentals, or services for the tax year, enter on Part II,
line 1, the total of lines 1c and 2k, column (e), of Schedule B.
If there were commission sales, leases, rentals, or services
for the tax year, the total qualified export receipts to be entered
on Part II, line 1, are figured as follows (section 993(f)):

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Line 1, Export Receipts Worksheet
1. Add lines 1c and 2k, column (b), Schedule B

. . . .

2. Add lines 1c and 2k, column (d), Schedule B

. . . .

3. Add lines 1 and 2. Enter on Schedule J, Part II,
line 1 . . . . . . . . . . . . . . . . . . . . . . .

. . . .

Line 3. Controlled Group Allocation. If the IC-DISC is a
member of a controlled group (as defined in section 993(a)(3))
that includes more than one IC-DISC, only one $10 million limit is
allowed to the group. If an allocation is required, a statement
showing each member's portion of the $10 million limit must be
attached to Form 1120-IC-DISC. See Proposed Regulations
section 1.995-8(f) for details.
Lines 4 and 5. Proration of $10 Million Limit. The $10 million
limit (or the controlled group member's share) is prorated on a
daily basis. Thus, for example, if, for its 2019 calendar tax year,
an IC-DISC has a short tax year of 73 days, and it is not a
member of a controlled group, the limit that would be entered on
Part II, line 5, is $2 million (73/365 times $10 million).
Line 7. Taxable Income. Enter the taxable income attributable
to line 6, qualified export receipts. The IC-DISC may select the
qualified export receipts to which the line 5 limitation is allocated.
See Proposed Regulations section 1.995-8 for details on
determining the IC-DISC's taxable income attributable to
qualified export receipts in excess of the $10 million amount.
Special rules are provided for allocating the taxable income
attributable to any related and subsidiary services, and for the
ratable allocation of the taxable income attributable to the first
transaction selected by the IC-DISC that exceeds the $10 million
amount. Deductions must be allocated and apportioned
according to the rules of Regulations section 1.861-8. The
selection of the excess receipts by the IC-DISC is intended to
permit the IC-DISC to allocate the $10 million limitation to the
qualified export receipts of those transactions occurring during
the tax year that permit the greatest amount of taxable income to
be allocated to the IC-DISC under the intercompany pricing rules
of section 994.
To avoid double counting of the deemed distribution, if an
amount of taxable income for the tax year attributable to excess
qualified export receipts is also deemed distributed under either
line 1, 2, 3, or 4 of Part I, such amount of taxable income is only
includible on that line of Part I, and must be subtracted from the
amount otherwise reportable on Part II, line 7, and carried to Part
I, line 5. See Proposed Regulations section 1.995-8(d).
After filing the IC-DISC's current year tax return, the allocation
of the $10 million limitation and the computation of the line 7
deemed distribution may be changed by filing an amended Form
1120-IC-DISC only under the conditions specified in Proposed
Regulations section 1.995-8(b)(1).

Part III—Deemed Distributions Under Section
995(b)(2)

If the corporation is a former DISC or a former IC-DISC that
revoked IC-DISC status or lost IC-DISC status for failure to
satisfy one or more of the conditions specified in section 992(a)
(1) for the current tax year, each shareholder is deemed to have
received a distribution taxable as a dividend on the last day of
the current tax year. The deemed distribution equals the
shareholder's prorated share of the DISC's or IC-DISC's income
accumulated during the years just before DISC or IC-DISC
status ended. The shareholder will be deemed to receive the
distribution in equal parts on the last day of each of the 10 tax
years of the corporation following the year of the termination or
disqualification of the IC-DISC (but in no case over more than

14

twice the number of years the corporation was a DISC or
IC-DISC).

