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                                                                                                               Department of the Treasury
                                                                                                               Internal Revenue Service
Instructions for Form 

1120-FSC

(Rev. January 2024)
U.S. Income Tax Return of a Foreign Sales Corporation

Section references are to the Internal Revenue Code calculate CAMT if applicable. See the           FSC Repeal and 
unless otherwise noted.                             instructions for Schedule J, line 4.
Contents                                      Page                                                  Extraterritorial Income 
General Instructions .  . . . . . . . . . . . . 1   Photographs of Missing                          Exclusion
Purpose of Form .         . . . . . . . . . . . 1   Children                                        In general, the FSC Repeal and 
FSC Repeal and                                      The Internal Revenue Service is a proud         Extraterritorial Income Exclusion Act of 2000:
Extraterritorial Income                             partner with the National Center for Missing    • Repealed the FSC rules;
Exclusion    . . . . . . . . . . . . . . 1          & Exploited Children® (NCMEC).                  • Provided taxpayers with an exclusion, 
Pre-Repeal FSC Rules .            . . . . . . . 2   Photographs of missing children selected by     which is figured on Form 8873, 
Who Must File           . . . . . . . . . . . . . 3 the Center may appear on pages that would       Extraterritorial Income Exclusion; and
When To File .          . . . . . . . . . . . . . 3 otherwise be blank. You can help bring these    • Provided transition rules for existing 
Where To File .         . . . . . . . . . . . . . 4 children home by looking at the photographs     FSCs. These rules are included in Rules for 
                                                    and calling 1-800-THE-LOST                      Existing FSCs below.
Who Must Sign .         . . . . . . . . . . . . 4   (1-800-843-5678) if you recognize a child.      Note. The American Jobs Creation Act of 
Paid Preparer Authorization .            . . . . 4
Other Forms That May Be                                                                             2004 repealed the extraterritorial income 
Required .   . . . . . . . . . . . . . . 4          The Taxpayer Advocate                           exclusion provisions generally for 
Assembling the Return .           . . . . . . . 4   Service                                         transactions after 2004, subject to a 
Accounting Methods .            . . . . . . . . 4   The Taxpayer Advocate Service (TAS) is an       transition rule. See the Instructions for Form 
Accounting Period .         . . . . . . . . . . 5   independent organization within the IRS         8873 for more information.
Recordkeeping .         . . . . . . . . . . . . 5   that helps taxpayers and protects taxpayer        The Tax Increase Prevention and 
                                                    rights. TAS’s job is to ensure that every       Reconciliation Act of 2005 repealed the FSC 
Tax Payments .          . . . . . . . . . . . . . 5 taxpayer is treated fairly and knows and        binding contract exception. See Binding 
Estimated Tax Payments .            . . . . . . 6   understands their rights under the Taxpayer     contract exception below for details.
Interest and Penalties .        . . . . . . . . 6   Bill of Rights.
Rounding Off to Whole Dollars .       . . . . . 5                                                   Rules for Existing FSCs
Specific Instructions . . . . . . . . . . . . . 6     As a taxpayer, the corporation has rights     In general, a FSC that was in existence on 
                                                    that the IRS must abide by in its dealings      September 30, 2000, and at all times 
FSC Information .         . . . . . . . . . . . 6   with the corporation. TAS can help the          thereafter may continue to use the FSC rules 
Tax and Payments .          . . . . . . . . . . 7   corporation if:                                 for any transaction in the ordinary course of 
Schedule A . . . . . . . . . . . . . . . 7          • A problem is causing financial difficulty for business that is (a) before January 1, 2002, 
Additional Information          . . . . . . . . 8   the business.                                   or (b) after December 31, 2001, if such 
Schedule B . . . . . . . . . . . . . . . 8          • The business is facing an immediate           transaction is pursuant to a binding contract 
Schedule E . . . . . . . . . . . . . . . 9          threat of adverse action, or                    that meets the requirements described in 
Schedule F . . . . . . . . . . . . . . . 9          • The corporation has tried repeatedly to       Binding contract exception below.
                                                    contact the IRS but no one has responded, 
Schedule G . . . . . . . . . . . . . .          10  or the IRS hasn't responded by the date         Binding contract exception.    The binding 
Schedule J   . . . . . . . . . . . . . .        11  promised.                                       contract exception has been repealed for tax 
Schedule L   . . . . . . . . . . . . . .        12                                                  years beginning after May 17, 2006. For tax 
Schedule M-1 .          . . . . . . . . . . . . 12    TAS has offices in every state, the District  years beginning before May 18, 2006, the 
                                                    of Columbia, and Puerto Rico. Local             following rules apply: The transaction must 
                                                    advocates' numbers are in their local           be pursuant to a binding contract between 
Future Developments                                 directories and at                              the FSC (or a person related to the FSC) and 
For the latest information about                    TaxpayerAdvocate.IRS.gov. The corporation       a person other than a related person if that 
developments related to Form 1120-FSC               can also call TAS at 1-877-777-4778.            binding contract was in effect on September 
and its instructions, such as legislation             TAS also works to resolve large-scale or      30, 2000, and has remained in effect. A 
enacted after they were published, go to            systemic problems that affect many              binding contract includes a purchase, 
IRS.gov/Form1120FSC.                                taxpayers. If the corporation knows of one of   renewal, or replacement option that is 
                                                    these broad issues, please report it to TAS     enforceable against a lessor or seller 
What's New                                          through the Systemic Advocacy                   (provided the option is part of a contract that 
                                                    Management System at IRS.gov/SAMS.              is binding and in effect on September 30, 
Increase in penalty for failure to file.      For                                                   2000, and has remained in effect).
tax returns required to be filed in 2024, the         For more information, go to IRS.gov/
minimum penalty for failure to file a return        Advocate.                                         The mere entering into of a single 
that is more than 60 days late has increased                                                        transaction, such as a lease, would not, in 
                                                                                                    and of itself, prevent the transaction from 
to the smaller of the tax due or $485. See          General Instructions                            being in the ordinary course of business.
Penalty for late filing of return, later.
Corporate alternative minimum tax 
(CAMT). For tax years beginning after 2022,         Purpose of Form                                 Election To Apply Exclusion Rules
certain corporations must determine whether         Use Form 1120-FSC to report the income, 
they are subject to the new CAMT and                gains, losses, deductions, credits, and to      Taxpayers may elect to apply the 
                                                    figure the income tax liability of a FSC.       extraterritorial income exclusion rules instead 

Jan 24, 2024                                                        Cat. No. 11532V

