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                                                                                                             Department of the Treasury
                                                                                                             Internal Revenue Service
Instructions for Form 

1120-IC-DISC

(Rev. December 2024)

(Use with December 2024 revision of Form 1120-IC-DISC, November 2018 revision 
of separate Schedule K, September 2017 revision of separate Schedule P, and 
September 2016 revision of separate Schedule Q)
Interest Charge Domestic International Sales Corporation Return

Section references are to the Internal Revenue Code unless                     amount is adjusted annually for inflation. For the annual adjusted 
otherwise noted.                                                               inflation amount:
Contents                                                                Page     1. Go to IRS.gov/Newsroom/Inflation-Adjusted-Tax-Items-by-
General Instructions    . . . . . . . . . . . . . . . . . . . . . . . . .   1  Tax-Year,
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1    2. Click on the link for the IRS tax inflation adjustments for 
                                                                               your tax year,
Who Must File   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
                                                                                 3. Click on the Revenue Procedure for the tax year, and
When To File  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
                                                                                 4. Find section 3.31, Limitation on Use of Cash Method of 
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2  Accounting, in the Revenue Procedure for the applicable amount 
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2  for the average annual gross receipts.
Other Forms and Statements That May Be 
Required      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2  The term U.S. possession changed to U.S. territory.     We 
                                                                               have updated the term U.S. possession to U.S. territory 
Assembling the Return       . . . . . . . . . . . . . . . . . . . . . . .   3  throughout these instructions. The meaning of these terms 
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . .        3  remains the same.
Accounting Periods . . . . . . . . . . . . . . . . . . . . . . . . . .      3
                                                                               Photographs of Missing Children
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . . .           3
                                                                               The IRS is a proud partner with the National Center for Missing & 
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3  Exploited Children® (NCMEC). Photographs of missing children 
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  selected by the Center may appear in instructions on pages that 
Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5  would otherwise be blank. You can help bring these children 
Specific Instructions   . . . . . . . . . . . . . . . . . . . . . . . . .   5  home by looking at the photographs and calling 
                                                                               1-800-THE-LOST (1-800-843-5678) if you recognize a child.
Schedule A—Cost of Goods Sold               . . . . . . . . . . . . . . .   6
Schedule B—Gross Income             . . . . . . . . . . . . . . . . . . .   7
Schedule C—Dividends, Inclusions, and Special                                  General Instructions
Deductions        . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
                                                                               Purpose of Form
Schedule E—Deductions           . . . . . . . . . . . . . . . . . . . .     11
                                                                               Form 1120-IC-DISC is an information return filed by interest 
Schedule J—Deemed and Actual Distributions and                                 charge domestic international sales corporations (IC-DISCs), 
Deferred DISC Income for the Tax Year . . . . . . . .                       13 former DISCs, and former IC-DISCs.
Schedule K (Form 1120-IC-DISC)—Shareholder's 
Statement of IC-DISC Distributions                  . . . . . . . . . .     14 What Is an IC-DISC?
Schedule L—Balance Sheets per Books                   . . . . . . . . .     14 An IC-DISC is a domestic corporation that has elected to be an 
Schedule N—Export Gross Receipts of the                                        IC-DISC and its election is still in effect. The IC-DISC election is 
                                                                               made by filing Form 4876-A, Election To Be Treated as an 
IC-DISC and Related U.S. Persons                    . . . . . . . . . .     15 Interest Charge DISC.
Schedule O—Other Information . . . . . . . . . . . . . . . .                15
                                                                                 Generally, an IC-DISC is not taxed on its income. 
Schedule P (Form 1120-IC-DISC)—Intercompany                                    Shareholders of an IC-DISC are taxed on its income when the 
Transfer Price or Commission                . . . . . . . . . . . . . .     16 income is actually (or deemed) distributed. In addition, section 
                                                                               995(f) imposes an interest charge on shareholders for their 
Future Developments                                                            share of DISC-related deferred tax liability. See Form 8404, 
For the latest information about developments related to Form                  Interest Charge on DISC-Related Deferred Tax Liability, for 
1120-IC-DISC and its instructions, such as legislation enacted                 details.
after they were published, go to IRS.gov/Form1120ICDISC.                         To be an IC-DISC, a corporation must be organized under the 
                                                                               laws of a state or the District of Columbia and meet the following 
What’s New                                                                     tests.
Gross receipts test relating to method-of-accounting re-                       • At least 95% of its gross receipts during the tax year are 
quirements change.      We removed the threshold amount for the                qualified export receipts.
gross receipts test throughout these instructions because this                 • At the end of the tax year, the adjusted basis of its qualified 
                                                                               export assets is at least 95% of the sum of the adjusted basis of 
                                                                               all of its assets.

Nov 5, 2024                                                             Cat. No. 11476W

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• It has only one class of stock, and its outstanding stock has a income, but must complete Schedules J, L, and M of Form
par or stated value of at least $2,500 on each day of the tax year 1120-IC-DISC and Schedule K (Form 1120-IC-DISC). Write
(or, for a new corporation, on the last day to elect IC-DISC status “Former DISC” or “Former IC-DISC” across the top of the return.
for the year and on each later day).
• It maintains separate books and records. When To File
• Its tax year must conform to the tax year of the principal File Form 1120-IC-DISC by the 15th day of the 9th month after
shareholder who has the highest percentage of voting power. If the IC-DISC's tax year ends. No extensions are allowed. If the
two or more shareholders have the highest percentage of voting due date falls on a Saturday, Sunday, or a legal holiday, the
power, the IC-DISC must elect a tax year that conforms to that of corporation may file on the next business day.
any one of the principal shareholders. See section 441(h) and its
regulations for more information. Where To File
• Its election to be treated as an IC-DISC is in effect for the tax If you are using the U.S. Postal Service, file Form 1120-IC-DISC
year. at the following address:
See Definitions, later, and section 992 and related regulations
for details. Department of the Treasury
Internal Revenue Service Center
Distribution to meet qualification requirements. Kansas City, MO 64999
• An IC-DISC that does not meet the gross receipts test or
qualified export asset test during the tax year will still be
Private delivery services (PDSs). Corporations may use
considered to have met them if, after the tax year ends, the
certain PDSs designated by the IRS to meet the “timely mailing
IC-DISC makes a pro rata property distribution to its
as timely filing” rule for tax returns. Go to IRS.gov/PDS.
shareholders and specifies at the time that this is a distribution to
meet the qualification requirements. The PDS can tell you how to get written proof of the mailing
• If the IC-DISC did not meet the gross receipts test, the date.
distribution equals the part of its taxable income attributable to For the IRS mailing address to use if you’re using a PDS, go
gross receipts that are not qualified export gross receipts. to IRS.gov/PDSstreetAddresses.
• If the IC-DISC did not meet the qualified export asset test, the
distribution equals the fair market value (FMV) of the assets that Private delivery services cannot deliver items to P.O.
are not qualified export assets on the last day of the tax year. ! boxes. You must use the U.S. Postal Service to mail any
• If the IC-DISC did not meet either test, the distribution CAUTION item to an IRS P.O. box address.
generally equals the sum of both amounts.
Regulations section 1.992-3 explains how to figure the Who Must Sign
distribution. The return must be signed and dated by:
• The president, vice president, treasurer, assistant treasurer,
Interest on late distribution. If the IC-DISC makes a chief accounting officer; or
distribution after Form 1120-IC-DISC is due, interest must be • Any other corporate officer (such as tax officer) authorized to
paid to the United States Treasury. The interest charge is 4 / % 1 2 sign.
of the distribution times the number of tax years that begin after
the tax year to which the distribution relates until the date the If a return is filed on behalf of a corporation by a receiver,
IC-DISC made the distribution. trustee, or assignee, the fiduciary must sign the return, instead of
If the IC-DISC must pay this interest, send the payment to the the corporate officer. Returns and forms signed by a receiver or
Internal Revenue Service Center where you filed Form trustee in bankruptcy on behalf of a corporation must be
1120-IC-DISC within 30 days of making the distribution. On the accompanied by a copy of the order or instructions of the court
payment, write the IC-DISC's name, address, and employer authorizing signing of the return or form.
identification number (EIN); the tax year; and a statement that If an employee of the corporation completes Form
the payment represents the interest charge under Regulations 1120-IC-DISC, the paid preparer's space should remain blank.
section 1.992-3(c)(4). Anyone who prepares Form 1120-IC-DISC but does not charge
the corporation should not complete that section. Generally,
Who Must File anyone who is paid to prepare Form 1120-IC-DISC must sign it
The corporation must file Form 1120-IC-DISC if it elected, by and fill in the “Paid Preparer Use Only” area.
filing Form 4876-A, to be treated as an IC-DISC and its election
is in effect for the tax year. The paid preparer must complete the required preparer
information and:
If the corporation is a former DISC or former IC-DISC, it must • Sign the return in the space provided for the preparer's
file Form 1120-IC-DISC in addition to any other return required. signature, and
• Give a copy of the return to the taxpayer.
A former DISC is a corporation that was a DISC on or before
December 31, 1984, but failed to qualify as a DISC after Note. A paid preparer may sign original or amended returns by
December 31, 1984, or did not elect to be an IC-DISC after rubber stamp, mechanical device, or computer software
1984; and at the beginning of the current tax year, it had program.
undistributed income that was previously taxed or it had
accumulated DISC income. Other Forms and Statements That
A former IC-DISC is a corporation that was an IC-DISC in an May Be Required
earlier year but did not qualify as an IC-DISC for the current tax
year; and at the beginning of the current tax year, it had Informing Shareholders
undistributed income that was previously taxed or accumulated
IC-DISC income. See section 992 and related regulations. Shareholders who are foreign persons. The corporation
should inform shareholders who are nonresident alien
A former DISC or former IC-DISC need not complete lines 1 individuals or foreign corporations, trusts, or estates that if they
through 8 on page 1 and the schedules for figuring taxable have gains from disposal of stock in the IC-DISC, former DISC,