Part IV—Actual Distributions
Line 1. Distributions To Meet Qualification Requirements
Under Section 992(c). If the corporation is required to pay
interest under section 992(c)(2)(B) on the amount of a
distribution to meet the qualification requirements of section
992(c), report this interest on Schedule E, line 2c. Also include
the amount on Schedule J, Part IV, line 1, and show the
computation of the interest on an attached statement.
Line 4a. Previously Taxed Income. Report on line 4a all actual
distributions of previously taxed income. Also, include any
distributions of pre-1985 accumulated DISC income that are
nontaxable (see the Line 12. Accumulated Pre-1985 DISC
Income, later). Enter on the dotted line to the left of the line 4a
amount the dollar amount of the distribution that is nontaxable
pre-1985 DISC income and identify it as such. Do not include
distributions of pre-1985 DISC income that are made under
section 995(b)(2) because of prior-year revocations or
disqualifications.

Part V—Deferred DISC Income Under Section
995(f)(3)

In general, deferred DISC income is:
1. Accumulated IC-DISC income (for periods after 1984) of
the IC-DISC as of the close of the computation year, over
2. The amount of distributions-in-excess-of-income for the
tax year of the IC-DISC following the computation year.

Note. For purposes of item 2, distributions-in-excess-of-income
means the excess (if any) of:
• Actual distributions to shareholders out of accumulated
IC-DISC income, over
• The amount of IC-DISC income (as defined in section 996(f)
(1)) for the tax year following the computation year.
Note. For purposes of items 1 and 2, see section 995(f) and
Proposed Regulations section 1.995(f)-1 for a definition of
computation year, examples, and other details on figuring
deferred DISC income.
The amount on Part V, line 3, is allocated to each shareholder
on Part III, line 10, of Schedule K (Form 1120-IC-DISC).
Shareholders of an IC-DISC must file Form 8404 if the
IC-DISC reports deferred DISC income on Schedule K, Part III,
line 10.

Schedule K (Form
1120-IC-DISC)—Shareholder's
Statement of IC-DISC Distributions

Attach a separate Copy A, Schedule K (Form 1120-IC-DISC), to
Form 1120-IC-DISC for each shareholder who received an
actual or deemed distribution during the tax year or to whom the
corporation reported deferred DISC income for the tax year.
For more information, see the Instructions for IC-DISC on the
back of Copy C, Schedule K (Form 1120-IC-DISC).

Schedule L—Balance Sheets per
Books

The balance sheet should agree with the IC-DISC's books and
records. Include certificates of deposits as cash on line 1.
Line 12. Accumulated Pre-1985 DISC Income. If the
corporation was a qualified DISC as of December 31, 1984, the
accumulated pre-1985 DISC income will generally be treated as
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

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previously taxed income (exempt from tax) when distributed to
DISC shareholders after December 31, 1984.
Exception. The exemption does not apply to distributions of
accumulated pre-1985 DISC income of an IC-DISC or former
DISC that was made taxable under section 995(b)(2) because of
a prior revocation of the DISC election or disqualification of the
DISC. For more details on these distributions, see Temporary
Regulations section 1.921-1T(a)(7).
Line 13. Accumulated IC-DISC Income. Accumulated
IC-DISC income (for periods after 1984) is accounted for this
line. The balance of this account is used in figuring deferred
DISC income in Part V of Schedule J.