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of the FSC rules for transactions occurring Pre-Repeal FSC Rules A small FSC is exempt from the foreign
during the transition period. The election is: management and foreign economic process
• Made by checking the box on line 2 of Definition of a Foreign Sales requirements outlined on this page.
Form 8873,
• Made on a transaction-by-transaction Corporation (FSC) $5 million limit. Generally, any foreign
basis, Under section 922(a), a FSC is defined as a trading gross receipts of a small FSC for the
• Effective for the tax year for which it is corporation that has met all of the following tax year that exceed $5 million are not to be
made and for all subsequent tax years, and rules: considered in determining its exempt foreign
• Revocable only with the consent of the 1. It must be a corporation created or trade income. The $5 million limit is reduced
IRS. organized under the laws of a qualifying if the small FSC has a short tax year. It may
foreign country or any U.S. possession other also be reduced if the small FSC is a
Taxpayers use Form 8873 to determine than Puerto Rico. member of a controlled group that contains
other small FSCs. See Regulations section
their extraterritorial income exclusion. Qualifying U.S. possessions include 1.921-2(b) for more information.
Election To Be Treated as a Guam, American Samoa, the
Commonwealth of the Northern Mariana Tax Treatment of a FSC
Domestic Corporation Islands, and the U.S. Virgin Islands. A FSC is not taxed on its exempt foreign
A FSC that was in existence on September A qualifying foreign country is a foreign trade income. Section 923 defines foreign
30, 2000, and at all times thereafter may country that meets the exchange of trade income as the gross income of a FSC
elect to be treated as a domestic corporation information rules of section 927(e)(3)(A) or attributable to foreign trading gross receipts
if substantially all of its gross receipts are (B). All U.S. possessions other than Puerto (defined below).
foreign trading gross receipts. A FSC that Rico are also certified to have met these
elects to be treated as a domestic rules. The percentage of foreign trade income
corporation ceases to be a FSC for any tax exempt from tax is figured differently for
year for which the election applies (and for The following countries are qualifying income determined under the administrative
any subsequent tax year). foreign countries that have met the exchange pricing rules (for details, see the Instructions
of information rules of section 927(e)(3)(A) or for Schedule P (Form 1120-FSC)) and
The election is made by checking the box 927(e)(3)(B): Australia, Austria, Barbados, income determined without regard to the
on line 3 of Form 8873. An electing Belgium, Bermuda, Canada, Costa Rica, administrative pricing rules. These
corporation files Form 1120, U.S. Cyprus, Denmark, Dominica, the Dominican percentages are computed on Schedule E,
Corporation Income Tax Return. Once made, Republic, Egypt, Finland, France, Germany, page 4, Form 1120-FSC, and carried over to
the election applies to the tax year for which Grenada, Guyana, Honduras, Iceland, lines 9a and 9b of Schedule B, page 3, Form
it is made and remains in effect for all Ireland, Jamaica, Korea, Malta, the Marshall 1120-FSC, to figure taxable income or (loss).
subsequent years unless the election is Islands, Mexico, Morocco, the Netherlands,
revoked or terminated. If the election is New Zealand, Norway, Pakistan, Peru, the See section 923(a)(4) for a special rule
revoked or terminated, the corporation would Philippines, St. Lucia, Sweden, and Trinidad for foreign trade income allocable to a
be a foreign corporation that files Form and Tobago. cooperative. See section 923(a)(5) for a
1120-F, U.S. Income Tax Return of a Foreign 2. It had no more than 25 shareholders special rule for military property.
Corporation. Furthermore, the foreign at any time during the tax year. Tax treaty benefits. A FSC may not claim
corporation would not be eligible to reelect to
be treated as a domestic corporation for 5 3. It had no preferred stock outstanding any benefits under any income tax treaty
tax years beginning with the first tax year for at any time during the tax year. between the United States and any foreign
which the original election is not in effect as a 4. During the tax year, the FSC must country.
result of the revocation or termination. maintain: Foreign Trading Gross Receipts
Effect of election. For purposes of section • An office in one of the qualifying foreign
367, a foreign corporation that has elected to countries or U.S. possessions listed above; A FSC is treated as having foreign trading
be a domestic corporation is generally • A set of permanent books of account gross receipts (defined in section 924) only if
treated as transferring, as of the first day of (including invoices) at that office; and it has met certain foreign management and
the first tax year to which the election • The books and records required under foreign economic process requirements.
applies, all of its assets to a domestic section 6001 at a U.S. location to sufficiently Foreign trading gross receipts do not
corporation in an exchange under section establish the amount of gross income, include:
354. deductions, credits, or other matters required • Certain excluded receipts (defined in
to be shown on its tax return. section 924(f)).
FSC Election 5. It must have at least one director, at • Receipts attributable to property excluded
No corporation may elect to be a FSC or a all times during the tax year, who is not a from export property under section 927(a)(2).
small FSC (defined below) after September resident of the United States. • Investment income (defined in section
30, 2000. 6. It must not be a member, at any time 927(c)).
during the tax year, of a controlled group of • Carrying charges (defined in section
Termination of Inactive FSCs which a DISC is a member. 927(d)(1)).
If a FSC has no foreign trade income (see 7. It must have elected to be a FSC or Note. Computer software licensed for
definition under Tax Treatment of a FSC, small FSC, and the election must have been reproduction abroad is not excluded from
later) for any 5 consecutive tax years in effect for the tax year. export property under section 927(a)(2).
beginning after December 31, 2001, the FSC
Therefore, receipts attributable to the sale,
will no longer be treated as a FSC for any tax Small FSC. Section 922(b) defines a small lease, or rental of computer software and
year beginning after that 5-year period. FSC as a corporation that: services related and subsidiary to such
Additional Information • Elected small FSC status and has kept the transactions qualify as foreign trading gross
election in effect for the tax year; and receipts.
For additional information regarding the rules Is not a member, at any time during the
discussed above, see Rev. Proc. 2001-37, •
tax year, of a controlled group that includes a
2001-1 C.B. 1327. FSC (unless that other FSC is also a Foreign Management Rules
small FSC).
A FSC (other than a small FSC) is treated as
having foreign trading gross receipts for the
tax year only if the management of the FSC

2 Instructions for Form 1120-FSC (Rev. 1-2024)

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during the year takes place outside the terms of a transaction, including, but not attributable to activities performed outside
United States. These management activities limited to, price, credit terms, quantity, or time the United States. For purposes of the 50%
include: or manner of delivery. test, foreign direct costs are based on the
• Meetings of the board of directors and 3. Making a contract refers to direct costs of all activities described in all
meetings of the shareholders. performance by the FSC of any of the paragraphs of section 924(e). For purposes
• Disbursing cash, dividends, legal and elements necessary to complete a sale, such of the 85% test, however, foreign direct costs
accounting fees, salaries of officers, and as making or accepting an offer. are determined separately for each
salaries or fees of directors from the principal paragraph of section 924(e).
bank account (see below). Grouping transactions. Generally, the For more details, see Regulations section
• Maintaining the principal bank account at sales activities described above are to be 1.924(d)-1(d).
all times during the tax year. applied on a transaction-by-transaction
basis. However, a FSC may make an annual Check the applicable box(es) on line 10b,
Meetings of directors and meetings of election to apply any of the sales activities on Additional Information, on page 2 of the form,
the shareholders. All meetings of the the basis of a group. To make the election, to indicate how the FSC met the foreign
board of directors of the FSC and all check the applicable box on line 10a, direct costs requirement.
meetings of the shareholders of the FSC that Additional Information, on page 2 of Form Grouping transactions. Generally, the
take place during the tax year must take 1120-FSC. See Regulations section foreign direct cost tests under Regulations
place outside the United States. 1.924(d)-1(c)(5) for details. section 1.924(d)-1(d) are applied on a
In addition, all such meetings must transaction-by-transaction basis. However,
comply with the local laws of the foreign Satisfaction of either the 50% or 85% for-
country or U.S. possession in which the FSC eign direct cost test. To qualify as foreign the FSC may make an annual election (on
was created or organized. The local laws trading gross receipts, the foreign direct line 10d, Additional Information, on page 2 of
determine whether a meeting must be held, costs incurred by the FSC attributable to the the form) to apply the foreign direct cost tests
when and where it must be held (if it is held transaction must equal or exceed 50% of the on a customer, contract, or product or
at all), who must be present, quorum total direct costs incurred by the FSC product line grouping basis. Any grouping
requirements, use of proxies, etc. attributable to the transaction. used must be supported by adequate
documentation of performance of activities
Instead of satisfying the 50% foreign and costs of activities relating to the grouping
Principal bank accounts. See Regulations direct cost test, the FSC may incur foreign used. See Regulations section 1.924(d)-1(e)
section 1.924(c)-1(c) for information direct costs attributable to activities for details.
regarding principal bank accounts. described in each of two of the section
924(e) categories. The costs must equal or Exception for foreign military property.
Foreign Economic Process Rules exceed 85% of the total direct costs incurred The economic process rules do not apply to
by the FSC attributable to the activity any activities performed in connection with
A FSC (other than a small FSC) has foreign described in each of the two categories. If no foreign military sales except those activities
trading gross receipts from any transaction direct costs are incurred by the FSC in a described in section 924(e). See Regulations
only if certain economic processes for the particular category, that category is not taken section 1.924(d)-1(f) for details.
transaction take place outside the United into account for purposes of determining
States. Section 924(d) and Regulations whether the FSC has met either the 50% or Section 925(c) Rule
section 1.924(d)-1 set forth the rules for 85% foreign direct cost test. To use the administrative pricing rules to
determining whether a sufficient amount of Direct costs are costs that: determine the FSC's (or small FSC's) profit
the economic processes of a transaction • Are incident to and necessary for the on a transaction or group of transactions, the
takes place outside the United States. performance of any activity described in FSC must perform (or contract with another
section 924(e); person to perform) all of the economic
Generally, a transaction will qualify if the • Include the cost of materials consumed in process activities relating to the transaction
FSC satisfies two requirements: the performance of the activity and the cost or group of transactions. All of the direct and
• Participation outside the United States in of labor that can be identified or associated indirect expenses relating to the performance
the sales portion of the transaction and directly with the performance of the activity of those activities must be reflected on the
• Satisfaction of either the 50% or the 85% (but only to the extent of wages, salaries, books of the FSC and on Form 1120-FSC.
foreign direct cost test. fees for professional services, and other
amounts paid for services actually rendered, Under Temporary Regulations section
such as bonuses or compensation paid for 1.925(a)-1T(b)(2)(ii), an election may be
The activities comprising these economic services on the basis of a percentage of made to include on the FSC's books all
processes may be performed by the FSC or profits); and expenses, other than cost of goods sold, that
by any other person acting under contract Include the allowable depreciation are necessary to figure combined taxable
with the FSC. •
deduction for equipment or facilities (or the income for the transaction or group of
Participation outside the United States in rental cost for its use) that can be specifically transactions. The expenses must be
the sales portion of the transaction. identified or associated with the activity, as identified on Schedule G on the applicable
Generally, the requirement of section 924(d) well as the contract price of an activity line.
(1)(A) is met for the gross receipts of a FSC performed on behalf of the FSC by a
derived from any transaction if the FSC has contractor. Who Must File
participated outside the United States in the Total direct costs means all of the direct File Form 1120-FSC if the corporation
following sales activities relating to the costs of any transaction attributable to elected to be treated as a FSC or small FSC,
transaction: (1) solicitation (other than activities described in any paragraph of and the election is still in effect.
advertising), (2) negotiation, and (3) making section 924(e). For purposes of the 50% test
a contract. of section 924(d)(1)(B), total direct costs are Note. A FSC that elects to be treated as a
1. Solicitation (other than advertising) is based on the direct costs of all activities domestic corporation under section 943(e)
any communication (including, but not limited described in all paragraphs of section (1) does not file Form 1120-FSC. Instead, it
to, telephone, telegraph, mail, or in person) 924(e). For purposes of the 85% test of files Form 1120.
by the FSC, to a specific, targeted customer section 924(d)(2), however, the total direct
or potential customer. costs are determined separately for each When To File
2. Negotiation is any communication by paragraph of section 924(e). Generally, a corporation must file Form
the FSC to a customer or potential customer Foreign direct costs means the portion 1120-FSC by the 15th day of the 4th month
aimed at an agreement on one or more of the of the total direct costs of any transaction after the end of its tax year. A FSC that has