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

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or former IC-DISC, or distributions from accumulated IC-DISC to the Revenue Procedure that contains the annual inflation
income, including deemed distributions, they must treat these amount. However, see Nonaccrual experience method for
amounts as effectively connected with the conduct of a trade or service providers., later.
business conducted through a permanent establishment in the • Unless it is a small business taxpayer (defined below), an
United States and derived from sources within the United States. IC-DISC must use the accrual method for sales and purchases
of inventory items. See Schedule A—Cost of Goods Sold, later.
Election to reduce basis under section 362(e)(2)(C). If
property is transferred to a corporation subject to section 362(e) • A member of a controlled group may not use an accounting
method that would distort any group member's income, including
(2), the transferor and the acquiring corporation may elect, under
its own. For example, an IC-DISC acts as a commission agent
section 362(e)(2)(C), to reduce the transferor's basis in the stock
for property sales by a related corporation that uses the accrual
received instead of reducing the acquiring corporation's basis in
method and pays the IC-DISC its commission more than 2
the property transferred. Once made, the election is irrevocable.
months after the sale. In this case, the IC-DISC should not use
For more information, see section 362(e)(2) and Regulations
the cash method of accounting because that method materially
section 1.362-4. If an election is made, a statement must be filed
distorts its income.
in accordance with Regulations section 1.362-4(d)(3).
Small business taxpayer. A small business taxpayer is a
Form 8992. Use Form 8992, U.S. Shareholder Calculation of
taxpayer that (a) has average annual gross receipts of the annual
Global Intangible Low-Taxed Income (GILTI), to figure the
threshold amount listed in section 3.31 of the Revenue
domestic corporation's GILTI under section 951A and attach it to
Procedure for the tax year of the return being filed or less for the
Form 1120-IC-DISC.
3 prior tax years, and (b) is not a tax shelter (as defined in
Form 8993. Use Form 8993, Section 250 Deduction for section 448(d)(3)). See section 471(c) and Inflation-adjusted Tax
Foreign-Derived Intangible Income (FDII) and Global Intangible Items by Tax Year.
Low-Taxed Income (GILTI), to figure the amount of the eligible A small business taxpayer can adopt or change its
deduction for FDII and GILTI under section 250 and attach it to accounting method to account for inventories (a) in the same
Form 1120-IC-DISC. manner as materials and supplies that are non-incidental, or (b)
Other forms and statements. See the Instructions for Form to conform to its treatment of inventories in an applicable
1120 and Pub. 542 for a list of other forms and statements a financial statement (as defined in section 451(b)(3)). If it does
corporation may need to file in addition to the forms and not have an applicable financial statement, it can use the method
statements discussed throughout these instructions. of accounting used in its books and records prepared according
to its accounting procedures. See section 471(c)(1).
Assembling the Return Change in accounting method. To change its method of
To ensure that the corporation's tax return is correctly processed, accounting used to report taxable income, for income as a whole
attach all schedules and other forms after the last page of Form or for the treatment of any material item, the IC-DISC must file
1120-IC-DISC, and in the following order. Form 3115, Application for Change in Accounting Method.
1. Schedule N (Form 1120). See the Instructions for Form 3115 and Pub. 538 for more
2. Form 4136. information and exceptions. Also see Rev. Proc. 2024-30,
3. Schedule D (Form 1120). 2024-30 I.R.B. 183, available at IRS.gov/IRB/
2024-30_IRB#REV-PROC-2024-30, or its successor).
4. Form 8992.
5. Form 8993. Accounting Periods
6. Additional schedules in alphabetical order. An IC-DISC must figure its taxable income on the basis of a tax
7. Additional forms in numerical order. year. A tax year is the annual accounting period an IC-DISC uses
to keep its records and report its income and expenses.
Complete every applicable entry space on Form Generally, IC-DISCs may use a calendar year or a fiscal year.
1120-IC-DISC. Do not enter “See Attached” or “Available Upon
Request” instead of completing the entry spaces. If more space Note. The tax year of an IC-DISC must be the same as the tax
is needed on the forms or schedules, attach separate year of the principal shareholder which, at the beginning of the
statements using the same size and format as the printed forms. IC-DISC tax year, has the highest percentage of voting power. If
If there are supporting statements and attachments, arrange two or more shareholders have the highest percentage of voting
them in the same order as the schedules or forms they support power, the IC-DISC must have a tax year that conforms to the tax
and attach them last. Show the totals on the printed forms. Enter year of any such shareholder. See section 441(h).
the corporation's name and EIN on each supporting statement or
attachment. See Pub. 538 for more information on accounting periods and
tax years.
Accounting Methods
Rounding Off to Whole Dollars
Figure taxable income using the method of accounting regularly
used in keeping the IC-DISC's books and records. In all cases, The IC-DISC may round off cents to whole dollars on its return
the method used must clearly show taxable income. Permissible and schedules. If the IC-DISC does round to whole dollars, it
methods include cash, accrual, or any other method authorized must round all amounts. To round, drop amounts under 50 cents
by the Internal Revenue Code. and increase amounts from 50 to 99 cents to the next dollar (for
example, $1.39 becomes $1 and $2.50 becomes $3).
Generally, the following rules apply. For more information, see If two or more amounts must be added to figure the amount to
Pub. 538. enter on a line, include cents when adding the amounts and
• An IC-DISC must use the accrual method of accounting if its round off only the total.
average annual gross receipts for the 3 prior tax years exceed
the annual threshold amount listed in section 3.31 of the Recordkeeping
Revenue Procedure for the tax year of the return being filed. See
Inflation-adjusted Tax Items by Tax Year, available at IRS.gov/ Keep the IC-DISC's records for as long as they may be needed
Newsroom/Inflation-Adjusted-Tax-Items-by-Tax-Year, for the link for the administration of any provision of the Internal Revenue
Code. Usually, records that support an item of income,
Instructions for Form 1120-IC-DISC (Rev. 12-2024) 3

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deduction, or credit on the return must be kept for 3 years from 8. Certain obligations held by the IC-DISC that were issued
the date the return is due or filed, whichever is later. Keep by a domestic corporation organized to finance export property
records that verify the IC-DISC's basis in property for as long as sales under an agreement with the Export-Import Bank under
they are needed to figure the basis of the original or replacement which the domestic corporation makes export loans that the
property. Export-Import Bank guarantees.
9. Amounts (other than reasonable working capital) on
The IC-DISC should keep copies of all filed returns. They help deposit in the United States used to acquire qualified export
in preparing future and amended returns and in the calculation of assets within the time provided by Regulations section
earnings and profits. 1.993-2(j).
Definitions See Regulations section 1.993-2 for more information.
The following definitions are based on sections 993 and 994. Export property. Export property must be:
Note. “United States,” as used in the following instructions, 1. Made, grown, or extracted in the United States by a
includes Puerto Rico and other U.S. territories, as well as the 50 person other than an IC-DISC;
states and the District of Columbia. 2. Neither excluded under section 993(c)(2) nor declared in
short supply under section 993(c)(3);
Section 993 3. Held mainly for sale, lease, or rent in the ordinary course
Qualified export receipts. Qualified export receipts are any of of a trade or business, by or to an IC-DISC for direct use,
the following. consumption, or disposition outside the United States;
1. Gross receipts from selling, exchanging, or otherwise 4. Property not more than 50% of the FMV of which is
disposing of export property. attributable to articles imported into the United States; and
2. Gross receipts from leasing or renting export property that 5. Neither sold nor leased by or to another IC-DISC that,
the lessee uses outside the United States. immediately before or after the transaction, either belongs to the
same controlled group (defined in section 993(a)(3)) as your
3. Gross receipts from supporting services related to any
IC-DISC or is related to your IC-DISC in a way that would result
qualified sale, exchange, lease, rental, or other disposition of
in losses being denied under section 267.
export property by the IC-DISC.
4. Gross receipts from selling, exchanging, or otherwise See Regulations section 1.993-3 for details.
disposing of qualified export assets that are not export property, A producer's loan. A producer's loan must meet all the
but only if there is a recognized gain. following terms.
5. Dividends (or amounts includible in gross income under 1. Satisfy the requirements of sections 993(d)(2) and (3).
section 951) with respect to stock of a related foreign export
corporation (defined later). 2. Not raise the unpaid balance due the IC-DISC on all of its
producer's loans above the level of accumulated IC-DISC
6. Interest on any obligation that is a qualified export asset. income it had at the start of the month in which it made the loan.
7. Gross receipts for engineering or architectural services for 3. Be evidenced by a note, or other written evidence of
construction projects outside the United States. indebtedness, with a stated maturity date no more than 5 years
8. Gross receipts for the performance of managerial after the date of the loan.
services in furtherance of the production of other qualified export 4. Be made to a person engaged in a U.S. trade or business
receipts of an IC-DISC. of making, growing, or extracting export property.
For more information, see Regulations section 1.993-1. 5. Be designated as a producer's loan when made.
Qualified export assets. Qualified export assets are any of the For more information, see Schedule Q (Form 1120-IC-DISC),
following. Borrower's Certificate of Compliance With the Rules for
1. Export property (defined later). Producer's Loans, and Regulations section 1.993-4.
2. Assets used primarily in connection with the sale, lease, A related foreign export corporation. A related foreign export
rental, storage, handling, transportation, packaging, assembly, or corporation includes the following.
servicing of export property, or the performance of engineering 1. A foreign international sales corporation is a related
or architectural services described in item 7 of Qualified export foreign export corporation if:
receipts, earlier, or managerial services in furtherance of the • The IC-DISC directly owns more than 50% of the total voting
production of qualified export receipts described in items 1, 2, 3, power of the foreign corporation's stock;
and 7, earlier. • For the tax year that ends with or within the IC-DISC's tax
3. Accounts receivable and evidences of indebtedness year, at least 95% of the foreign corporation's gross receipts
produced by transactions listed under Qualified export receipts, consists of the qualified export receipts described in items 1–4 of
items 1–4, 7, and 8, earlier. Qualified export receipts, earlier, and interest on the qualified
4. Temporary investments, such as money and bank export assets listed in items 3 and 4 of Qualified export assets,
deposits, in an amount reasonable to meet the IC-DISC's needs earlier; and
for working capital. • The adjusted basis of the qualified export assets in items 1–4
of Qualified export assets, earlier, that the foreign corporation
5. Obligations related to a producer's loan (defined later). held at the end of the tax year is at least 95% of the adjusted
6. Stock or securities of a related foreign export corporation basis of all assets it held at the end of such tax year.
(defined later). 2. A real property holding company is a related foreign
7. Certain obligations that are issued, guaranteed or insured export corporation if:
by the U.S. Export-Import Bank or the Foreign Credit Insurance • The IC-DISC directly owns more than 50% of the total voting
Association and that the IC-DISC acquires from such bank or power of the foreign corporation's stock, and
association or from the person who sold or bought the goods or • Its exclusive function is to hold title to real property located
services from which the obligations arose. outside the United States for the exclusive use (under lease or