Schedule N—Export Gross Receipts
of the IC-DISC and Related U.S.
Persons
Line 1. Product Code and Percentage. Enter on line 1a the
code number and percentage of total export gross receipts
(defined under Line 2, Export gross receipts for the current tax
year, later) for the product or service that accounts for the largest
portion of the IC-DISC's export gross receipts. The product
codes are at the end of these instructions. On line 1b, enter the
same information for the IC-DISC's next largest product or
service.
Example. An IC-DISC has export gross receipts of $10
million. Selling agricultural chemicals accounts for $4.5 million
(45% (0.45)) of that amount, which is the IC-DISC's largest
product or service. The IC-DISC should enter “287” (the product
code for agricultural chemicals) and “45%” on line 1a.
Selling industrial chemicals accounts for $2 million (20%
(0.20) of the $10 million total) and is the IC-DISC's
second-largest product or service. The IC-DISC should enter
“281” (the product code for industrial inorganic and organic
chemicals) and “20%” on line 1b.
Line 2. Export gross receipts for the current tax year.
Export gross receipts are receipts from any of the following.
• Providing engineering or architectural services for
construction projects located outside the United States.
• Selling for direct use, consumption, or disposition outside the
United States, property (such as inventory) produced in the
United States.
• Renting this property to unrelated persons for use outside the
United States.
• Providing services involved in such a sale or rental.
• Providing export management services.
For commission sales, export gross receipts include the total
receipts on which the IC-DISC earned the commission.
For purposes of line 2, Schedule N only, no reduction is to be
made for receipts attributable to military property. Therefore, an
IC-DISC's export gross receipts for purposes of line 2 include the
total of the amounts from Schedule B, columns (b) and (d) of
lines 1c, 2a, 2b, 2c, and 2d.
Related persons are:
• An individual, partnership, estate, or trust that controls the
IC-DISC;
• A corporation that controls the IC-DISC or is controlled by it;
or
• A corporation controlled by the same person or persons who
control the IC-DISC.
Control means direct or indirect ownership of more than 50%
of the total voting power of all classes of stock entitled to vote.
See section 993(a)(3).
U.S. person is:
Instructions for Form 1120-IC-DISC (Rev. 12-2024)

• A citizen or resident of the United States, which includes the
Commonwealth of Puerto Rico and other territories of the United
States;
• A domestic corporation or partnership; or
• An estate or trust (other than a foreign estate or trust as
defined in section 7701(a)(31)).
Column (a). Export gross receipts of the IC-DISC. All
IC-DISCs should complete column (a) in line 2. If two or more
IC-DISCs are related persons, only the IC-DISC with the largest
export gross receipts should complete columns (b) and (c). If an
IC-DISC acts as a commission agent for a related person,
attribute the total amount of the transaction to the IC-DISC.
Complete column (a) to report the IC-DISC's export gross
receipts from all sources (including the United States) for the
current tax year.
Column (b). Related IC-DISCs. Complete column (b) to report
related IC-DISCs' export gross receipts from all sources
(including the United States).
Column (c). All other related U.S. persons. Complete
column (c) to report other related U.S. persons' export gross
receipts from all sources except the United States.
Line 3. Related U.S. Persons. Enter on line 3 the name,
address, and identifying number of related U.S. persons in your
controlled group.

Schedule O—Other Information
Question 6. Boycott of Israel. If question 6a, 6b, or 6c is
checked “Yes,” the IC-DISC must file Form 5713 and is also
deemed to distribute part of its income. See Form 5713 for more
information.
Question 7. Limitation on business interest expense. For
tax years beginning after 2017, the limitation on business
interest expense applies to every taxpayer with a trade or
business, unless the taxpayer meets certain specified
exceptions. A taxpayer may elect out of the limitation for certain
businesses otherwise subject to the business interest expense
limitation.
Certain real property trades or businesses and farming
businesses qualify to make an election not to limit business
interest expense. This is an irrevocable election. If you make this
election, you are required to use the alternative depreciation
system to depreciate any property with a recovery period of 10
years or more. Also, you are not entitled to the special
depreciation allowance for that property. For a taxpayer with
more than one qualifying business, the election is made with
respect to each business.
Check “Yes” if the taxpayer has an election in effect to
exclude a real property trade or business or a farming business
from section 163(j). For more information, see section 163(j) and
the Instructions for Form 8990.
Question 8. Form 8990. Generally, a taxpayer with a trade or
business must file Form 8990, Limitation on Business Interest
Expense Under Section 163(j), to claim a deduction for business
interest. In addition, Form 8990 must be filed by any taxpayer
that owns an interest in a partnership with current year, or prior
year carryover, excess business interest expense allocated from
the partnership.
Exclusions from filing. A taxpayer is not required to file
Form 8990 if the taxpayer is a small business taxpayer and does
not have excess business interest expense from a partnership. A
taxpayer is also not required to file Form 8990 if the taxpayer
only has business interest expense from these excepted trades
or businesses:
• An electing real property trade or business,
• An electing farming business, or
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• Certain utility businesses.