Instructions for Form 1120-FSC (Rev. 1-2024) 3

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dissolved must generally file by the 15th day   • Include their Preparer Tax Identification       See the Instructions for Form 5471 for 
of the 4th month after the date it dissolved.   Number (PTIN), and                              more information.
   However, a FSC with a fiscal tax year        • Give a copy of the return to the taxpayer.    • Form 5472, Information Return of a 25% 
                                                                                                Foreign-Owned U.S. Corporation or a 
ending June 30 must file by the 15th day of     Note. A paid preparer may sign original or      Foreign Corporation Engaged in a U.S. Trade 
the 3rd month after the end of its tax year. A  amended returns by rubber stamp,                or Business. This form is filed by or for a 
FSC with a short tax year ending anytime in     mechanical device, or computer software         foreign corporation engaged in a U.S. trade 
June will be treated as if the short year       program.                                        or business that had reportable transactions 
ended on June 30, and must file by the 15th                                                     with a related party. See the Instructions for 
day of the 3rd month after the end of its tax                                                   Form 5472 for filing instructions and 
year.                                           Paid Preparer 
                                                                                                information about penalties.
   If the due date falls on a Saturday,         Authorization                                   • Form 5713, International Boycott Report. 
Sunday, or legal holiday, the corporation can   If the FSC wants to allow the IRS to discuss    FSCs that had operations in, or related to, 
file on the next business day.                  its tax return with the paid preparer who       certain “boycotting” countries file
                                                signed it, check the “Yes” box in the signature Form 5713.
Private delivery services.   FSCs can use       area of the return. This authorization applies  • Form 8275, Disclosure Statement, and 
certain private delivery services (PDS)         only to the individual whose signature          Form 8275-R, Regulation Disclosure 
designated by the IRS to meet the “timely       appears in the “Paid Preparer Use Only”         Statement. Use these forms to disclose 
mailing as timely filing” rule for tax returns. section of the return. It does not apply to the items or positions taken on a tax return that 
Go to IRS.gov/PDS. The PDS can tell you         firm, if any, shown in that section.            are not otherwise adequately disclosed on a 
how to get written proof of the mailing date.                                                   tax return or that are contrary to Treasury 
                                                  If the “Yes” box is checked, the FSC is 
   For the IRS mailing address to use if        authorizing the IRS to call the paid preparer   regulations (to avoid parts of the 
you’re using PDS, go to IRS.gov/                to answer any questions that may arise          accuracy-related penalty or certain preparer 
PDSstreetAddresses.                             during the processing of its return. The FSC    penalties).
        Private delivery services cannot        is also authorizing the paid preparer to:       • Form 8300, Report of Cash Payments 
  !     deliver items to P.O. boxes. You must   • Give the IRS any information that is          Over $10,000 Received in a Trade or 
CAUTION use the U.S. Postal Service to mail     missing from the return;                        Business. Use this form to report the receipt 
any item to an IRS P.O. box address.            • Call the IRS for information about the        of more than $10,000 in cash or foreign 
                                                processing of the return or the status of any   currency in one transaction or a series of 
Extension of time to file.   A FSC must File    related refund or payment(s); and               related transactions.
Form 7004, Application for Automatic            • Respond to certain IRS notices about 
Extension of Time To File Certain Business      math errors, offsets, and return preparation.   Assembling the Return
Income Tax, Information, and Other Returns,       The FSC is not authorizing the paid           To ensure that the FSC's tax return is 
by the return due date specified earlier, to    preparer to receive any refund check, bind      correctly processed, attach all schedules 
request an extension of time to file. See the   the FSC to anything (including any additional   and other forms after page 6 of Form 
Instructions for Form 7004 for additional       tax liability), or otherwise represent the FSC  1120-FSC, in the following order:
information.                                    before the IRS.                                   1. Form 4136.
                                                  The authorization will automatically end        2. Additional schedules in alphabetical 
Where To File                                   no later than the due date (excluding           order.
File Form 1120-FSC with the:                    extensions) for filing the FSC's tax return. If   3. Additional forms in numerical order.
Internal Revenue Service Center                 the FSC wants to expand the paid preparer's 
P.O. Box 409101                                 authorization or revoke the authorization         4. Supporting statements and 
Ogden, UT 84409                                 before it ends, see Pub. 947, Practice Before   attachments.
                                                the IRS and Power of Attorney.
Who Must Sign                                                                                     Complete every applicable entry space 
The return must be signed and dated by:         Other Forms That May Be                         on Form 1120-FSC. Do not enter “See 
• The president, vice president, treasurer,                                                     Attached” or “Available Upon Request” 
assistant treasurer, chief accounting officer;  Required                                        instead of completing the entry spaces. If 
or                                              The FSC may have to file some of the forms      more space is needed on the forms or 
• Any other corporate officer (such as tax      listed below. See the form for more             schedules, attach separate sheets using the 
officer) authorized to sign.                    information.                                    same size and format as the printed forms.
   If a return is filed on behalf of a FSC by a   For a list of additional forms the FSC may 
receiver, trustee, or assignee, the fiduciary   need to file (most notably, forms pertaining to   If there are supporting statements and 
must sign the return, instead of the corporate  the reporting of various types of income, and   attachments, arrange them in the same order 
officer. Returns and forms signed by a          any related withholding, to U.S. persons,       as the schedules or forms they support and 
receiver or trustee in bankruptcy on behalf of  foreign persons, and the IRS), see Pub. 542,    attach them last. Show the totals on the 
a FSC must be accompanied by a copy of          Corporations.                                   printed forms. Enter the FSC's name and EIN 
the order or instructions of the court          • Form 5471, Information Return of U.S.         on each supporting statement or attachment.
authorizing signing of the return or form.      Persons With Respect to Certain Foreign 
                                                Corporations. This form may have to be filed    Accounting Methods
Paid Preparer Use Only section.    If an        by certain U.S. officers, directors, or         In general, figure taxable income using the 
employee of the FSC completes Form              shareholders of a FSC to report changes in      method of accounting used in keeping the 
1120-FSC, the paid preparer section should      ownership (see sections 6046 and the            FSC's books and records. In all cases, the 
remain blank. Anyone who prepares Form          related regulations).                           method used must clearly show taxable 
1120-FSC but does not charge the FSC              If a Form 1120-FSC is filed, Form 5471 is     income. Permissible overall methods of 
should not complete that section. Generally,    not required to be filed to satisfy the         accounting include cash, accrual, or any 
anyone who is paid to prepare the return        requirements of section 6038 (see               other method authorized by the Internal 
must sign and complete the section.             Temporary Regulations section 1.921-1T(b)       Revenue Code.
   The paid preparer must complete the          (3)). However, certain U.S. shareholders may 
required preparer information and:              be required to file Form 5471 and the             Generally, the following rules apply. For 
• Sign the return in the space provided for     applicable schedules to report subpart F        more information, see Pub. 538, Accounting 
the preparer's signature.                       income.                                         Periods and Methods.

4                                                                                         Instructions for Form 1120-FSC (Rev. 1-2024)