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

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otherwise) of the IC-DISC and applicable foreign law forbids the corporation's revoking its election to be treated as an IC-DISC
IC-DISC to hold title to the property. (or other disqualification), is deemed distributed to the
3. An associated foreign corporation is a related foreign shareholders. See section 995(b)(2)(A).
export corporation if:
• The IC-DISC or a controlled group of corporations to which Penalties
the IC-DISC belongs owns less than 10% of the total voting The IC-DISC may have to pay the following penalties unless it
power of the foreign corporation's stock (section 1563 defines a can show that it had reasonable cause for not providing
controlled group in this sense, and sections 1563(d) and (e) information or not filing a return.
define ownership), and • $100 for each instance of not providing required information,
• The IC-DISC's ownership of the foreign corporation's stock or up to $25,000 during the calendar year.
securities reasonably furthers transactions that lead to qualified • $1,000 for not filing a return.
export receipts for the IC-DISC.
See section 6686 for other details.
See Regulations section 1.993-5 for more information about
related foreign export corporations. If you receive a notice about penalty and interest after you file
Form 1120-IC-DISC, send us an explanation and we will
Gross receipts. Gross receipts are the IC-DISC's total receipts determine if you meet reasonable-cause criteria. Do not attach
from selling, leasing, or renting property that the corporation an explanation when you file Form 1120-IC-DISC.
holds for sale, lease, or rent in the ordinary course of its trade or
business and gross income from all other sources. For Trust fund recovery penalty. This penalty may apply if certain
commissions on selling, leasing, or renting property, include excise, income, social security, and Medicare taxes that must be
gross receipts from selling, leasing, or renting the property on collected or withheld are not collected or withheld, or these taxes
which the commissions arose. See Regulations section 1.993-6 are not paid. These taxes are generally reported on:
for more information. • Form 720, Quarterly Federal Excise Tax Return;
• Form 941, Employer's Quarterly Federal Tax Return;
Section 994, Intercompany Pricing Rules • Form 944, Employer's Annual Federal Tax Return; or
If a related person described in section 482 sells export property • Form 945, Annual Return of Withheld Federal Income Tax.
to the IC-DISC, use the intercompany pricing rules to figure The trust fund recovery penalty may be imposed on all
taxable income for the IC-DISC and the seller. These rules persons who are determined by the IRS to have been
generally do not permit the related person to price at a loss. responsible for collecting, accounting for, and paying over these
Under intercompany pricing, the IC-DISC's taxable income from taxes, and who acted willfully in not doing so. The penalty is
the sale (regardless of the price actually charged) may not equal to the full amount of the unpaid trust fund tax. See the
exceed the greatest of: Instructions for Form 720 or Pub. 15 (Circular E), Employer's Tax
1. 4% of qualified export receipts on the IC-DISC's sale of Guide, for details, including the definition of responsible persons.
the property plus 10% of the IC-DISC's export promotion Other penalties. Other penalties may be imposed for
expenses attributable to the receipts; negligence, substantial understatement of tax, reportable
2. 50% of the IC-DISC's and the seller's combined taxable transaction understatements, and fraud. See sections 6662,
income from qualified export receipts on the property, derived 6662A, and 6663.
from the IC-DISC's sale of the property plus 10% of the
IC-DISC's export promotion expenses attributable to the
receipts; or Specific Instructions
3. Taxable income based on the sale price actually charged,
provided that under section 482 the price actually charged Entity Information
clearly reflects the taxable income of the IC-DISC and the related Period Covered. Enter the tax year in the space provided at the
person. top of the form. For a calendar year, enter the last two digits of
Schedule P (Form 1120-IC-DISC), Intercompany Transfer the calendar year in the first entry space. For a fiscal or short tax
Price or Commission, explains the intercompany pricing rules in year return, fill in the tax year space at the top of the form.
more detail. Name and Address. Include the suite, room, or other unit
number after the street address. If the Post Office does not
Section 994(c), Export Promotion Expenses deliver mail to the street address and the corporation has a P.O.
These are expenses incurred to help distribute or sell export box, show the box number instead.
property for use or distribution outside the United States. These Item C—Employer Identification Number (EIN). Enter the
expenses do not include income tax, but do include 50% of the corporation's EIN. If the corporation does not have an EIN, it
cost of shipping the export property on U.S.-owned and must apply for one. An EIN may be applied for:
U.S.-operated aircraft or ships in those cases where U.S. law or • Online – Go to IRS.gov/EIN. The EIN is issued immediately
regulations do not require that the export property be shipped on once the application information is validated.
such aircraft or ships. • By faxing or mailing Form SS-4, Application for Employer
Identification Number. Corporations located in the United States
Deficits in Earnings and Profits or U.S. territories can use the online application. Foreign
A deficit in earnings and profits is chargeable in the following corporations should call 267-941-1099 (not a toll free number)
order. for more information on obtaining an EIN. See the Instructions for
1. First, to any earnings and profits other than accumulated Form SS-4.
IC-DISC income or previously taxed income. EIN applied for but not received. If the corporation has not
2. Second, to any accumulated IC-DISC income. received its EIN by the time the return is due, enter "Applied For"
3. Third, to previously taxed income. and the date the corporation applied in the space for the EIN.
However, if the corporation is filing its return electronically, an
Do not apply any deficit in earnings and profits against EIN is required at the time the return is filed. An exception
accumulated IC-DISC income that, as a result of the applies to subsidiaries of corporations whose returns are filed
Instructions for Form 1120-IC-DISC (Rev. 12-2024) 5

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with the parent's electronically filed consolidated Form 1120. 1120-IC-DISC). Show in detail the IC-DISC's taxable income
These subsidiaries should enter "Applied For" in the space for attributable to each such transaction or group of transactions.
the EIN on their returns. The subsidiaries' returns are identified Net operating loss (NOL). If line 7 (figured without regard to
under the parent corporation's EIN. the items listed above under minimum taxable income) is zero or
For more information, see the Instructions for Form SS-4. less, the corporation may have an NOL that can be carried back
or forward as a deduction to other tax years. Generally, a
Item E—Total Assets. Enter the IC-DISC's total assets (as
corporation first carries back an NOL attributable to farming
determined by the accounting method regularly used in keeping
losses 2 tax years. However, the corporation can elect to waive
the IC-DISC's books and records) at the end of the tax year. If
the carryback period and instead carry the farming NOL forward
there are no assets at the end of the tax year, enter -0-.
to future tax years. See the Instructions for Form 1139 for other
Item F—Initial Return, Final Return, Name Change, Address special rules and elections.
Change, or Amended Return.
• If this is the IC-DISC's initial or final return, check the Note. The NOL is limited to 80% of taxable income (determined
applicable box in item F at the top of the form. without regard to the net operating loss) for losses arising in tax
• If the IC-DISC has changed its address since it last filed a years beginning after December 31, 2017.
return, check the box for “Address change.” Line 8. Refundable Credit for Federal Tax Paid on Fuels.
• If the IC-DISC changed its name since it last filed a return, Enter the credit from Form 4136.
check the box for “Name change.” Generally, an IC-DISC must
also have amended its articles of incorporation and filed the Schedule A—Cost of Goods Sold
amendment with the state in which it was incorporated.
• To correct an error on a Form 1120-IC-DISC already filed, file Generally, inventories are required at the beginning and end of
an amended Form 1120-IC-DISC and check the “Amended each tax year if the purchase or sale of merchandise is an
return” box. If the amended return changes the income or income-producing factor. See Regulations section 1.471-1. If
distributions of income to shareholders, an amended Schedule K inventories are required, you must generally use an accrual
(Form 1120-IC-DISC) must be filed with the amended Form method of accounting for sales and purchases of inventory
1120-IC-DISC and given to each shareholder. Write items.
“AMENDED” across the top of the corrected Schedule K you Exceptions for certain taxpayers. A small business taxpayer
give to each shareholder. (defined below) can adopt or change its accounting method to
account for inventories in the same manner as materials and
Note. If a change in address or responsible party occurs after supplies that are non-incidental, or conform to its treatment of
the return is filed, use Form 8822-B, Change of Address or inventories in an applicable financial statement (as defined in
Responsible Party—Business, to notify the IRS. See the section 451(b)(3)) (or the method of accounting used in its books
instructions for Form 8822-B for details. and records prepared in accordance with its accounting
Question G(1). For rules of stock attribution, see section procedures, if applicable financial statements are not used). See
267(c). If the owner of the voting stock of the IC-DISC was an section 471(c)(1).
alien individual or a foreign corporation, partnership, trust, or If you account for inventories in the same manner as
estate, check the “Yes” box in the “Foreign owner” column and non-incidental materials and supplies, inventory costs for raw
enter the name of the owner's country, in parentheses, in the materials purchased for use in producing finished goods and
address column. “Owner's country” for individuals is their merchandise purchased for resale are deductible in the year the
country of residence; for other foreign entities, it is the country in finished goods or merchandise are sold (but not before the year
which organized or otherwise created, or in which administered. you paid for the raw materials or merchandise, if you are also
using the cash method).
Taxable Income Under this accounting method, you can currently deduct
An IC-DISC must figure its taxable income although it does not expenditures for direct labor and all indirect costs that would
pay most taxes. An IC-DISC is exempt from the corporate otherwise be included in inventory costs. See the instructions for
income tax and accumulated earnings tax. lines 2 and 7, earlier.
An IC-DISC may not claim the general business credit or the A small business taxpayer claiming exemption from the
credit for fuel produced from a nonconventional source. In requirement to keep inventories is changing its method of
addition, these credits may not be passed through to accounting for purposes of section 481. For additional guidance
shareholders of the corporation. on this method of accounting, see Pub. 538. For guidance on
adopting or changing to this method of accounting, see Form
Line 6a. Net Operating Loss (NOL) Deduction. The NOL 3115 and its instructions.
deduction is the amount of the NOL carryover and NOL
carryback. The 2-year carryback rule does not apply to NOLs If you account for inventories in the same manner as
arising in tax years ending after December 31, 2017. Exceptions non-incidental materials and supplies, inventory costs for raw
apply to NOLs of certain farming losses and NOLs of insurance materials purchased for use in producing finished goods and
companies (other than life insurance companies). See section merchandise purchased for resale are deductible in the year the
172(b) for details. finished goods or merchandise are sold (but not before the year
you paid for the raw materials or merchandise, if you are also
The following special rules apply. The corporation may elect using the cash method).
under section 965(n) to reduce the amount of the NOL for a tax Under this accounting method, you can currently deduct
year and the amount of taxable income reduced by NOL expenditures for direct labor and all indirect costs that would
carryovers or carrybacks to such tax year. See section 965(n) for otherwise be included in inventory costs. See the instructions for
more information. lines 2 and 7, earlier.
Line 7. Taxable Income. If the IC-DISC uses either the gross A small business taxpayer claiming exemption from the
receipts method or combined taxable income method to figure requirement to keep inventories is changing its method of
the IC-DISC's taxable income attributable to any transactions accounting for purposes of section 481. For additional guidance
involving products or product lines, attach Schedule P (Form on this method of accounting, see Pub. 538. For guidance on