Small business taxpayer. A small business taxpayer is not
subject to the business interest expense limitation and is not
required to file Form 8990. A small business taxpayer is a
taxpayer that (a) is not a tax shelter (as defined in section 448(d)
(3)), and (b) meets the gross receipts test of section 448(c),
discussed next.
Gross receipts test. A taxpayer meets the gross receipts
test if the taxpayer has average annual gross receipts of the
annual threshold amount listed in section 3.31 of the Revenue
Procedure for the tax year of the return being filed or less for the
3 prior tax years. A taxpayer's average annual gross receipts for
the 3 prior tax years is determined by adding the gross receipts
for the 3 prior tax years and dividing the total by 3. Gross
receipts include the aggregate gross receipts from all persons
treated as a single employer, such as a controlled group of
corporations, commonly controlled partnerships, or
proprietorships, and affiliated service groups. See section 448(c)
and the Instructions for Form 8990 for additional information.
Question 9. Tax-exempt interest. Report any tax-exempt
interest received or accrued. Include any exempt-interest

dividends received as a shareholder in a mutual fund or other
RIC.
Question 10. Foreign owner. If the answer to question 10(a) or
10(b) is "Yes," enter on line 10(b)a the percentage owned. On
line 10(b)b, enter the owner's country, and on line 10(b)c, if Form
5472, Information Return of a 25% Foreign-Owned U.S.
Corporation Engaged in a U.S. Trade or Business, is filed by the
corporation, enter the number of Forms 5472 attached.

Schedule P (Form
1120-IC-DISC)—Intercompany
Transfer Price or Commission

Complete and attach a separate Schedule P (Form
1120-IC-DISC) for each transaction or group of transactions to
which you apply the intercompany pricing rules of section 994(a)
(1) and (2).
For more information, see the instructions for Schedule P
(Form 1120-IC-DISC).

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United
States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to
figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,
as required by section 6103.
The time needed to complete and file Form 1120-IC-DISC, Schedule K (Form 1120-IC-DISC), and Schedule P (Form
1120-IC-DISC), will vary depending on individual circumstances. The estimated burden for business taxpayers filing these forms is
approved under OMB control number 1545-0123.
If you have comments concerning the accuracy of these time estimates or suggestions for making these forms simpler, we would be
happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to: Internal Revenue Service,
Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Don't send the tax forms to this address.
Instead, see Where To File, earlier, near the beginning of these instructions.

16

Instructions for Form 1120-IC-DISC (Rev. 12-2024)

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Form 1120-IC-DISC Codes for Principal Business Activity
This list of principal business activities and their associated codes is
designed to classify an enterprise by the type of activity in which it is
engaged to facilitate the administration of the Internal Revenue
Code. These principal business activity codes are based on the
North American Industry Classification System. Certain activities,
such as manufacturing, do not apply to an IC-DISC.
Using the list below, enter on page 1, item B, the code number for
the specific industry group from which the largest percentage of

Wholesale Trade

Code

Code

424210 Drugs & Druggists’ Sundries
424300 Apparel, Piece Goods, &
Notions
424400 Grocery & Related Products
424500 Farm Product Raw Materials
424600 Chemical & Allied Products
424700 Petroleum & Petroleum
Products
424800 Beer, Wine, & Distilled
Alcoholic Beverage
424910 Farm Supplies
424920 Book, Periodical, &
Newspapers
424930 Flower, Nursery Stock, &
Florists’ Supplies
424940 Tobacco & Tobacco Products
424950 Paint, Varnish, & Supplies
424990 Other Miscellaneous
Nondurable Goods