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• A FSC cannot use the cash method of If the net section 481(a) adjustment is FSCs that do not maintain an office or
accounting unless it is a small business positive, report the ratable portion on Form place of business in the United States can
taxpayer (defined later). A tax shelter 1120-FSC, page 4, Schedule F, line 16, as use the Electronic Federal Tax Payment
(defined in section 448(d)(3)) may never use other income. If the net section 481(a) System (EFTPS) to pay the tax due provided
the cash method. See sections 448(a)(1) adjustment is negative, report the ratable the FSC has a U.S. bank account. If the FSC
through (a)(3). However, see Nonaccrual portion on Form 1120-FSC, page 4, does not have a U.S. bank account, it may
experience method for service providers, Schedule F, line 18, as a deduction. arrange for a financial institution to initiate a
later. same-day payment on its behalf or it can
• Unless it is a small business taxpayer Accounting Period arrange for a qualified intermediary, tax
(defined below), a FSC must use an accrual A FSC must figure its taxable income on the professional, payroll service, or other trusted
method for sales and purchases of inventory basis of a tax year. A tax year is the annual third party to make a deposit on its behalf
items. See the instructions for Form 1125-A. accounting period a FSC uses to keep its using a master account. In addition, the FSC
• A corporation engaged in farming must records and report its income and expenses. still has the option to pay by check or money
use an accrual method. For exceptions, see Generally, FSCs may use a calendar year or order, payable to “United States Treasury.” To
section 447 and Pub. 225. a fiscal year. Personal service corporations, help ensure proper crediting, write the FSC's
• Special rules apply to long-term contracts. however, must generally use a calendar year. EIN, “Form 1120-FSC,” and the tax period to
See section 460. which the payment applies on the check or
Small business taxpayer. For tax years Note. The tax year of a FSC must be the money order. Enclose the payment when
beginning in 2023, a FSC qualifies as a small same as the tax year of the principal Form 1120-FSC is filed.
business taxpayer if (a) it has average annual shareholder which, at the beginning of the FSCs that do maintain an office or place
gross receipts of $29 million or less for the 3 FSC tax year, has the highest percentage of of business in the United States must pay the
prior tax years, and (b) is not a tax shelter (as voting power. If two or more shareholders tax due by electronic funds transfer. The FSC
defined in section 448(d)(3)). have the highest percentage of voting power, can pay the tax using EFTPS or it can
A small business taxpayer can account the FSC must have a tax year that conforms arrange for its tax professional, financial
for inventory by (a) treating the inventory as to the tax year of any such shareholder. See institution, payroll service, or other trusted
non-incidental materials and supplies, or (b) section 441(h). third party to make deposits on its behalf. In
conforming to its treatment of inventory in an addition, the FSC also has the option to
applicable financial statement (as defined in Rounding Off to Whole arrange for its financial institution to initiate a
same-day payment.
section 451(b)(3)). If it does not have an Dollars
applicable financial statement, it can use the The FSC may enter decimal points and cents Note. If the due date falls on a Saturday,
method of accounting used in its books and when completing its return. However, the Sunday, or legal holiday, the payment is due
records prepared according to its accounting corporation should round off cents to whole on the next day that isn't a Saturday, Sunday,
procedures. dollars on its return, forms, and schedules to or legal holiday.
Change in accounting method. Generally, make completing its return easier. The
an FSC must get IRS consent to change corporation must either round off all amounts Electronic Deposit Requirement
either an overall method of accounting or the on its return to whole dollars or use cents for FSCs with an office or place of business in
accounting treatment of any material item for all amounts. To round, drop amounts under the United States must use electronic funds
income tax purposes. To obtain consent, the 50 cents and increase amounts from 50 to 99 transfers to make all federal tax deposits
corporation must generally file Form 3115, cents to the next dollar. For example, $8.40 (such as deposits of employment and
Application for Change in Accounting rounds to $8 and $8.50 rounds to $9. corporate income tax). Generally, electronic
Method, during the tax year for which the funds transfers are made using EFTPS.
change is requested. See the Instructions for If two or more amounts must be added to However, if the corporation does not want to
Form 3115 and Pub. 538 for more figure the amount to enter on a line, include use EFTPS, it can arrange for its tax
information and exceptions. Also see the cents when adding the amounts and round professional, financial institution, payroll
Instructions for Form 3115 for procedures off only the total. service, or other trusted third party to make
that may apply for obtaining automatic deposits on its behalf. Also, it can arrange for
consent to change certain methods of Recordkeeping its financial institution to submit a same-day
accounting, non-automatic change Keep the FSC's records for as long as they payment (discussed below) on its behalf.
procedures, and reduced Form 3115 filing may be needed for the administration of any EFTPS is a free service provided by the
requirements. provision of the Internal Revenue Code. Department of the Treasury. Services
Section 481(a) adjustment. If the Usually, records that support an item of provided by a tax professional, financial
FSC’s taxable income for the current tax year income, deduction, or credit on the return institution, payroll service, or other third party
is figured under a method of accounting must be kept for 3 years from the date the may have a fee.
different from the method used in the return is due or filed, whichever is later. Keep For more information about EFTPS or to
preceding tax year, the corporation may have records that verify the FSC's basis in enroll in EFTPS, visit EFTPS.gov, or call
to make an adjustment under section 481(a) property for as long as they are needed to 1-800-555-4477 (TTY/TDD
to prevent amounts of income or expense figure the basis of the original or replacement 1-800-733-4829).
from being duplicated or omitted. The property.
Depositing on time. For any deposit made
section 481(a) adjustment period is generally The FSC should keep copies of all filed by EFTPS to be on time, the FSC must
1 year for a net negative adjustment and 4 returns. They help in preparing future and submit the deposit by 8 p.m. Eastern time the
years for a net positive adjustment. See the amended returns and in the calculation of day before the date the deposit is due. If the
Instructions for Form 3115. earnings and profits. FSC uses a third party to make deposits on
Exceptions to the general section 481(a) its behalf, they may have different cutoff
adjustment period may apply. Also, in some Tax Payments times.
cases, a corporation can elect to modify the The FSC must pay any tax due in full no later Same-day wire payment option. If the
section 481(a) adjustment period. The than the due date for filing Form 1120-FSC FSC fails to submit a deposit transaction on
corporation may have to complete the (not including extensions). See When To EFTPS by 8 p.m. Eastern time the day before
appropriate lines of Form 3115 to make an File, earlier, for this due date. The method for the date a deposit is due, it can still make the
election. See the Instructions for Form 3115 payment of the tax due depends upon deposit on time by using the Federal Tax
for more information and exceptions. whether the FSC has an office or place of Collection Service (FTCS). To use the
business in the United States. same-day wire payment option, the FSC will

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need to make arrangements with its financial show that the failure to file on time was due street address and the FSC has a P.O. box,
institution ahead of time regarding to reasonable cause. show the box number instead.
availability, deadlines, and costs. Financial If the FSC receives its mail in care of a
institutions may charge a fee for payments If you believe that reasonable cause
third party (such as an accountant or an
information the FSC will need to provide to its CAUTION when you file Form 1120-FSC.
made this way. To learn more about the ! exists, do not attach an explanation attorney), enter “C/O” on the street address
financial institution to make a same-day wire Instead, if the FSC receives a penalty notice line followed by the third party's name and
payment, go to IRS.gov/SameDayWire. after the return is filed, send the IRS an street address or P.O. box.
explanation at that time and the IRS will Item A. Foreign country or U.S. posses-
determine if the FSC meets sion of incorporation. See Definition of a
Estimated Tax Payments reasonable-cause criteria. Foreign Sales Corporation (FSC), earlier.
Generally, the following rules apply to the
FSC's payments of estimated tax. Penalty for late payment of tax. A FSC Item E. Total assets. Enter the FSC's total
that does not pay the tax when due generally assets (as determined by the accounting
• The FSC must make installment payments may be penalized / of 1% of the unpaid tax 1 2 method regularly used in keeping the FSC's
of estimated tax if it expects its total tax for for each month or part of a month the tax is books and records) at the end of the tax year
the year (less applicable credits) to be $500 not paid, up to a maximum of 25% of the from Form 1120-FSC, page 6, Schedule L,
or more. unpaid tax. The penalty will not be imposed if column (d), line 15. If there are no assets at
• The installments are due by the 15th day the FSC can show that the failure to pay on the end of the tax year, enter -0-.
of the 4th, 6th, 9th, and 12th months of the time was due to reasonable cause. See Item F. Final return, name change, ad-
tax year. If any date falls on a Saturday, Caution, above. dress change, or amended return.
Sunday, or legal holiday, the installment is If this is the FSC's final return and it will no
due on the next regular business day. Trust fund recovery penalty. This penalty •
• If the FSC maintains an office or place of may apply if certain income, social security, longer exist, check the “Final return” box.
business in the United States, it must use and Medicare taxes that must be collected or • If the FSC changed its name since it last
electronic funds transfer to make installment withheld are not collected or withheld, or filed a return, check the box for “Name
payments of estimated tax. these taxes are not paid. These taxes are change.” Generally, a FSC must also have
• If the FSC does not maintain an office or generally reported on Form 941, Employer's amended its articles of incorporation and
place of business in the United States, it can QUARTERLY Federal Tax Return, or Form filed the amendment with the jurisdiction in
pay the estimated tax by EFTPS, providing it 945, Annual Return of Withheld Federal which it was incorporated.
has a U.S. bank account. The FSC can also Income Tax. • If the FSC has changed its address since
arrange for its financial institution to submit a The trust fund recovery penalty may be it last filed a return (including a change to an
same-day payment on its behalf or can imposed on all persons who are determined “in care of” address), check the box for
arrange for its qualified intermediary, tax by the IRS to have been responsible for “Address change.”
professional, payroll service, or other trusted collecting, accounting for, or paying over Note. If a change of address or responsible
third party to make a deposit on its behalf these taxes, and who acted willfully in not party occurs after the return is filed, use
using a master account. In addition, the FSC doing so. The penalty is equal to the full Form 8822-B, Change of Address or
still has the option to pay the estimated tax amount of the unpaid trust fund tax. See Pub. Responsible Party - Business, to notify the
due by check or money order. 15 (Circular E), Employer's Tax Guide, for IRS. See the instructions for Form 8822-B for
• Penalties may apply if the corporation details, including the definition of responsible details.
does not make required estimated tax persons. If the FSC is amending its return, check
•
payment deposits. See line 3, Estimated tax Other penalties. Other penalties may be the box for “Amended return.”
penalty, later. imposed for negligence, substantial
• If the FSC overpaid estimated tax, it may understatement of tax, reportable transaction FSC Information
be able to get a quick refund by filing Form understatements, and fraud. See sections
4466, Corporation Application for Quick 6662, 6662A, and 6663. Line 1. Principal shareholder. Complete
Refund of Overpayment of Estimated Tax. lines 1a through 1h for the shareholder
A FSC may also be subject to a penalty
See section 6655 for more information on (under section 6686) of: (individual, corporation, partnership, trust, or
how to figure estimated taxes. • $100 for each failure to supply estate) that was the principal shareholder at
information, up to $25,000 during the the beginning of the FSC's tax year. See the
calendar year. Note under Accounting Period, earlier.
•
Interest and Penalties $1,000 for not filing a return. Foreign address. Enter the information
Interest. Interest is charged on taxes paid The section 6686 penalties will not apply in the following order: city or town, state or
late even if an extension of time to file is if the FSC can show that the failure was due province, country, and foreign postal code.
granted. Interest is also charged on penalties to reasonable cause. However, see Caution, Follow the country's practice for entering the
imposed for failure to file, negligence, fraud, above. name of the state or province and postal
substantial valuation misstatements, code. Do not abbreviate the country name.
substantial understatements of tax, and
Line 2. Parent-subsidiary controlled
reportable transaction understatements from Specific Instructions group. If the FSC is a subsidiary in a
the due date (including extensions) to the
date of payment. The interest charge is Period covered. Enter the FSC ‘s tax year parent-subsidiary controlled group and the
figured at a rate determined under section in the space provided at the top of the form. principal shareholder is not the common
6621. See Accounting Period, earlier. parent of the group, complete lines 2a
through 2g for the common parent. Enter the
Penalty for late filing of return. A FSC Name. Print or type the FSC's true name (as consolidated total assets on line 2d for a
that does not file its tax return by the due set forth in the charter or other legal group that files a consolidated return;
date, including extensions, may be penalized document creating it). otherwise, enter only the common parent's
5% of the unpaid tax for each month or part Address. Enter the U.S. address where the total assets.
of a month the return is late, up to a FSC maintains the records required under
maximum of 25% of the unpaid tax. The section 6001. Include the suite, room, or Note. Check the “Yes” box on line 2 if the
minimum penalty for a tax return required to other unit number after the street address. If FSC is a subsidiary in a parent-subsidiary
be filed in 2024 that is more than 60 days late the post office does not deliver mail to the controlled group. This applies even if the
is the smaller of the tax due or $485. The
penalty will not be imposed if the FSC can