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

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adopting or changing to this method of accounting, see Form inventory. If the IC-DISC accounts for inventoriable items in the
3115 and its instructions. same manner as nonincidental materials and supplies, enter on
Small business taxpayer. A small business taxpayer is a line 7 the portion of your raw materials and merchandise
taxpayer that (a) has average annual gross receipts of the annual purchased for resale that was included in the total on line 6 but
threshold amount listed in section 3.31 of the Revenue was not sold during the year.
Procedure for the tax year of the return being filed or less for the Lines 9a Through 9f. Inventory Valuation Methods.
3 preceding tax years, and (b) is not a tax shelter (as defined in Inventories may be valued at:
section 448(d)(3)). See section 471(c); and Inflation-adjusted • Cost,
Tax Items by Tax Year for the annual threshold amount. • Cost or market value (whichever is lower), or
Enter amounts paid for merchandise during the tax year on • Any other method approved by the IRS that conforms to the
line 2. The amount the IC-DISC may deduct for the tax year is requirements of the applicable regulations cited later.
figured on line 8. However, if the IC-DISC is using the cash method of
All filers not using the cash method of accounting should see accounting, it is required to use cost.
Section 263A uniform capitalization rules, later, before IC-DISCs that use erroneous valuation methods must change
completing Schedule A. to a method permitted for federal income tax purposes. Use
If the IC-DISC uses intercompany pricing rules (for purchases Form 3115 to make this change. See the Instructions for Form
from a related supplier), use the transfer price figured in Part II of 3115. Also see Pub. 538.
Schedule P (Form 1120-IC-DISC). On line 9a, check the method(s) used for valuing inventories.
If the IC-DISC acts as another person's commission agent on Under lower of cost or market, the term “market” (for normal
a sale, do not enter any amount in Schedule A for the sale. See goods) means the current bid price prevailing on the inventory
Schedule P (Form 1120-IC-DISC). valuation date for the particular merchandise in the volume
If the IC-DISC uses intercompany pricing rules (for purchases usually purchased by the taxpayer. If section 263A applies to the
from a related supplier), use the transfer price figured in Part II of taxpayer, the basic elements of cost must reflect the current bid
Schedule P (Form 1120-IC-DISC). price of all direct costs and all indirect costs properly allocable to
goods on hand at the inventory date.
All filers not using the cash method of accounting should see
Section 263A uniform capitalization rules, later, before Inventory may be valued below cost when the merchandise is
completing Schedule A. unsalable at normal prices or unusable in the normal way
If the IC-DISC acts as another person's commission agent on because the goods are subnormal due to damage,
imperfections, shopwear, etc., within the meaning of Regulations
a sale, do not enter any amount in Schedule A for the sale. See
section 1.471-2(c). The goods may be valued at the current bona
Schedule P (Form 1120-IC-DISC).
fide selling price, minus direct cost of disposition (but not less
Line 1. Inventory at Beginning of the Year. If the IC-DISC is than scrap value). Bona fide selling price means actual offering
changing its method of accounting for the current tax year, it of goods during a period ending not later than 30 days after
must refigure last year's closing inventory using the new method inventory date.
of accounting and enter the result on line 1. If there is a If this is the first year the Last-in, First-out (LIFO) inventory
difference between last year's closing inventory and the refigured method was either adopted or extended to inventory goods not
amount, attach an explanation and take it into account when previously valued under the LIFO method provided in section
figuring the IC-DISC's section 481(a) adjustment. 472, attach Form 970, Application To Use LIFO Inventory
Line 4. Additional Section 263A Costs. An entry is required Method, or a statement with the information required by Form
on this line only for IC-DISCs that have elected a simplified 970. Also check the LIFO box on line 9c. On line 9d, enter the
method of accounting. amount or the percent of total closing inventories computed
For IC-DISCs that have elected the simplified production under section 472. Estimates are acceptable.
method, additional section 263A costs are generally those costs, If the IC-DISC changed or extended its inventory method to
other than interest, that were not capitalized under the IC-DISC's LIFO and had to write up the opening inventory to cost in the
method of accounting immediately prior to the effective date of year of election, report the effect of the write-up as other income
section 263A but are now required to be capitalized under (Schedule B, line 2j or 3f), proportionately over a 3-year period
section 263A. For details, see Regulations section 1.263A-2(b). that begins with the year of the LIFO election.
For IC-DISCs that have elected the simplified resale method,
Schedule B—Gross Income
additional section 263A costs are generally those costs incurred
with respect to the following categories. If an income item falls into two or more categories, report each
• Off-site storage or warehousing. part on the applicable line. For example, if interest income
• Purchasing. consists of qualified interest from a foreign international sales
• Handling, such as processing, assembling, repackaging, and corporation and nonqualifying interest from a domestic
transporting. obligation, enter the qualified interest on an attached statement
• General and administrative costs (mixed service costs). for line 2g and the nonqualifying interest on an attached
statement for line 3f.
A small business taxpayer is not required to capitalize costs
under section 263A. See section 263A(i). For gain from selling qualified export assets, attach a
For details, see Regulations section 1.263A-3(d). separate statement in addition to the forms required for lines 2h
and 2i.
Enter on line 4 the balance of section 263A costs paid or
incurred during the tax year not includible on lines 2, 3, and 5. Nonaccrual experience method for service providers.
Accrual method corporations are not required to accrue certain
Line 5. Other Costs. Enter on line 5 any costs paid or incurred amounts to be received from the performance of services that,
during the tax year not entered on lines 2 through 4. on the basis of their experience, will not be collected, if:
Line 7. Inventory at End of the Year. See Regulations • The services are in the fields of health, law, engineering,
sections 1.263A-1 through 1.263A-3 for details on figuring the architecture, accounting, actuarial science, performing arts, or
amount of additional section 263A costs to be included in ending consulting; or

Instructions for Form 1120-IC-DISC (Rev. 12-2024) 7

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• The corporation's average annual gross receipts for any prior 5. Outside the United States to a buyer or lessee at a
3-tax-year period does not exceed the annual threshold amount storage or assembly site if the property was previously shipped
listed in section 3.31 of the Revenue Procedure for the tax year from the United States by the seller or lessor.
of the return being filed. For more details, see section 448(d)(5); 6. Outside the United States to a purchaser or lessee if the
and Inflation-adjusted Tax Items by Tax Year for the annual property was previously shipped by the seller or lessor from the
threshold amount. United States and if the property is located outside the United
This provision does not apply to any amount if interest is States pursuant to a prior lease by the seller or lessor, and either
required to be paid on the amount or if there is any penalty for (a) the prior lease terminated at the expiration of its term (or by
failure to timely pay the amount. See Regulations section the action of the prior lessee acting alone), (b) the sale occurred
1.448-2 for information on the nonaccrual experience method, or the term of the subsequent lease began after the time at
including information on safe harbor methods. For information on which the term of the prior lease would have expired, or (c) the
a book safe harbor method of accounting for corporations that lessee under the subsequent lease is not a related person (a
use the nonaccrual experience method of accounting, see Rev. member of the same controlled group as defined in section
Proc. 2011-46, 2011-42 I.R.B. 518, as modified by Rev. Proc. 993(a)(3) or a relationship that would result in a disallowance of
2016-29, 2016-21 I.R.B. 880. Also see the Instructions for Form losses under section 267 or section 707(b)) immediately before
3115 for procedures to obtain automatic consent to change to or after the lease with respect to the lessor, and the prior lease
this method or make certain changes within this method. was terminated by the action of the lessor (acting alone or
Corporations that qualify to use the nonaccrual experience together with the lessee).
method should attach a statement showing total gross receipts,
the amount not accrued as a result of the application of section Line 1a. Enter the IC-DISC's qualified export receipts from
448(d)(5), and the net amount accrued. Enter the amount on the export property sold to foreign, unrelated buyers for delivery
applicable line of Schedule B. outside the United States. Do not include amounts entered on
line 1b.
Commissions: Special Rule.
Line 1b. Enter the IC-DISC's qualified export receipts from
Note. “United States,” as used in the following instructions, export property sold for delivery outside the United States to a
includes Puerto Rico and other U.S. territories, as well as the 50 related foreign entity for resale to a foreign, unrelated buyer, or
states and the District of Columbia. an unrelated buyer when a related foreign entity acts as
commission agent.
If the IC-DISC received commissions on selling or renting
property or furnishing services, list in column (b) the gross Line 2a. Enter the gross amount received from leasing or
receipts from the sales, rentals, or services on which the subleasing export property to unrelated persons for use outside
commissions arose, and in column (c), list the commissions the United States.
earned. In column (d), report receipts from noncommissioned Receipts from leasing export property may qualify in some
sales or rentals of property or furnishing of services, as well as years and not in others, depending on where the lessee uses the
all other receipts. property. Enter only receipts that qualify during the tax year. (Use
For purposes of completing lines 1a and 1b, related Schedule E to deduct expenses such as repairs, interest, taxes,
purchasers are members of the same controlled group (as and depreciation.)
defined in section 993(a)(3)) as the IC-DISC. All other Line 2b. A service connected to a sale or lease is related to it if
purchasers are unrelated. the service is usually furnished with that type of sale or lease in
A qualified export sale or lease must meet a use test and a the trade or business where it took place. A service is subsidiary
destination test in order to qualify. if it is less important than the sale or lease.
The use test applies at the time of the sale or lease. If the Line 2c. Include receipts from engineering or architectural
property is used predominantly outside the United States and services on foreign construction projects abroad or proposed for
the sale or lease is not for ultimate use in the United States, it is location abroad. These services include feasibility studies,
a qualified export sale or lease. Otherwise, if a reasonable design and engineering, and general supervision of
person would believe that the property will be used in the United construction, but do not include services connected with mineral
States, the sale or lease is not a qualified export sale or lease. exploration.
For example, if property is sold to a foreign wholesaler and it is
known in trade circles that the wholesaler, to a substantial extent, Line 2d. Include receipts for export management services
supplies the U.S. retail market, the sale would not be a qualified provided to unrelated IC-DISCs.
export sale, and the receipts would not be qualified export Line 2e. Qualified dividends and inclusions from Schedule C,
receipts. line 19a.
Regardless of where title or risk of loss shifts from the seller Line 2f. Include interest received on any loan that qualifies as a
or lessor, the property must be delivered under one of the producer's loan.
following conditions to meet the destination test.
1. Within the United States to a carrier or freight forwarder Line 2g. Enter interest on any qualified export asset other than
for ultimate delivery outside the United States to a buyer or interest on producer's loans. For example, include interest on
lessee. accounts receivable from sales in which the IC-DISC acted as a
principal or agent and interest on certain obligations issued,
2. Within the United States to a buyer or lessee who, within guaranteed, or insured by the Export-Import Bank or the Foreign
1 year of the sale or lease, delivers it outside the United States or Credit Insurance Association.
delivers it to another person for ultimate delivery outside the
United States. Line 2h. On Schedule D (Form 1120), Capital Gains and
3. Within or outside the United States to an IC-DISC that is Losses, report in detail every sale or exchange of a capital asset,
not a member of the same controlled group (as defined in even if there is no gain or loss.
section 993(a)(3)) as the seller or lessor. In addition to Schedule D (Form 1120), attach a separate
4. Outside the United States by means of the seller's statement figuring gain from the sale of qualified export assets.
delivery vehicle (ship, plane, etc.).