Merchandise Wholesalers, Durable
Goods
423100 Motor Vehicle & Motor
Vehicle Parts & Supplies
423200 Furniture & Home Furnishings
423300 Lumber & Other Construction
Materials
423400 Professional & Commercial
Equipment & Supplies
423500 Metal & Mineral (except
Petroleum)
423600 Household Appliances &
Electrical & Electronic Goods
423700 Hardware, Plumbing &
Heating Equipment, & Supplies
423800 Machinery, Equipment, &
Supplies
423910 Sporting & Recreational Goods
& Supplies
423920 Toy & Hobby Goods & Supplies
423930 Recyclable Materials
423940 Jewelry, Watch, Precious
Stone, & Precious Metals
423990 Other Miscellaneous Durable
Goods
Merchandise Wholesalers,
Nondurable Goods
424100 Paper & Paper Products

Information
Publishing Industries (except
Internet)
511110 Newspaper Publishers
511120 Periodical Publishers
511130 Book Publishers
511140 Directory & Mailing List
Publishers
511190 Other Publishers
511210 Software Publishers

total gross receipts is derived. Total receipts means all income (line
1, page 1).
On page 6, Schedule O, line 1, enter the principal business activity
and principal product or service that account for the largest
percentage of total receipts. For example, if the principal activity is
“Wholesale Trade Durable Goods: Machinery, Equipment, &
Supplies,” the principal product or service may be “Engines and
Turbines.”
Code

Motion Picture and Sound
Recording Industries
512100 Motion Picture & Video
Industries (except video
rental)
512200 Sound Recording Industries
Broadcasting (except Internet)
515100 Radio & Television
Broadcasting
515210 Cable & Other Subscription
Programming
Telecommunications
517000 Telecommunications
(including paging, cellular,
satellite, cable & other
program distribution,
resellers, other
telecommunications, &
internet service providers)
Data Processing Services
518210 Data Processing, Hosting, &
Related Services
Other Information Services
519100 Other Information Services
(including news syndicates,
libraries, internet publishing &
broadcasting)

Rental and Leasing
Code

Rental and Leasing Services
532100 Automotive Equipment Rental
& Leasing
532210 Consumer Electronics &
Appliances Rental
532281 Formal Wear & Costume
Rental
532282 Video Tape & Disc Rental
532283 Home Health Equipment
Rental
532284 Recreational Goods Rental
532289 All Other Consumer Goods
Rental
532310 General Rental Centers
532400 Commercial & Industrial
Machinery & Equipment
Rental & Leasing

Professional Services
Architectural, Engineering, and
Related Services
541310 Architectural Services
541320 Landscape Architecture
Services
541330 Engineering Services
541340 Drafting Services
541350 Building Inspection Services
541360 Geophysical Surveying &
Mapping Services
541370 Surveying & Mapping (except
Geophysical) Services
541380 Testing Laboratories
Other Professional Services
541600 Management, Scientific, &
Technical Consulting Services

Schedule P (Form 1120-IC-DISC) Codes for Principal Business Activity
(These codes are used only with Schedule P (Form 1120-IC-DISC)).
These codes for the Principal Business Activity are designed to
classify enterprises by the type of activity in which they are engaged
to facilitate the administration of the Internal Revenue Code. Certain
activities such as manufacturing do not apply to an IC-DISC.

Transportation,
Communication, Electric,
Gas, and Sanitary Services
Code
Transportation
4400 Water transportation
4700 Other transportation services
Electric, gas, and sanitary services
4910 Electric services
4920 Gas production and distribution
4930 Combination utility services

Wholesale Trade
Durable
5008 Machinery, equipment, and
supplies
5010 Motor vehicles and automotive
equipment
5020 Furniture and home furnishings
5030 Lumber and construction
materials

Code
5040 Sporting, recreational,
photographic, and hobby
goods, toys, and supplies
5050 Metals and minerals, except
petroleum and scrap
5060 Electrical goods
5070 Hardware, plumbing and heating
equipment
5098 Other durable goods
Nondurable
5110 Paper and paper products
5129 Drugs, drug proprietaries, and
druggists’ sundries
5130 Apparel, piece goods, and
notions
5140 Groceries and related products
5150 Farm-product raw materials
5160 Chemicals and allied products
5170 Petroleum and petroleum
products
5180 Alcoholic beverages
5190 Miscellaneous nondurable
goods

Using the list below, enter the code for the specific industry group
and product or product line for each Schedule P completed.