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FSC is a subsidiary member of one group administrative pricing rules. For details on section 263A costs paid or incurred during
and the parent corporation of another. the administrative pricing rules, see the the tax year not includible on lines 2, 3, and
A “parent-subsidiary controlled group” is Instructions for Schedule P (Form 5.
one or more chains of corporations 1120-FSC).
Line 5. Other costs. Enter on line 5 any
connected through stock ownership If the FSC acts as another person's costs paid or incurred during the tax year not
(sections 927(d)(4) and 1563(a)(1)). Both of commission agent on a sale, do not enter entered on lines 2 through 4. Attach a
the following requirements must be met: any amount on Schedule A for the sale. statement listing details of the costs.
1. More than 50% of the total combined Line 7. Inventory at end of year. See
voting power of all classes of stock entitled to Small FSCs will have to make two
vote or more than 50% of the total value of all separate computations for cost of goods sold Regulations sections 1.263A-1 through
classes of stock of each corporation in the if their foreign trading gross receipts exceed 1.263A-3 for details on determining the
group (except the parent) must be owned by the limitation amount on line 6e of amount of additional section 263A costs to
one or more of the other corporations in the Schedule B. In this case, a deduction for cost be included in ending inventory.
group. of goods sold will be figured separately for Lines 9a through 9f. Inventory valuation
the income on line 6h of Schedule B, and methods. Inventories may be valued at:
2. The common parent must own more separately for the income on line 7 of • Cost,
than 50% of the total combined voting power Schedule F. • Cost or market value (whichever is lower),
of all classes of stock entitled to vote or more
than 50% of the total value of all classes of Inventories or
• Any other method approved by the IRS
stock of at least one of the other corporations Generally, unless you are a small business that conforms to the requirements of the
in the group. taxpayer, inventories are required at the applicable regulations.
Stock owned directly by other members beginning and end of each tax year if the
of the group is not counted when computing purchase or sale of merchandise is an FSCs that use erroneous valuation
the voting power or value. income-producing factor. See Regulations methods must change to a method permitted
section 1.471-1. Additionally, if inventories for federal income tax purposes. To make
See sections 927(d)(4) and 1563(d)(1) for are required, you generally must use an this change, use Form 3115. See the
the definition of “stock” for purposes of overall accrual method of accounting. Instructions for Form 3115. Also see Pub.
determining stock ownership above. 538.
If a FSC is a small business taxpayer
Tax and Payments (defined below), it may adopt or change its Line 9a. Method of valuing closing inven-
accounting method to account for inventories tory. On line 9a, check the method(s) used
Line 2h. Backup withholding. If the FSC in the same manner as materials and for valuing inventories. Under lower of cost or
had income tax withheld from any payments supplies that are non-incidental, or conform market, the term “market” (for normal goods)
it received due to backup withholding, to the FSC's treatment of inventories in an means the current bid price prevailing on the
include the amount withheld in the total for applicable financial statement (as defined in inventory valuation date for the particular
line 2h. Show the amount withheld in the section 451(b)(3)), or if the FSC does not merchandise in the volume usually
blank space in the right-hand column have an applicable financial statement, the purchased by the taxpayer. If section 263A
between lines 1 and 2h, and write “backup method of accounting used in the FSC's applies to the taxpayer, the basic elements of
withholding.” books and records prepared in accordance cost must reflect the current bid price of all
with the FSC's accounting procedures. direct costs and all indirect costs properly
Note. Do not include backup withholding Changing an accounting method generally allocable to goods on hand at the inventory
amounts on line 2g. Include on line 2g only requires IRS consent. See the Change in date.
amounts withheld under Chapter 3 or 4 of the accounting method section, earlier. Inventory may be valued below cost when
Code. the merchandise is unsalable at normal
Small business taxpayer. For tax years prices or unusable in the normal way
Line 3. Estimated tax penalty. A FSC that beginning in 2023, a FSC qualifies as a small because the goods are subnormal due to
does not make estimated tax payments business taxpayer if (a) it has average annual damage, imperfections, shop wear, etc. The
when due may be subject to an gross receipts of $29 million or less for the 3 goods may be valued at the bona fide selling
underpayment penalty for the period of prior tax years, and (b) is not a tax shelter (as price, minus direct cost of disposition (but
underpayment. Generally, a FSC is subject to defined in section 448(d)(3)). not less than scrap value). Bona fide selling
the penalty if its tax liability is $500 or more
and it did not timely pay at least the smaller All FSCs should see Section 263A price means actual offering of goods during a
of: uniform capitalization rules in the instructions period ending not later than 30 days after
• Its tax liability for the current year, or for Schedule G, later. See those instructions inventory date.
• Its prior year's tax. before completing Schedule A. Lines 9c and 9d. LIFO method. If this is
Use Form 2220, Underpayment of If the FSC uses intercompany pricing the first year the Last-in, First-out (LIFO)
Estimated Tax by Corporations, to see if the rules (for purchases from a related supplier), inventory method was either adopted or
FSC owes a penalty and to figure the amount use the transfer price figured in Part II of extended to inventory goods not previously
of the penalty. If Form 2220 is completed, Schedule P (Form 1120-FSC). valued under the LIFO method provided in
enter the penalty on line 3, Estimated tax section 472, attach Form 970, Application To
penalty. Line 1. Inventory at beginning of year. If Use LIFO Inventory Method, or a statement
the FSC is changing its method of with the information required by Form 970.
accounting for the current tax year, it must Also check the LIFO box on line 9c. On
Schedule A refigure last year's closing inventory using its line 9d, enter the amount of total closing
Complete Schedule A only for the cost of new method of accounting and enter the inventories computed under section 472.
goods sold deduction related to foreign result on line 1. If there is a difference Estimates are acceptable.
trading gross receipts reported on lines 1 between last year's closing inventory and the
through 5 of Schedule B. refigured amount, attach an explanation and If the FSC changed or extended its
take it into account when figuring the FSC's inventory method to LIFO and had to write up
Complete column (a) to show the cost of section 481(a) adjustment (explained the opening inventory to cost in the year of
goods sold for inventory acquired in earlier). election, report the effect of the write-up as
transactions using the administrative pricing other income (as appropriate on Form
rules. Complete column (b) to show the cost Line 4. Additional section 263A costs. If 1120-FSC, Schedule F, line 16),
of goods sold for inventory acquired in the FSC has elected a simplified method of proportionately over a 3-year period that
transactions that did not use the accounting, enter on line 4 the balance of begins with the year of the LIFO election.