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Line 2i. Enter the net gain or loss from line 18, Part II, Form • Dividends (except those received on certain debt-financed
4797, Sales of Business Property. stock acquired after July 18, 1984) that are received from
20%-or-more-owned domestic corporations subject to income
In addition to Form 4797, attach a separate statement figuring tax and that are eligible for the 65% deduction under section
gain from the sale of qualified export assets. 243(c), and
Line 2j. Enter any other qualified export receipts for the tax year • Taxable distributions from an IC-DISC or former DISC that are
not reported on lines 2a through 2i. considered eligible for the 65% deduction.
Section 481(a) adjustment. The IC-DISC may have to make Line 3, Column (a). Enter the following.
an adjustment under section 481(a) to prevent amounts of • Dividends received on certain debt-financed stock acquired
income or expense from being duplicated or omitted. This after July 18, 1984, from domestic and foreign corporations
section 481(a) adjustment period is generally 1 year for a net subject to income tax and that would otherwise be subject to the
negative adjustment and 4 years for a net positive adjustment. dividends-received deduction under section 243(a)(1), 243(c), or
However, an IC-DISC may elect to use a 1-year adjustment 245(a). Generally, debt-financed stock is stock that the
period if the net section 481(a) adjustment for the change is less corporation acquired by incurring a debt (for example, it
than $25,000. The IC-DISC must complete the appropriate lines borrowed money to buy the stock).
of Form 3115 to make the election. See the Instructions for Form • Dividends received from a RIC on debt-financed stock. The
3115 for more information. amount of dividends eligible for the dividends-received
Include any net positive section 481(a) adjustment on deduction is limited by section 854(b). The corporation should
Schedule B, line 2j or 3f (depending on whether the inventory, receive a notice from the RIC specifying the amount of dividends
when sold, will generate qualified export receipts). If the net that qualify for the deduction.
section 481(a) adjustment is negative, report it on Schedule E,
Line 3, Columns (b) and (c). Dividends received on certain
line 2g.
debt-financed stock acquired after July 18, 1984, are not entitled
Line 3b. Enter receipts from selling products subsidized under a to the full 50% or 65% dividends-received deduction. The 50%
U.S. program if they have been designated as excluded receipts. or 65% deduction is reduced by a percentage that is related to
Line 3c. Enter receipts from selling or leasing property or the amount of debt incurred to acquire the stock. See section
services for use by any part of the U.S. government if law or 246A. Also see section 245(a) before making this computation
regulations require U.S. products or services to be used. for an additional limitation that applies to dividends received from
foreign corporations. Attach a statement to Form 1120-IC-DISC
Line 3d. Enter receipts from any IC-DISC that belongs to the showing how the amount on line 3, column (c), was figured.
same controlled group (as defined in section 993(a)(3)).
Line 4, Column (a). Enter dividends received on the preferred
Line 3e. Nonqualified dividends and inclusions from stock of a less-than-20%-owned public utility that is subject to
Schedule C, line 20a. income tax and is allowed the deduction provided in section 247
Line 3f. Include in an attached statement any nonqualifying for dividends paid.
gross receipts not reported on lines 3a through 3e. Do not offset Line 5, Column (a). Enter dividends received on preferred
an income item against a similar expense item. stock of a 20%-or-more-owned public utility that is subject to
The IC-DISC may have to report a section 481(a) adjustment income tax and is allowed the deduction under section 247 for
on line 3f. See Section 481(a) adjustment, earlier, for additional dividends paid.
information. Line 6, Column (a). Enter the U.S.-source portion of dividends
that:
Schedule C—Dividends, Inclusions, • Are received from less-than-20%-owned foreign corporations,
and Special Deductions and
• Qualify for the 50% deduction under section 245(a). To qualify
For purposes of the 20% ownership test on lines 1 through 7, the for the 50% deduction, the corporation must own at least 10% of
percentage of stock owned by the corporation is based on voting the stock of the foreign corporation by vote and value.
power and value of the stock. Preferred stock described in
section 1504(a)(4) is not taken into account. Line 7, Column (a). Enter the U.S.-source portion of dividends
that are received from 20%-or-more-owned foreign corporations
Line 1, Column (a). Enter dividends (except those received on and that qualify for the 65% deduction under section 245(a).
certain debt-financed stock acquired after July 18, 1984—see
section 246A) that: Line 8, Column (a). Enter dividends received from wholly
• Are received from less-than-20%-owned domestic owned foreign subsidiaries that are eligible for the 100%
corporations subject to income tax, and deduction under section 245(b).
• Qualify for the 50% deduction under section 243(a)(1). In general, the deduction under section 245(b) applies to
Also include the following on line 1. dividends paid out of the earnings and profits of a foreign
• Taxable distributions from an IC-DISC or former DISC that are corporation for a tax year during which:
designated as being eligible for the 50% deduction and certain • All of its outstanding stock is owned (directly or indirectly) by
dividends of Federal Home Loan Banks. See section 246(a)(2). the domestic corporation receiving the dividends, and
• Dividends received (except those received on certain • All of its gross income from all sources is effectively
debt-financed stock acquired after July 18, 1984) from a connected with the conduct of a trade or business within the
regulated investment company (RIC). The amount of dividends United States.
eligible for the dividends-received deduction under section 243 Line 9, Column (c). Generally, line 9, column (c), may not
is limited by section 854(b). The corporation should receive a exceed the amount from line 29 of the Worksheet.for
notice from the RIC specifying the amount of dividends that Schedule C, Lines 9 and 17. However, in a year in which an NOL
qualify for the deduction. occurs, this limitation does not apply even if the loss is created
Report so-called dividends or earnings received from mutual by the dividends-received deduction. See sections 172(d) and
savings banks, etc., as interest. Do not treat them as dividends. 246(b).
Line 2, Column (a). Enter on line 2:

Instructions for Form 1120-IC-DISC (Rev. 12-2024) 9

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Worksheet for Schedule C, Lines 9 and 17                                                                                                                  Keep for Your Records