Retail Trade
Code
Building materials, hardware, garden
supply, mobile home dealers,
general merchandise, and food
stores
5220 Building materials dealers
5251 Hardware stores
5265 Garden supplies and mobile
home dealers
5300 General merchandise stores
5410 Grocery stores
5490 Other food stores
Automotive dealers and service
stations
5515 Motor vehicle dealers
5541 Gasoline service stations
5598 Other automotive dealers
5600 Apparel and accessory stores
5700 Furniture and home furnishings
stores
5800 Eating and drinking places
Miscellaneous retail stores
5912 Drug stores and proprietary
stores
5921 Liquor stores
5995 Other miscellaneous retail stores

Finance, Insurance, and Real
Estate
Code
Credit agencies other than banks
6199 Other credit agencies

Services
Business services
7389 Export management services
Auto repair and services;
miscellaneous repair services
7500 Lease or rental of motor
vehicles
Amusement and recreation services
7812 Motion picture production,
distribution, and services
Other services
8911 Architectural and engineering
services
8930 Accounting, auditing, and
bookkeeping
8980 Miscellaneous services

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Schedule N Product Code System
(These codes are used only with Schedule N, page 6, Form 1120-IC-DISC.)
Using the list below, enter on line 1 of Schedule N the product code number and percent of export gross receipts as explained in
the Specific Instructions.
This product code system is divided into two categories—nonmanufactured product groups and services, and manufactured
product groups.
Code

Code

Code

Nonmanufactured Product Groups and Services

Furniture and fixtures

Fabricated metal products (except ordnance,
machinery and transportation)

011
012
013
014
015
019
021
022
023
024
029
101
102
103
110
130
147
148
730
737
780
850
988
990

Grains, including soybeans
Vegetables and melons
Fruit and tree nuts
Greenhouse, nursery, and floriculture
Cotton
Other crops (including sugar beets, peanuts,
spices, hops, and vegetable seeds)
Livestock
Poultry and eggs
Fishery products and services (including shellfish)
Fur bearing animals and unfinished hides
Other animal products
Iron ores
Precious metals (including gold and silver)
Other ores
Coal mining products
Secondary petroleum and natural gas products
Nonmetallic mineral products and services
(including limestone, sulfur, and fertilizer)
Sand, gravel, and clay
Export management services
Computer software
Motion picture distribution
Engineering and architectural services
Leasing--other property (except aircraft)
Other nonmanufactured products

Manufactured Product Groups
Ordnance and accessories
191
192
194
195
196
199

Guns, howitzers, mortars, and related equipment
Ammunition (except small arms)
Sighting and fire control equipment
Small arms
Small arms ammunition
Other ordnance and accessories

Food and kindred products
201
202
203
204
205
206
207
208
209

Meat products
Dairy products
Fruits, vegetables, and seafood
Grain mill products
Bakery products
Sugar
Confectionery and related products
Beverages
Other food and kindred products

Tobacco products
211
212
213

Cigarettes
Cigars
Tobacco (chewing and smoking) and snuff

Textile mill products
221
222
223
224
225
226
227
228
229

Broad woven cotton fabrics
Broad woven synthetic fibers and silk fabrics
Broad woven wool fabrics
Narrow fabrics
Knit fabrics
Dyed and finished textiles
Carpets and rugs
Yarns and threads
Other textile goods

Apparel and other finished goods
231
233
238
239

Men’s and boys’ clothing and furnishings
Women’s, children’s, and infants’ clothing and
accessories (including fur goods and millinery)
Footwear (except rubber and leather)
Other apparel and accessories

Lumber and wood products (except furniture)
241
243
244
249

Logs and log products
Lumber construction materials (including
millwork, veneer, plywood and prefabricated
structural wood products)
Wooden containers
Other lumber and wood products

18

251
252
253
259

Household furniture
Office furniture
Public building and related furniture
Other furniture and fixtures