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For more information on inventory Line 10. All FSCs (except small FSCs) must Schedule B.
valuation methods, see Pub. 538. For more answer these questions. On line 10b, Lines 6b through 6h. See section 924(b)
information on changes in the method of indicate how the FSC met the foreign direct (2)(B) for the rules regarding the limitation on
accounting for inventory, see Form 3115 and costs requirement of section 924(d) for all the amount of foreign trading gross receipts
the Instructions for Form 3115. transactions that generated foreign trading that a small FSC can take into account in
gross receipts reported on lines 1 through 5 determining its exempt foreign trade income.
Additional Information of Schedule B. Also, complete line 10a
and/or line 10d to make an election to use Line 6d. Temporary Regulations section
Line 2. Enter any tax-exempt interest either of the annual grouping election(s) 1.921-1T(b)(5) indicates that, in the case of a
received or accrued. Include any indicated. See Foreign Economic Process small FSC having a short tax year, the dollar
exempt-interest dividends received as a Rules, earlier, for details. limitation reported on line 6b or 6c is to be
shareholder in a mutual fund or other prorated on a daily basis. A small FSC
regulated investment company. Also include having a short tax year must divide the
this amount on Schedule M-1, line 7a. Schedule B number of days in its short tax year by the
Use Schedule B to compute taxable income number of days that would have made up a
Line 5. If the FSC owned at least a 10% from all sources. full tax year and enter the resulting fraction
interest, directly or indirectly, in any foreign
partnership, attach a statement listing the Part I on line 6d as a decimal less than 1.00000.
following information for each foreign Use Part I to compute net income attributable Example. For its 2023 calendar year tax
partnership. For this purpose, a foreign to nonexempt foreign trade income. Income year, a small FSC has a short tax year of 73
partnership includes an entity treated as a and expenses on lines 1 through 15 are days. The FSC enters 0.20 (73/365) on
foreign partnership under Regulations reported in column (a) if the administrative line 6d.
section 301.7701-2 or 301.7701-3. pricing rules were used in the transaction Line 6f. If commission income is reported in
1. Name and EIN (if any) of the foreign that produced the income. the total for line 6a of Schedule B, total
partnership; receipts for purposes of line 6f are figured as
2. Identify which, if any, of the following Report in column (b) all foreign trade follows:
forms the foreign partnership filed for its tax income from all transactions in which the
year ending with or within the FSC's tax year: administrative pricing rules were not used.
Form 1042, 1065, or 8804; Attach a statement that shows the 1. Enter total of columns (a) and
computation of the taxable and nontaxable (b), line 6a, Schedule B . . . . 1.
3. Name of the partnership income included on line 15, column (b). 2. Enter total commission income
representative (if any); and Include only the taxable amount on line 16. reported on line 1 and line 2,
Schedule B . . . . . . . . . . . 2.
4. Beginning and ending dates of the Nonaccrual experience method for serv-
foreign partnership's tax year. ice providers. Accrual method FSCs are 3. Subtract line 2 from line 1. . . 3.
Line 6. Generally, if the FSC has a net not required to accrue certain amounts to be 4. With respect to the commission
operating loss (NOL) for the current tax year, received from the performance of services income reported on line 2 above,
it can elect to waive the entire carryback that, based on their experience, will not be enter total gross receipts on the
period for the NOL and instead carry the collected, if: sale, lease, or rental of property
NOL forward to future tax years. To do so, • The services are in the fields of health, on which the commission income
check the box on line 6 and file the tax return law, engineering, architecture, accounting, arose (section 927(b)(2)) . . . 4.
by its due date, including extensions. Do not actuarial science, performing arts, or
attach the statement described in Temporary consulting; or 5. Add lines 3 and 4. Enter here and
Regulations section 301.9100-12T. Generally • The FSC meets the section 448(c) gross on line 6f, Schedule B . . . . . 5.
once made, the election is irrevocable. receipts test for all prior years.
If the FSC timely filed its return for the This provision does not apply to any
loss year without making the election, it can amount if interest is required to be paid on Line 6h. When making the line 6h
make the election on an amended return filed the amount or if there is any penalty for allocation, allocate only the commission
within 6 months of the due date of the loss failure to timely pay the amount. See income from the gross receipts on line 4
year return (excluding extensions). Attach the Regulations section 1.448-3 for more above. If the small FSC's foreign trading
election to the amended return and write information on the nonaccrual experience gross receipts for the tax year (line 6f,
"Filed pursuant to section 301.9100-2" on method, including information on safe harbor Schedule B) exceed its allowable limitation
the election statement. See the Instructions methods. (line 6e, Schedule B), the small FSC may
for Form 1139. FSCs that qualify to use the nonaccrual select the gross receipts to which the
experience method should attach a limitation is allocated. In such a case,
Line 7. Enter the amount of the NOL statement showing total gross receipts, the allocate the amount on line 6g between
carryover to the tax year from prior years, amount not accrued because of the columns (a) and (b) on line 6h based on
even if some of the loss is used to offset application of section 448(d)(5), and the net whether the administrative pricing rules were
income on this return. The amount to enter is amount accrued. Enter the net amount on used for the gross receipts selected. See
the total of all NOLs generated in prior years the applicable line of Schedule B. Regulations section 1.921-2(b), Q&A-4.
but not used to offset income (either as a Part II
carryback or carryover) to a tax year prior to Lines 1 through 5. Enter the foreign trading
the current tax year. Do not reduce the gross receipts requested on lines 1 through Line 19a. Net operating loss deduction.
amount by any NOL deduction reported on 5. See section 924 and Foreign Trading A FSC may use the NOL incurred in one tax
line 19a, Part II, of Schedule B. Gross Receipts, earlier, for receipts that are year to reduce its taxable income in another
excluded and other details. Report tax year. Enter on line 19a the total NOL
Lines 8c and 9b(2). See Definition of a commission income on line 1 or line 2 based carryovers from other tax years, but do not
Foreign Sales Corporation (FSC), earlier, for on the sale, lease, or rental of property on enter more than the FSC's taxable income
definitions of qualifying foreign country and which that commission arose. (after the dividends-received deduction).
U.S. possession.
Line 5. If the 50% gross receipts test of Attach a statement showing the computation
Line 9. All FSCs (except small FSCs) must section 924(a)(5) is not met, report the FSC's of the NOL deduction. Also complete line 7
answer these questions. For more gross receipts that would have otherwise in Additional Information on page 2 of the
information, see Foreign Management Rules, qualified under that section on line 16, form.
earlier. Schedule F, instead of line 5,

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For more details on the NOL deduction, Part II should receive a notice from the RIC
see section 172 and the Instructions for Form specifying the amount of dividends that
1139. Enter the taxable portion of gross income of qualify for the deduction.
the FSC that was not derived from foreign
Line 19b. Dividends-received deduction. trading gross receipts. This type of income Report so-called dividends or earnings
A FSC may be entitled to a deduction for includes: received from mutual savings banks, etc., as
dividends it receives from other corporations. • Small FSCs only. Amounts specifically interest. Do not treat them as dividends.
Complete the worksheet on page 12 using excluded from foreign trade income because
the Instructions for Dividends and of the small FSC limitation (the amount by
Dividends-Received Deduction Worksheet, which line 6f of Schedule B exceeds line 6e Line 2, Column (a)
later. Attach the completed worksheet to of Schedule B). (Enter the excess, if any, on
Form 1120-FSC. line 7 of Schedule F.) Enter dividends (except those received on
Line 20. Taxable income or (loss). If • Investment type income. (Enter on lines 8 certain debt-financed stock acquired after
line 20 is zero or less, the FSC may have an through 12 of Schedule F.) July 18, 1984) that are received from
NOL that may be carried back or forward as • Income from property that is subsidized, 20%-or-more-owned domestic corporations
a deduction to other tax years. deemed in short supply, or destined for use subject to income tax and that are subject to
in the United States. (Enter on lines 13 and the 65% deduction under section 243(c).
Only farming losses can be carried back. 14 of Schedule F.)
The carryback period for these losses is 2 • Amounts from transactions that did not Line 3, Column (a)
years. For NOLs that can be carried back, meet the foreign economic process
the FSC can elect to waive the carryback requirements. (Enter on line 15 of
period and instead carry the NOL forward to Schedule F.) Enter the following.
future tax years. • Other nonforeign trade income. (Enter on • Dividends received on certain
See the instructions for Additional line 16 of Schedule F.) debt-financed stock acquired after July 18,
1984, from domestic and foreign
Information, line 6, earlier, for information on For more details, see sections 924(f) and corporations subject to income tax that
making the election to waive the entire 927(a)(2) and (3). would otherwise be subject to the
carryback period for farming losses. See the dividends-received deduction under section
Instructions for Form 1139 for other special Line 9. See the Dividends and 243(a)(1), 243(c), or 245(a). Generally,
rules and elections. Dividends-Received Deduction Worksheet, debt-financed stock is stock that the FSC
See section 172 for additional later, to figure the total dividends to report on acquired by incurring a debt (for example, it
information. line 9. Attach the completed worksheet to borrowed money to buy the stock).
Form 1120-FSC. Dividends received from a RIC on
•
Schedule E Line 18. Enter the deductions allocated or debt-financed stock. The amount of
For purposes of the Note at the top of apportioned to line 17 income. Attach to dividends eligible for the dividends-received
Schedule E, a C corporation is a corporation Form 1120-FSC a statement listing each deduction is limited by section 854(b). The
other than an S corporation. Shareholders, type of deduction. Show deductions related FSC should receive a notice from the RIC
other than C corporations, are individuals, to cost of goods sold separately. See the specifying the amount of dividends that
partnerships, S corporations, trusts, and instructions for Schedule A, earlier, before qualify for the deduction.
estates. completing this line.
Use lines 2a through 2d to figure the Passive activity limitations. Section 469 Line 3, Columns (b) and (c)
exemption percentage for foreign trade generally limits the deduction of passive
income determined by not using the activity losses for closely held FSCs and Dividends received on certain debt-financed
administrative pricing rules. See section FSCs that are personal service corporations. stock acquired after July 18, 1984, are not
923(a)(2). See section 469 and the Instructions for entitled to the full 50% or 65%
Form 8810 for details. dividends-received deduction under section
Use lines 3a through 3d to figure the 243 or 245(a). The 50% or 65% deduction is
exemption percentage for foreign trade Instructions for Dividends reduced by a percentage that is related to
income that was determined by using the and Dividends-Received the amount of debt incurred to acquire the
administrative pricing rules (see section Deduction Worksheet stock. See section 246A. Also, see section
923(a)(3)). If a qualified cooperative is a 245(a) before making this computation for an
shareholder of the FSC, see section 923(a) For purposes of the 20% ownership test on additional limitation that applies to certain
(4). lines 1 through 7, the percentage of stock dividends received from foreign corporations.
owned by the FSC is based on voting power Attach a statement to Form 1120-FSC
and value of the stock.
Schedule F showing how the amount on line 3, column
(c), was computed.
Part I Line 1, Column (a)
Enter net income from nonexempt foreign Line 4, Column (a)
trade income and related expenses in Part I. Enter dividends (except those received on
certain debt-financed stock acquired after Enter dividends received on the preferred
Line 2. Enter FSC income that resulted from July 18, 1984–see section 246A) that: stock of a less-than-20%-owned public utility
the FSC's cooperation with an international • Are received from less-than-20%-owned that is subject to income tax and is allowed
boycott. See section 927(e)(2) and Form domestic corporations subject to income tax, the 23.3% deduction provided in sections
5713 and related schedules and instructions. and 244 and 247 (as affected by P.L. 113-295,
Line 3. Enter the amount, if any, of illegal • Qualify for the 50% deduction under Div. A, section 221(a)(41)(A), Dec. 19, 2014,
payments, bribes, or kickbacks that the FSC section 243(a)(1). 128 Stat. 4043) for dividends paid.
paid, directly or indirectly, to government
officials, employees, or agents. See section Also include on line 1 dividends (except
927(e)(2). those received on certain debt-financed Line 5, Column (a)
stock acquired after July 18, 1984) from a
Line 5. See the instructions for Schedule A regulated investment company (RIC). The Enter dividends received on preferred stock
before completing this line. amount of dividends eligible for the of a 20%-or-more-owned public utility that is
dividends-received deduction under section subject to income tax and is allowed the
243 is limited by section 854(b). The FSC 26.7% deduction provided in sections 244