Use this worksheet to figure the dividends-received deduction after the section 246(b) limitation, including the section 250 deduction. 
Also use this worksheet to figure the section 250 deduction after the section 246(b) limitation. Before completing this worksheet, 
complete Form 1120-IC-DISC, page 1, line 5, and Schedule C, lines 1 through 8 and 10. Also, complete Form 8993, Part III, lines 28 
and 29.
   1.    Refigure Form 1120-IC-DISC, page 1, line 5, without any adjustment under section 1059 and without any capital 
         loss carryback to the tax year under section 1212(a)(1) .            . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.  
   2.    Complete Schedule C, line 10, column (c), and enter the total here                 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.  
   3.    Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.  
   4.    Multiply line 3 by 65% (0.65) .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.  
   5.    Add Schedule C, lines 2, 5, 7, and 8, column (c), and the part of the deduction on Schedule C, line 3, column (c), 
         that is attributable to dividends from 20%-or-more-owned corporations .                  . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.  
   6.    Enter the sum of the amounts on Form 8993, Part III, lines 28 and 29 .                 . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6.  
   7.    Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7.  
   8.    Subtract line 7 from line 4. If zero or more, enter this amount on line 5, skip lines 9 through 15, and go to line 16. If 
         less than zero, leave line 8 blank and go to line 9        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8.  
   9.    Divide line 5 by line 7. Enter the result as a decimal (rounded to at least three places) .                  . . . . . . . . . . . . . . . . .   9.  
   10.   Subtract line 4 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10.  
   11.   Multiply line 10 by line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.  
   12.   Subtract line 11 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12.  
   13.   Subtract line 9 from 1.000    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13.  
   14.   Multiply line 13 by line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14.  
   15.   Subtract line 14 from line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15.  
   16.   Add the total amount of dividends from 20%-or-more-owned corporations that are included on Schedule C, lines 
         2, 3, 5, 7, and 8, column (a)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16.  
   17.   Subtract line 16 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17.  
   18.   Multiply line 17 by 50% (0.50) .   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18.  
   19.   Add Schedule C, lines 1, 4, and 6, column (c), and the part of the deduction on Schedule C, line 3, column (c), 
         that is not attributable to dividends from 20%-or-more-owned corporations .                    . . . . . . . . . . . . . . . . . . . . . . . .   19.  
   20.   Add line 15 (or, if line 15 is blank, line 6) and line 19      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20.  
   21.   Subtract line 20 from line 18. If zero or more, enter this amount on line 19, skip lines 22 through 28, and go to 
         line 29. If less than zero, leave line 21 blank and go to line 22          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   21.  
   22.   Divide line 19 by line 20. Enter the result as a decimal (rounded to at least three places)                    . . . . . . . . . . . . . . . .   22.  
   23.   Subtract line 18 from line 20 .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23.  
   24.   Multiply line 23 by line 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24.  
   25.   Subtract line 24 from line 19 .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25.  
   26.   Subtract line 22 from 1.000 .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26.  
   27.   Multiply line 23 by line 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27.  
   28.   Subtract line 27 from line 15 (or, if line 15 is blank, line 6) .      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28.  
   29. Dividends-received deduction after limitation (sec. 246(b)). Add line 12 (or, if line 12 is blank, line 8) and 
         line 25 (or if line 25 is blank, line 19). Enter the result here and on Schedule C, line 9, column (c) .                   . . . . . . . . . .   29.  
   30. Section 250 deduction after limitation (sec. 246(b)). Enter the amount on line 28 (or, if line 28 is blank, 
         line 15, or, if line 28 and line 15 are blank, line 6) here and on Schedule C, line 17, column (c) .                   . . . . . . . . . . . .   30.  

Line 10, Column (a).  Enter the foreign-source portion of                                           •     Include on line 11 any hybrid dividends from a controlled 
dividends that:                                                                                     foreign corporation (CFC). Hybrid dividends are generally 
• Are received from specified 10%-owned foreign corporations                                        dividends received from a CFC that would otherwise be reported 
(as defined in section 245A(b)), including gain from the sale of                                    on line 10 except the CFC receives a deduction (or other tax 
stock of a foreign corporation that is treated as a dividend for                                    benefit) with respect to any income, war profits, or excess profits 
purposes of applying section 245A under section 1248(a) and                                         taxes imposed by any foreign country or territory of the United 
(j); and                                                                                            States.
• Qualify for the 100% deduction under section 245A excluding                                       •     Also include on line 11 the corporation's share of distributions 
any hybrid dividends.                                                                               from a section 1291 fund from Form 8621, to the extent that the 
                                                                                                    amounts are taxed as dividends under section 301. See Form 
Line 11, Column (a).  Enter foreign dividends not reportable on                                     8621, Information Return by a Shareholder of a Passive Foreign 
line 3, 6, 7, 8, or 10 of column (a).

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

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Investment Company or Qualified Electing Fund, and its amounts) includible in gross income (under section 951) that are
instructions. attributable to stock of related foreign export corporations. See
Qualified export receipts. and A related foreign export
Lines 12a, 12b, and 12c, Column (a). Enter Subpart F
corporation. under Section 993, earlier, for more details.
inclusions derived from the sale by a CFC.
• Line 12a: Enter the foreign-source portion of any Subpart F Schedule E—Deductions
inclusions attributable to the sale or exchange by a CFC of stock
in another foreign corporation described in section 964(e)(4).
This should equal the U.S. shareholder's pro rata share of the Limitations on Deductions
amount reported on Form 5471, Information Return of U.S. Section 263A uniform capitalization rules. The uniform
Persons With Respect To Certain Foreign Corporations, capitalization rules of section 263A require corporations to
Schedule I, line 1a. capitalize, or include in inventory, certain costs incurred in
• Line 12b: Enter the pro rata share of Subpart F inclusions connection with the following.
attributable to hybrid dividends of tiered corporations under • The production of real property and tangible personal property
section 245A(e)(2). This should equal the U.S. shareholder's pro held in inventory or held for sale in the ordinary course of
rata share of the amount reported on Form(s) 5471, Schedule I, business.
line 1b. • Real property or personal property (tangible and intangible)
• Line 12c: Enter all other amounts included in income under acquired for resale.
section 951, which should equal the U.S. shareholder's pro rata • The production of real property and tangible personal property
share of the sum of the amounts on lines 1(c), 1(d), 1(e), 1(f), 2, by a corporation for use in its trade or business or in an activity
3, and 4 of Schedule I of Form(s) 5471. engaged in for profit.
Line 13, Column (a). Enter amounts included in income under Tangible personal property produced by a corporation
the section 951A GlLTI provision from Form 8992, Part II, line 5. includes a film, sound recording, videotape, book, or similar
If you also have a Form 5471 reporting requirement, please property.
attach Form 5471. IC-DISCs subject to the section 263A uniform capitalization
Line 15, Column (a). Include the following. rules are required to capitalize:
• Dividends (other than capital gain distributions reported on 1. Direct costs of assets produced or acquired for resale,
Schedule D (Form 1120) and exempt-interest dividends) that are and
received from RICs and that are not subject to the 50% 2. Certain indirect costs (including taxes) that are properly
deduction. allocable to property produced or property acquired for resale.
• Dividends from tax-exempt organizations.
• Dividends (other than capital gain distributions) received from For inventory, some of the indirect expenses that must be
a real estate investment trust that, for the tax year of the trust in capitalized are:
which the dividends are paid, qualifies under sections 856 • Administration expenses;
through 860. • Taxes;
• Dividends not eligible for a dividends-received deduction, • Depreciation;
which include the following. • Insurance;
1. Dividends received on any share of stock held for less • Compensation paid to officers attributable to services;
than 46 days during the 91-day period beginning 45 days before • Rework labor; and
the ex-dividend date. When counting the number of days the • Contributions to pension, stock bonus, and certain
corporation held the stock, you may not count certain days profit-sharing, annuity, or deferred compensation plans.
during which the corporation's risk of loss was diminished. See Regulations section 1.263A-1(e)(3) specifies other indirect
section 246(c)(4) and Regulations section 1.246-5 for more costs that relate to production or resale activities that must be
details. capitalized and those that may be currently deductible.
2. Dividends attributable to periods totaling more than 366 Interest expense paid or incurred during the production
days that the IC-DISC received on any share of preferred stock period of designated property must be capitalized and is
held for less than 91 days during the 181-day period that began governed by special rules. For more details, see Regulations
90 days before the ex-dividend date. When counting the number sections 1.263A-8 through 1.263A-15.
of days the IC-DISC held the stock, you may not count certain The costs required to be capitalized under section 263A are
days during which the IC-DISC's risk of loss was diminished. not deductible until the property (to which the costs relate) is
See section 246(c)(4) and Regulations section 1.246-5 for more sold, used, or otherwise disposed of by the corporation. The
details. Preferred dividends attributable to periods totaling less corporation recovers these costs through depreciation,
than 367 days are subject to the 46-day holding period rule in amortization, or cost of goods sold.
item 1.
3. Dividends on any share of stock to the extent the IC-DISC Note. A small business taxpayer (defined earlier) is not required
is under an obligation (including a short sale) to make related to capitalize costs under section 263A. A small business
payments with respect to positions in substantially similar or taxpayer that wants to discontinue capitalizing costs under
related property. section 263A must change its method of accounting. See
• Any other taxable dividend income not properly reported section 263A(i). Also see Change in accounting method, earlier.
elsewhere on Schedule C. For more details on the uniform capitalization rules, see
Line 17, Column (c). Generally, line 17, column (c), cannot Regulations sections 1.263A-1 through 1.263A-3 and Pub. 538.
exceed the amount on line 30 of the Worksheet for Schedule C, Transactions between related taxpayers. Generally, an
Lines 9 and 27. See the worksheet, earlier. However, in a year in accrual basis taxpayer may only deduct business expenses and
which an NOL occurs, the limitation in section 246(b)(1) does interest owed to a related party in the year the payment is
not apply. See sections 172(d) and 246(b). included in the income of the related party. See sections 163(e)
Line 19, Column (a). Qualified dividends are dividends that (3) and 267(a)(2) for limitations on deductions for unpaid interest
qualify as qualified export receipts. They include all dividends (or and expenses.