Paper and allied products
261
262
263
264
265
266
269

Pulp
Newsprint
Business machine paper
Stationery and office supplies (including pens
and pencils)
Paperboard (including containers and boxes)
Paper bags and coated and treated paper
(including wallpaper and gift wrap)
Other paper and allied products

Printed media
271
272
273
274
275
279

Newspapers
Periodicals
Books
Greeting cards
Manifold business forms
Other printed media

Chemicals and allied products
281
282
283
284
285
286
287
289

Industrial inorganic and organic chemicals
Plastics materials, synthetic resins, synthetic
rubber, and synthetic fibers
Drugs
Soap, detergents, and cleaning preparations,
perfumes, cosmetics, and toiletries
Paints, varnishes, lacquers, enamels, and allied
products
Gum and wood chemicals
Agricultural chemicals
Other chemicals and allied products

Refined petroleum and related products
291
295
299

Refined petroleum
Paving and roofing materials
Other petroleum and related products

Rubber and plastics products
Tires and inner tubes
Rubber footwear
Reclaimed rubber
Fabricated rubber products
Other rubber and plastics products

301
302
303
306
309

Leather and leather products
311
312
313
314
315
316
317
319

Tanned and finished leather
Industrial leather belting and packing
Boot and shoe cut stock and findings
Leather footwear
Leather gloves and mittens
Leather luggage
Leather handbags and other personal leather
goods
Other leather and leather products

Stone, clay, glass, and concrete products
321
322
323
324
325
326
327
328
329

Flat glass
Glass and glassware, pressed and blown
Glass products, made or purchased glass
Cement, hydraulic
Structural clay products
Pottery and related products
Concrete, gypsum, and plaster products
Cut stone and stone products
Abrasive, asbestos, and other nonmetallic mineral
products

Primary and secondary nonfabricated metal products
Iron and steel products
331
Nonferrous metal products
332
Other primary and secondary nonfabricated metal
339
products

341
342
343
344
345
346
347
349

Metal cans
Cutlery, hand tools, and general hardware
Heating apparatus (except electric) and plumbing
fixtures
Fabricated structural metal products
Screw machine products and bolts, nuts, screws,
rivets, and washers
Metal stampings
Coated and engraved metal products
Other fabricated metal products

Machinery (except electrical and electronic)
351
352
353
354
355
356
357
359

Engines and turbines
Farm machinery and equipment
Construction, mining, and materials handling
machinery and equipment
Metalworking machinery and equipment
Special industry machinery (except metalworking
machinery)
General industrial machinery and equipment
Service industry machinery
Other machinery (except electrical and electronic)

Electrical and electronic machinery, equipment, and
supplies
361
362
363
364
365
366
367
368
369

Electric power transmission and distribution
equipment (including transformers, motors and
generators)
Electrical office equipment (including
photocopying machines and calculators)
Household appliances
Electric lighting and wiring equipment
Audio and video equipment (except
communication types)
Communication equipment
Semiconductors, capacitors, resistors, and other
electronic components
Computer and peripheral equipment
Other electrical and electronic machinery,
equipment, and supplies

Transportation equipment
371
372
373
374
375
376
378
379

Motor vehicles and motor vehicle equipment
Aircraft and aircraft parts and equipment
Leased aircraft
Ships and nautical equipment
Railroad equipment
Motorcycles, bicycles, and parts
Tanks and tank components
Other transportation equipment

Professional, scientific, and controlling instruments;
photographic and optical goods; watches and clocks
381
382
383
384
385
386
387

Engineering, laboratory, and scientific and
research instruments and associated equipment
Instruments for measuring, controlling, and
indicating physical characteristics
Optical instruments, lenses, binoculars,
microscopes, telescopes, and prisms
Surgical, medical, and dental instruments and
supplies
Ophthalmic goods
Photographic equipment and supplies
Watches and clocks

Other manufactured products
391
393
394
395
396
399

Jewelry, silverware, and plated ware
Musical instruments
Toys, amusement, sporting, and athletic goods
Artists’ materials
Costume jewelry, costume novelties, buttons,
and other notions (except precious metal)
Other manufactured products