Instructions for Form 1120-FSC (Rev. 1-2024) 9

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and 247 (as affected by P.L. 113-295, Div. A, 1. Refigure line 18, Part II, 246(c)(4) and Regulations section 1.246-5
section 221(a)(41)(A), Dec. 19, 2014, 128 Schedule B (page 3 of Form for more details.
Stat. 4043) for dividends paid. 1120-FSC) without any b. Dividends received on any share of
adjustment under section 1059 preferred stock that are attributable to
Line 6, Column (a) and without any capital loss periods totaling more than 366 days if such
carryback to the tax year under stock was held for less than 91 days during
Enter the U.S.-source portion of dividends section 1212(a)(1) . . . . . . . 1. the 181-day period that began 90 days
that: 2. Multiply line 1 by 65% before the ex-dividend date. When counting
• Are received from less-than-20%-owned (0.65) . . . . . . . . . . . . . . 2. the number of days the FSC held the stock,
you may not count certain days during which
foreign corporations, and 3. Add lines 2, 5, and 7, column (c), the FSC's risk of loss was diminished. See
• Qualify for the 50% deduction under and the part of the deduction on section 246(c)(4) and Regulations section
section 245(a). To qualify for the 50% line 3, column (c), that is 1.246-5 for more details. Preferred dividends
deduction, the FSC must own at least 10% of attributable to dividends from attributable to periods totaling less than 367
the stock of the foreign corporation by vote 20%-or-more-owned days are subject to the 46-day holding period
and value. corporations . . . . . . . . . . 3.
rule discussed above.
4. Enter the smaller of line 2 or
Line 7, Column (a) line 3. If line 3 is greater than c. Dividends on any share of stock to
line 2, stop here; enter the the extent the FSC is under an obligation
Enter the U.S.-source portion of dividends amount from line 4 on line 8, (including a short sale) to make related
that are received from 20%-or-more-owned column (c), and do not complete payments with respect to positions in
foreign corporations and that qualify for the lines 5–10 below . . . . . . . . 4. substantially similar or related property.
65% deduction under sections 243 and 5. Enter the total amount of 5. Any other taxable dividend income
245(a). dividends from not properly reported elsewhere on the
20%-or-more-owned Dividends and Dividends-Received
Line 8, Column (c) corporations that are included on Deduction Worksheet.
lines 2, 3, 5, and 7, column If patronage dividends or per-unit retain
Limitation on dividends-received deduc- (a) . . . . . . . . . . . . . . . . 5. allocations are included on line 10, identify
tion. Generally, line 8, column (c), may not 6. Subtract line 5 from line 1 . . . 6. the total of these amounts in a statement
exceed the amount on line 10 of the attached to Form 1120-FSC.
worksheet below. However, in a year in which 7. Multiply line 6 by 50%
an NOL occurs, this limitation does not apply, (0.50) . . . . . . . . . . . . . . 7.
Schedule G
even if the loss is created by the 8. Subtract line 3 above from line 8,
dividends-received deduction. See sections column (c) . . . . . . . . . . . 8. Limitations on Deductions
172(d) and 246(b).
9. Enter the smaller of line 7 or Section 263A uniform capitalization
line 8. . . . . . . . . . . . . . . 9. rules. The uniform capitalization rules of
10. Dividends-received deduction section 263A require FSCs to capitalize
after limitation (sec. 246(b)). certain costs to inventory or other property.
Add lines 4 and 9. Enter the In general, FSCs subject to the section
result here and on line 8, column 263A uniform capitalization rules are
(c) . . . . . . . . . . . . . . . . 10. required to capitalize:
1. Direct costs of property produced or
acquired for resale, and
2. Certain indirect costs (including
Line 10, Column (a) taxes) that are properly allocable to property
produced or property acquired for resale.
Include the following.
Indirect costs properly allocable to
1. Dividends (other than capital gain property acquired for resale are generally
distributions reported on Schedule D (Form those costs in the following categories:
1120) and exempt-interest dividends) that • Off-site storage or warehousing.
are received from RICs and that are not • Purchasing.
subject to the 50% deduction. • Handling, such as processing,
2. Dividends from tax-exempt assembling, repackaging, and transporting.
organizations. • General and administrative costs (mixed
3. Dividends (other than capital gain service costs).
distributions) received from a real estate For details, see Regulations section
investment trust that, for the tax year of the 1.263A-3(d).
trust in which the dividends are paid, In general, the FSC cannot deduct the
qualifies under sections 856 through 860. costs required to be capitalized under
4. Dividends not eligible for a section 263A until it sells, uses, or otherwise
dividends-received deduction, which include disposes of the property (to which the costs
the following. relate). The FSC recovers these costs
a. Dividends received on any share of through depreciation, amortization, or costs
stock held for less than 46 days during the of goods sold.
91-day period beginning 45 days before the
ex-dividend date. When counting the number A small business taxpayer (defined
of days the FSC held the stock, you may not earlier) is not required to capitalize costs
count certain days during which the FSC's under section 263A. A small business
risk of loss was diminished. See section taxpayer that wants to discontinue
capitalizing costs under section 263A must
change its method of accounting. See

10 Instructions for Form 1120-FSC (Rev. 1-2024)

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section 263A(i) and Regulations section contributed under a salary reduction SEP Group. See Schedule O and the Instructions
1.263A-1(j). Also, see the Instructions for agreement or a SIMPLE IRA plan. See the for Schedule O for more information.
Form 3115. Instructions for Form 1125-E for more
For more information on the uniform information on officers' compensation, Line 2
capitalization rules, see Pub. 538. Also, see including any special rules and limitations FSCs, including FSCs that are qualified
Regulations sections 1.263A-1 through that may apply. You are not required to personal service corporations (as defined in
1.263A-3. complete Form 1125-E or attach it to Form section 448(d)(2)), figure their tax by
1120-FSC. multiplying taxable income (Schedule B,
Transactions between related taxpayers. line 20) by 21%. Enter this amount on line 2.
Generally, an accrual basis taxpayer may Line 14. Other. Attach a statement, listing
only deduct business expenses and interest by type and amount, all allowable deductions Line 3
owed to a related party in the year the that are not deductible elsewhere on Form If the corporation had gross receipts of at
payment is included in the income of the 1120-FSC. Enter the total on line 14. least $500 million in any 1 of the 3 tax years
related party. See sections 163(e)(3) and Examples of other deductions include: preceding the current tax year, complete and
267(a)(2) for limitations on deductions for • Amortization. See Part VI of Form 4562. attach Form 8991. Enter on line 3 the base
unpaid interest and expenses. • Insurance premiums. erosion minimum tax from Form 8991, Part
Limitations on business interest ex- • Legal and professional fees. IV, line 5e. See section 59A and the
pense. Business interest expense may be • Supplies used and consumed in the Instructions for Form 8991.
business.
limited. See section 163(j) and Form 8990. Utilities. Line 4
•
Line 1. Enter only foreign direct costs on Do not deduct: A FSC generally enters on line 4 the sum of
lines 1a through 1e. See section 924(e) and • Amounts paid or incurred to, or at the Schedule J, lines 2 and 3. However, if the
Regulations sections 1.924(e)-1(a) through direction of, a government or governmental FSC is an applicable corporation under
(e) for definitions and rules on direct activity entity for the violation, or investigation or section 59(k) and is subject to the corporate
costs related to foreign trade income. inquiry into the potential violation, of a law. alternative minimum tax (CAMT), complete
Line 5. Salaries and wages. Enter the total However, see section 162(f) for exceptions to Form 4626 and attach it to Form 1120-FSC.
salaries and wages paid for the tax year. Do the general rule. Enter on line 4 the sum of (a) the amount
not include salaries and wages deductible • Any amount that is allocable to a class of from Form 1120-FSC, Schedule J, lines 2
elsewhere on the return, such as amounts exempt income. See section 265(b) for and 3, and (b) the amount from Form 4626,
included in officers' compensation, cost of exceptions. Part II, line 13.
goods sold, elective contributions to a See Pub. 542 and the Instructions for Line 5
section 401(k) cash or deferred Form 1120 for details on other deductions
arrangement, or amounts contributed under that may apply to corporations. Foreign tax credit. Generally, a FSC may
a salary reduction SEP agreement or a not claim a foreign tax credit. It may,
however, claim a foreign tax credit for any
SIMPLE IRA plan. Schedule J foreign taxes imposed on foreign source
Line 10. Compensation of officers. Enter taxable nonforeign trade income
deductible officers' compensation on line 10. Line 1
(Schedule F, Part II) that is treated as
Do not include compensation deductible If the FSC is a member of a controlled group, effectively connected with a U.S. trade or
elsewhere on the return, such as amounts as defined in section 927(d)(4), it must check business. See Temporary Regulations
included in cost of goods sold, elective the box on line 1 and complete Schedule O section 1.921-3T(d)(2) for more details.
contributions to a section 401(k) cash or (Form 1120),Consent Plan and
deferred arrangement, or amounts Apportionment Schedule for a Controlled