Instructions for Form 1120-IC-DISC (Rev. 12-2024) 11

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Golden parachute payments. A portion of the payments made officers' compensation, cost of goods sold, elective contributions
by a corporation to key personnel that exceeds their usual to a section 401(k) cash or deferred arrangement, or amounts
compensation may not be deductible. This occurs when the contributed under a salary reduction SEP agreement or a
corporation has an agreement (golden parachute) with these key SIMPLE IRA plan.
employees to pay them these excess amounts if control of the If the corporation provided taxable fringe benefits to its
corporation changes. See section 280G and Regulations section ! employees, such as personal use of a car, do not deduct
1.280G-1. Also see Line 1i. Compensation of Officers, later. CAUTION as wages the amount allocated for depreciation and
Election to deduct business start-up and organizational other expenses claimed on lines 1c and 1m.
costs. A corporation can elect to deduct a limited amount of
start-up and organizational costs it paid or incurred. Any Line 1h. Freight. Enter 50% of the freight expenses (except
remaining costs must generally be amortized over a 180-month insurance) for shipping export property aboard U.S. flagships
period. See sections 195 and 248 and the related regulations. and U.S.-owned and U.S.-operated aircraft in those cases where
Time for making an election. The corporation generally you are not required to use U.S. ships or aircraft by law or
elects to deduct start-up or organizational costs by claiming the regulations.
deduction on its income tax return filed by the due date Line 1i. Compensation of Officers. Enter deductible officers'
(including extensions) for the tax year in which the active trade or compensation on line 1i. Attach a statement showing the name,
business begins. However, for start-up or organizational costs social security number, and amount of compensation paid to all
paid or incurred before September 9, 2008, the corporation is officers. Do not include compensation deductible elsewhere on
required to attach a statement to its return to elect to deduct the return, such as amounts included in cost of goods sold,
such costs. elective contributions to a section 401(k) cash or deferred
For more details, including special rules for costs paid or arrangement, or amounts contributed under a salary reduction
incurred before September 9, 2008, see the Instructions for Form SEP agreement or a SIMPLE IRA plan.
4562. Also see the Guide to Business Expense Resources, See the Instructions for Form 1125-E for more information on
available at IRS.gov/Forms-Pubs/Guide-to-Business-Expense- officers' compensation, including any special rules and
Resources. limitations that may apply.
If the corporation timely filed its return for the year without The IC-DISC determines who is an officer under the laws of
making an election, it can still make an election by filing an the state where it is incorporated.
amended return within 6 months of the due date of the return
(excluding extensions). Clearly indicate the election on the Line 1m. Other Export Promotion Expenses. Enter any other
amended return and write "Filed pursuant to section 301.9100-2" allowable export promotion expenses not claimed elsewhere on
at the top of the amended return. File the amended return at the the return.
same address the corporation filed its original return. The Note. Do not deduct fines or penalties imposed on the IC-DISC.
election applies when figuring taxable income for the current tax
year and all subsequent years. Line 2b. Taxes and Licenses. Enter taxes paid or accrued
The corporation can choose to forgo the elections above by during the tax year, but do not include the following.
affirmatively electing to capitalize its start-up or organizational • Taxes not imposed on the corporation.
costs on its income tax return filed by the due date (including • Taxes, including state or local sales taxes, that are paid or
extensions) for the tax year in which the active trade or business incurred in connection with an acquisition or disposition of
begins. property (these taxes must be treated as part of the cost of the
acquired property or, in the case of a disposition, as a reduction
Note. The election to either amortize or capitalize start-up costs in the amount realized on the disposition).
is irrevocable and applies to all start-up costs that are related to • Taxes assessed against local benefits that increase the value
the trade or business. of the property assessed (such as for paving, etc.).
Report the deductible amount of start-up and organizational • Taxes deducted elsewhere on the return, such as those
costs and any amortization on line 2g of Schedule E. For reflected in cost of goods sold.
amortization that begins during the current tax year, complete See section 164(d) for apportionment of taxes on real
and attach Form 4562, Depreciation and Amortization. property between seller and purchaser.
Limitations on deductions related to property leased to Line 2c. Interest. Do not deduct the following interest.
tax-exempt entities. If an IC-DISC leases property to a • Interest on indebtedness incurred or continued to purchase or
governmental or other tax-exempt entity, it may not claim carry obligations if the interest is wholly exempt from income tax.
deductions related to the property to the extent that they exceed For exceptions, see section 265(b).
the IC-DISC's income from the lease payments (tax-exempt-use • For cash basis taxpayers, prepaid interest allocable to years
loss). Amounts disallowed may be carried over to the next tax following the current tax year (for example, a cash basis calendar
year and treated as a deduction with respect to the property for year taxpayer who in the current tax year prepaid interest
that tax year. See section 470 for exceptions. allocable to any period after the current tax year may deduct only
Contributions. See the Instructions for Form 1120 and Pub. the amount allocable to the current tax year).
542 for limitations that apply to contributions. • Interest on debt allocable to the production of designated
property by a corporation for its own use. The corporation must
Line 1. Export Promotion Expenses. Enter export promotion capitalize this interest. Also capitalize any interest on debt
expenses on lines 1a through 1m. Export promotion expenses allocable to an asset used to produce the property. See section
are an IC-DISC's ordinary and necessary expenses paid or 263A(f) and Regulations sections 1.263A-8 through 1.263A-15
incurred to obtain qualified export receipts. Do not include for definitions and more information.
income taxes. Enter on lines 2a through 2g any part of an Special rules apply to the following.
expense not incurred to obtain qualified export receipts. • Forgone interest on certain below-market-rate loans (see
Line 1d. Salaries and Wages. Enter the total salaries and section 7872).
wages paid for the tax year. Do not include salaries and wages • Original issue discount on certain high-yield discount
deductible elsewhere on the return, such as amounts included in obligations. See section 163(e) to figure the disqualified portion.

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

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• Interest which is allocable to unborrowed policy cash values of   Line 9. Deemed Distributions to C Corporations.       Line 9 
life insurance, endowment, or annuity contracts issued after        provides for the computation of the one-seventeenth deemed 
June 8, 1997. See section 264(f). Attach a statement showing        distribution of section 995(b)(1)(F)(i). Line 9 only applies to 
the computation of the deduction.                                   shareholders of the IC-DISC that are C corporations.
Line 2d. Charitable Contributions. For more information on          Line 10. International Boycott Income.     An IC-DISC is 
charitable contributions, including substantiation and              deemed to distribute any income that resulted from cooperating 
recordkeeping requirements, see section 170 and the related         with an international boycott (section 995(b)(1)(F)(ii)). See Form 
regulations and Pub. 526. For limitations on deduction and other    5713, International Boycott Report, to figure this deemed 
special rules that apply to corporations, see the Instructions for  distribution and for reporting requirements for any IC-DISC with 
Form 1120 and Pub. 542.                                             operations related to a boycotting country.
Line 2e. Freight.  Enter freight expense not deducted on line 1h    Line 11. Illegal Bribes, etc. An IC-DISC is deemed to 
as export promotion expense.                                        distribute the amount of any illegal payments, such as bribes or 
Line 2g. Other Expenses.   Enter any other allowable deduction      kickbacks, that it pays, directly or indirectly, to government 
not claimed on line 1 or lines 2a through 2f.                       officials, employees, or agents (section 995(b)(1)(F)(iii)).
  The IC-DISC may have to report a negative section 481(a)          Line 14. Earnings and Profits. Attach a computation showing 
adjustment on line 2g. See Section 481(a) adjustment earlier, for   the earnings and profits for the tax year. See section 312 for 
additional information.                                             rules on figuring earnings and profits for the purpose of the 
  Generally, a deduction may not be taken for any amount that       section 995(b)(1) limitation.
is allocable to a class of exempt income. See section 265(b) for    Line 17. Foreign Investment Attributable to Producer’s 
exceptions.                                                         Loans. For purposes of lines 17a and 17b, foreign investment in 
                                                                    producer's loans is the smallest of (1) the net increase in foreign 
Note. Do not deduct fines or penalties paid to a government for     assets by members of the controlled group (defined in section 
violating any law.                                                  993(a)(3)) to which the IC-DISC belongs, (2) the actual foreign 
  For more information on other deductions that may apply to        investment by the group's domestic members, or (3) the 
corporations, see the Guide to Business Expense Resources,          IC-DISC's outstanding producer's loans to members of the 
available at IRS.gov/Forms-Pubs/Guide-to-Business-Expense-          controlled group.
Resources.                                                          Net increase in foreign assets and actual foreign investment 
                                                                    are defined in sections 995(d)(2) and (3).
Schedule J—Deemed and Actual 
                                                                    See Regulations section 1.995-5 for additional information on 
Distributions and Deferred DISC                                     figuring foreign investment attributable to producer's loans.
                                                                    Line 17a. For shareholders other than C corporations.            To 
Income for the Tax Year                                             figure the amount for line 17a, attach a computation showing (1) 
                                                                    the IC-DISC's foreign investment in producer's loans during the 
Part I—Deemed Distributions Under Section                           tax year; (2) accumulated earnings and profits (including 
995(b)(1)                                                           earnings and profits for the current tax year) minus the amount 
                                                                    on Part I, line 15; and (3) accumulated IC-DISC income. Enter 
Line 2. Recognized Gain on Section 995(b)(1)(B) Property. 
                                                                    the smallest of these amounts (but not less than zero) on 
Enter gain recognized during the tax year on the sale or 
                                                                    line 17a.
exchange of property, other than property which in the hands of 
the IC-DISC was a qualified export asset, previously transferred    Line 17b. For C corporation shareholders.  To figure the 
to the IC-DISC in a transaction in which the transferor realized    amount for line 17b, attach a computation showing (1) the 
gain but did not recognize the gain in whole or in part. See        IC-DISC's foreign investment in producer's loans during the tax 
section 995(b)(1)(B). Show the computation of the gain on a         year; (2) accumulated earnings and profits (including earnings 
separate statement. Include no more of the IC-DISC's gain than      and profits for the current tax year) minus the amount on Part I, 
the amount of gain the transferor did not recognize on the earlier  line 16; and (3) accumulated IC-DISC income. Enter the smallest 
transfer.                                                           of these amounts (but not less than zero) on line 17b.
Line 3. Recognized Gain on Section 995(b)(1)(C) Property.           Lines 20 and 21. The percentages on lines 20 and 21 must 
Enter gain recognized on the sale or exchange of property           add up to 100%.
described in section 995(b)(1)(C). Show the computation of the      Line 22. Allocate the line 22 amount to shareholders that are 
gain on a separate statement. Do not include any gain included      individuals, partnerships, S corporations, trusts, and estates.
in the computation of line 2. Include only the amount of the 
IC-DISC's gain that the transferor did not recognize on the earlier Part II—Section 995(b)(1)(E) Taxable Income
transfer and that would have been treated as ordinary income if     Generally, any taxable income of the IC-DISC attributable to 
the property had been sold or exchanged rather than transferred     qualified export receipts that exceed $10 million will be deemed 
to the IC-DISC. Do not include gain on the sale or exchange of      distributed.
IC-DISC stock-in-trade or other property that either would be 
included in inventory if on hand at the end of the tax year or is   Line 1. Export Receipts. If there were no commission sales, 
held primarily for sale in the normal course of business.           leases, rentals, or services for the tax year, enter on Part II, 
                                                                    line 1, the total of lines 1c and 2k, column (e), of Schedule B.
Line 4. Income Attributable to Military Property. Enter 50% 
of taxable income attributable to military property (section 995(b) If there were commission sales, leases, rentals, or services 
(1)(D)). Show the computation of this income. To figure taxable     for the tax year, the total qualified export receipts to be entered 
income attributable to military property, use the gross income      on Part II, line 1, are figured as follows (section 993(f)):
attributable to military property for the year and the deductions 
properly allocated to that income. See Regulations section 
1.995-6.

Instructions for Form 1120-IC-DISC (Rev. 12-2024)                                                                                    13

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twice the number of years the corporation was a DISC or
Line 1, Export Receipts Worksheet IC-DISC).