Instructions for Form 1120-FSC (Rev. 1-2024) 11

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Dividends and Dividends-Received Deduction Worksheet                                                                                  Keep for Your Records
(See Instructions for Dividends and Dividends-Received Deduction Worksheet, earlier.)                                                                    (c) 
                                                                                                                        (a) Dividends             Dividends-received 
                                                                                                                        received       (b) %      deduction: (a) (b) x 
   1 Dividends from less-than-20%-owned domestic corporations (other than 
     debt-financed stock)    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           50
   2 Dividends from 20%-or-more-owned domestic corporations (other than 
     debt-financed stock)    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           65
   3 Dividends on certain debt-financed stock of domestic and foreign corporations 
     (section 246A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        See Inst.
   4 Dividends on certain preferred stock of less-than-20%-owned public 
     utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 23.3
   5 Dividends on certain preferred stock of 20%-or-more-owned public 
     utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 26.7
   6 Dividends from less-than-20%-owned foreign corporations . . . . . . . . . . . . . . . .                                               50
   7 Dividends from 20%-or-more-owned foreign corporations      . . . . . . . . . . . . . . . .                                            65
   8 Total dividends-received deduction. Add lines 1 through 7. See instructions for 
     limitation. Enter here and on Schedule B, line 19b . . . . . . . . . . . . . . . . . . . . . .                    ▶
  9  Other dividends from foreign corporations not included on line 3, 6, or 7 . . . . . . .
  10 Other dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  11 Total dividends. Add lines 1 through 10. Enter here and on 
     Schedule F, line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        ▶

Schedule L                                       If the total adjustment to be entered on                                  the value is over $400 ($1,600 if part of a 
                                               line 27 is a negative amount, enter the                                     qualified plan).
The balance sheet should agree with the        amount in parentheses.                                                      • The cost of skyboxes.
FSC's books and records. Include                                                                                             Nondeductible club dues.
certificates of deposit as cash on line 1,                                                                                 •
Schedule L.                                    Schedule M-1                                                                • The part of luxury water travel expenses 
                                                                                                                           not deductible under section 274(m).
Line 5. Tax-exempt securities. Include on      Line 5c. Travel and entertainment.                                          • Expenses for travel as a form of 
this line:                                     Include on line 5c any of the following.                                    education.
• State and local government obligations,      • Entertainment expenses not deductible                                     • Other nondeductible travel and 
the interest on which is excludible from gross under section 274(a).                                                       entertainment expenses.
income under section 103(a), and               • Meal expenses not deductible under 
• Stock in a mutual fund or other regulated    section 274(n).                                                             Line 7a. Tax-exempt interest. Report any 
investment company that distributed            • Expenses for the use of an entertainment                                  tax-exempt interest received or accrued, 
exempt-interest dividends during the tax year  facility.                                                                   including any exempt-interest dividends 
of the FSC.                                    • The part of business gifts over $25.                                      received as a shareholder in a mutual fund or 
                                               • Expenses of an individual over $2,000,                                    other regulated investment company. Also 
Line 27. Adjustments to shareholders'          that are allocable to conventions on cruise                                 report this same amount on line 2, Additional 
equity. Some examples of adjustments to        ships.                                                                      Information, on page 2 of the form.
report on this line include:                   • Employee achievement awards of 
• Foreign currency translation adjustments.    nontangible property or of tangible property if 
• The excess of additional pension liability 
over unrecognized prior service cost.

12                                                                                                                      Instructions for Form 1120-FSC (Rev. 1-2024)

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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 Internal
Revenue Code section 6103.
The estimated burden for taxpayers filing this form is approved under OMB control number 1545-0123.
If you have comments concerning the accuracy of these time estimates or suggestions for making this form and related schedule simpler,
we would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to the Internal Revenue
Service, Tax Forms and Publications Division, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send the tax form to this
address. Instead, see Where To File, earlier, near the beginning of the instructions.

Instructions for Form 1120-FSC (Rev. 1-2024) 13

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Forms 1120-FSC                                                              Using the list of activities and codes below, determine     Once the principal business activity is determined, 
                                                                 from which activity the FSC derives the largest percentage         entries must be made on Form 1120-FSC, page 2, 
Principal Business Activity Codes                                of its “total receipts.” Total receipts is defined as the sum of   Additional Information, lines 1a, 1b, and 1c. For the 
                                                                 the foreign trading gross receipts on Form 1120-FSC,               business activity code number, enter the six digit code 
This list of principal business activities and their associated  page 3, Schedule B, line 6a, and the total income on               selected from the list below. On line 1b, enter a brief 
codes is designed to classify an enterprise by the type of       page 4, Schedule F, lines 4 and 17. If the FSC's largest           description of the FSC's business activity. Finally, enter a 
activity in which it is engaged to facilitate the administration percentage of its total receipts is derived from the               description of the principal product or service of the FSC on 
of the Internal Revenue Code. These principal business           wholesale trading of durable goods, the FSC must use one           line 1c.
activity codes are based on the North American Industry          of the corresponding codes from the list below 
Classification System.                                           (423100-423990).
Wholesale Trade                           424300                 Apparel, Piece Goods, & Notions     513210 Software Publishers                 532210  Consumer Electronics & 
Merchant Wholesalers, Durable Goods       424400                 Grocery & Related Products          Motion Picture and Sound Recording                 Appliances Rental
423100 Motor Vehicle & Motor Vehicle      424500                 Farm Product Raw Materials          Industries                                 532281  Formal Wear & Costume Rental
       Parts & Supplies                   424600                 Chemical & Allied Products          512100 Motion Picture & Video Industries   532282  Video Tape & Disc Rental
423200 Furniture & Home Furnishings       424700                 Petroleum & Petroleum Products             (except video rental)               532283  Home Health Equipment Rental
423300 Lumber & Other Construction        424800                 Beer, Wine, & Distilled Alcoholic   512200 Sound Recording Industries          532284  Recreational Goods Rental
       Materials                                                 Beverages                           Broadcasting, Content Providers, and       532289  All Other Consumer Goods Rental
423400 Professional & Commercial          424910                 Farm Supplies                       Telecommunications                         532310  General Rental Centers
       Equipment & Supplies               424920                 Book, Periodical, & Newspapers      516100 Radio & Television Broadcasting     532400  Commercial & Industrial Machinery 
423500 Metal & Mineral (except Petroleum) 424930                 Flower, Nursery Stock, & Florists'  516210 Media Streaming, Social Networks,           & Equipment Rental & Leasing
423600 Household Appliances and                                  Supplies                                   & Other Content Providers
       Electrical & Electronic Goods      424940                 Tobacco Products & Electronic       517000 Telecommunications (including       Professional Services
423700 Hardware & Plumbing & Heating                             Cigarettes                                 Wired, Wireless, Satellite, Cable & Architectural, Engineering, and Related 
                                                                                                            Other Program Distribution, 
       Equipment & Supplies               424950                 Paint, Varnish, & Supplies                 Resellers, Agents, Other            Services
423800 Machinery, Equipment, & Supplies   424990                 Other Miscellaneous Nondurable             Telecommunications, & Internet      541310  Architectural Services
423910 Sporting & Recreational Goods &                           Goods                                      Service Providers)                  541320  Landscape Architecture Services
       Supplies                           Wholesale Electronic Markets and Agents                    Data Processing Services                   541330  Engineering Services
423920 Toy & Hobby Goods & Supplies       and Brokers                                                518210 Computing Infrastructure            541340  Drafting Services
423930 Recyclable Materials               425120                 Wholesale Trade Agents & Brokers           Providers, Data Processing, Web     541350  Building Inspection Services
                                                                                                            Hosting, & Related Services
423940 Jewelry, Watch, Precious Stone, &  Information                                                519200 Web Search, Rentals, Libraries,     541360  Geophysical Surveying & Mapping 
       Precious Metals                    Publishing Industries (except Internet)                           Archives, & Other Info. Services            Services
                                                                                                                                                541370  Surveying & Mapping (except 
423990 Other Miscellaneous Durable        513110                 Newspaper Publishers                Rental and Leasing                                 Geophysical) Services
       Goods
Merchant Wholesalers, Nondurable          513120                 Periodical Publishers               Rental and Leasing Services                541380  Testing Laboratories
Goods                                     513130                 Book Publishers                     532100 Automotive Equipment Rental &       Other Professional Services
424100 Paper & Paper Products             513140                 Directory & Mailing List Publishers        Leasing                             541600  Management, Scientific, & 
424210 Drugs & Druggists' Sundries        513190                 Other Publishers                                                                       Technical Consulting Services

       14

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