1. Add lines 1c and 2k, column (b), Schedule B . . . . Part IV—Actual Distributions
2. Add lines 1c and 2k, column (d), Schedule B . . . .
3. Add lines 1 and 2. Enter on Schedule J, Part II, Line 1. Distributions To Meet Qualification Requirements
line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . Under Section 992(c). If the corporation is required to pay
interest under section 992(c)(2)(B) on the amount of a
Line 3. Controlled Group Allocation. If the IC-DISC is a distribution to meet the qualification requirements of section
member of a controlled group (as defined in section 993(a)(3)) 992(c), report this interest on Schedule E, line 2c. Also include
that includes more than one IC-DISC, only one $10 million limit is the amount on Schedule J, Part IV, line 1, and show the
allowed to the group. If an allocation is required, a statement computation of the interest on an attached statement.
showing each member's portion of the $10 million limit must be Line 4a. Previously Taxed Income. Report on line 4a all actual
attached to Form 1120-IC-DISC. See Proposed Regulations distributions of previously taxed income. Also, include any
section 1.995-8(f) for details. distributions of pre-1985 accumulated DISC income that are
Lines 4 and 5. Proration of $10 Million Limit. The $10 million nontaxable (see the Line 12. Accumulated Pre-1985 DISC
limit (or the controlled group member's share) is prorated on a Income, later). Enter on the dotted line to the left of the line 4a
daily basis. Thus, for example, if, for its 2019 calendar tax year, amount the dollar amount of the distribution that is nontaxable
an IC-DISC has a short tax year of 73 days, and it is not a pre-1985 DISC income and identify it as such. Do not include
member of a controlled group, the limit that would be entered on distributions of pre-1985 DISC income that are made under
Part II, line 5, is $2 million (73/365 times $10 million). section 995(b)(2) because of prior-year revocations or
disqualifications.
Line 7. Taxable Income. Enter the taxable income attributable
to line 6, qualified export receipts. The IC-DISC may select the Part V—Deferred DISC Income Under Section
qualified export receipts to which the line 5 limitation is allocated. 995(f)(3)
See Proposed Regulations section 1.995-8 for details on In general, deferred DISC income is:
determining the IC-DISC's taxable income attributable to
qualified export receipts in excess of the $10 million amount. 1. Accumulated IC-DISC income (for periods after 1984) of
Special rules are provided for allocating the taxable income the IC-DISC as of the close of the computation year, over
attributable to any related and subsidiary services, and for the 2. The amount of distributions-in-excess-of-income for the
ratable allocation of the taxable income attributable to the first tax year of the IC-DISC following the computation year.
transaction selected by the IC-DISC that exceeds the $10 million
amount. Deductions must be allocated and apportioned Note. For purposes of item 2, distributions-in-excess-of-income
according to the rules of Regulations section 1.861-8. The means the excess (if any) of:
selection of the excess receipts by the IC-DISC is intended to • Actual distributions to shareholders out of accumulated
permit the IC-DISC to allocate the $10 million limitation to the IC-DISC income, over
qualified export receipts of those transactions occurring during • The amount of IC-DISC income (as defined in section 996(f)
the tax year that permit the greatest amount of taxable income to (1)) for the tax year following the computation year.
be allocated to the IC-DISC under the intercompany pricing rules
of section 994. Note. For purposes of items 1 and 2, see section 995(f) and
Proposed Regulations section 1.995(f)-1 for a definition of
To avoid double counting of the deemed distribution, if an computation year, examples, and other details on figuring
amount of taxable income for the tax year attributable to excess deferred DISC income.
qualified export receipts is also deemed distributed under either
line 1, 2, 3, or 4 of Part I, such amount of taxable income is only The amount on Part V, line 3, is allocated to each shareholder
includible on that line of Part I, and must be subtracted from the on Part III, line 10, of Schedule K (Form 1120-IC-DISC).
amount otherwise reportable on Part II, line 7, and carried to Part Shareholders of an IC-DISC must file Form 8404 if the
I, line 5. See Proposed Regulations section 1.995-8(d). IC-DISC reports deferred DISC income on Schedule K, Part III,
After filing the IC-DISC's current year tax return, the allocation line 10.
of the $10 million limitation and the computation of the line 7
deemed distribution may be changed by filing an amended Form Schedule K (Form
1120-IC-DISC only under the conditions specified in Proposed
Regulations section 1.995-8(b)(1). 1120-IC-DISC)—Shareholder's
Statement of IC-DISC Distributions
Part III—Deemed Distributions Under Section
Attach a separate Copy A, Schedule K (Form 1120-IC-DISC), to
995(b)(2) Form 1120-IC-DISC for each shareholder who received an
If the corporation is a former DISC or a former IC-DISC that actual or deemed distribution during the tax year or to whom the
revoked IC-DISC status or lost IC-DISC status for failure to corporation reported deferred DISC income for the tax year.
satisfy one or more of the conditions specified in section 992(a)
(1) for the current tax year, each shareholder is deemed to have For more information, see the Instructions for IC-DISC on the
received a distribution taxable as a dividend on the last day of back of Copy C, Schedule K (Form 1120-IC-DISC).

the current tax year. The deemed distribution equals the Schedule L—Balance Sheets per
shareholder's prorated share of the DISC's or IC-DISC's income
accumulated during the years just before DISC or IC-DISC Books
status ended. The shareholder will be deemed to receive the The balance sheet should agree with the IC-DISC's books and
distribution in equal parts on the last day of each of the 10 tax records. Include certificates of deposits as cash on line 1.
years of the corporation following the year of the termination or
disqualification of the IC-DISC (but in no case over more than Line 12. Accumulated Pre-1985 DISC Income. If the
corporation was a qualified DISC as of December 31, 1984, the
accumulated pre-1985 DISC income will generally be treated as

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

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previously taxed income (exempt from tax) when distributed to • A citizen or resident of the United States, which includes the
DISC shareholders after December 31, 1984. Commonwealth of Puerto Rico and other territories of the United
States;
Exception. The exemption does not apply to distributions of • A domestic corporation or partnership; or
accumulated pre-1985 DISC income of an IC-DISC or former • An estate or trust (other than a foreign estate or trust as
DISC that was made taxable under section 995(b)(2) because of defined in section 7701(a)(31)).
a prior revocation of the DISC election or disqualification of the
DISC. For more details on these distributions, see Temporary Column (a). Export gross receipts of the IC-DISC. All
Regulations section 1.921-1T(a)(7). IC-DISCs should complete column (a) in line 2. If two or more
IC-DISCs are related persons, only the IC-DISC with the largest
Line 13. Accumulated IC-DISC Income. Accumulated export gross receipts should complete columns (b) and (c). If an
IC-DISC income (for periods after 1984) is accounted for this IC-DISC acts as a commission agent for a related person,
line. The balance of this account is used in figuring deferred attribute the total amount of the transaction to the IC-DISC.
DISC income in Part V of Schedule J. Complete column (a) to report the IC-DISC's export gross
receipts from all sources (including the United States) for the
Schedule N—Export Gross Receipts current tax year.
of the IC-DISC and Related U.S. Column (b). Related IC-DISCs. Complete column (b) to report
Persons related IC-DISCs' export gross receipts from all sources
(including the United States).
Line 1. Product Code and Percentage. Enter on line 1a the
code number and percentage of total export gross receipts Column (c). All other related U.S. persons. Complete
(defined under Line 2, Export gross receipts for the current tax column (c) to report other related U.S. persons' export gross
year, later) for the product or service that accounts for the largest receipts from all sources except the United States.
portion of the IC-DISC's export gross receipts. The product Line 3. Related U.S. Persons. Enter on line 3 the name,
codes are at the end of these instructions. On line 1b, enter the address, and identifying number of related U.S. persons in your
same information for the IC-DISC's next largest product or controlled group.
service.
Example. An IC-DISC has export gross receipts of $10 Schedule O—Other Information
million. Selling agricultural chemicals accounts for $4.5 million Question 6. Boycott of Israel. If question 6a, 6b, or 6c is
(45% (0.45)) of that amount, which is the IC-DISC's largest checked “Yes,” the IC-DISC must file Form 5713 and is also
product or service. The IC-DISC should enter “287” (the product deemed to distribute part of its income. See Form 5713 for more
code for agricultural chemicals) and “45%” on line 1a. information.
Selling industrial chemicals accounts for $2 million (20% Question 7. Limitation on business interest expense. For
(0.20) of the $10 million total) and is the IC-DISC's tax years beginning after 2017, the limitation on business
second-largest product or service. The IC-DISC should enter interest expense applies to every taxpayer with a trade or
“281” (the product code for industrial inorganic and organic business, unless the taxpayer meets certain specified
chemicals) and “20%” on line 1b. exceptions. A taxpayer may elect out of the limitation for certain
Line 2. Export gross receipts for the current tax year. businesses otherwise subject to the business interest expense
Export gross receipts are receipts from any of the following. limitation.
• Providing engineering or architectural services for Certain real property trades or businesses and farming
construction projects located outside the United States. businesses qualify to make an election not to limit business
• Selling for direct use, consumption, or disposition outside the interest expense. This is an irrevocable election. If you make this
United States, property (such as inventory) produced in the election, you are required to use the alternative depreciation
United States. system to depreciate any property with a recovery period of 10
• Renting this property to unrelated persons for use outside the years or more. Also, you are not entitled to the special
United States. depreciation allowance for that property. For a taxpayer with
• Providing services involved in such a sale or rental. more than one qualifying business, the election is made with
• Providing export management services. respect to each business.
For commission sales, export gross receipts include the total Check “Yes” if the taxpayer has an election in effect to
receipts on which the IC-DISC earned the commission. exclude a real property trade or business or a farming business
For purposes of line 2, Schedule N only, no reduction is to be from section 163(j). For more information, see section 163(j) and
made for receipts attributable to military property. Therefore, an the Instructions for Form 8990.
IC-DISC's export gross receipts for purposes of line 2 include the Question 8. Form 8990. Generally, a taxpayer with a trade or
total of the amounts from Schedule B, columns (b) and (d) of business must file Form 8990, Limitation on Business Interest
lines 1c, 2a, 2b, 2c, and 2d. Expense Under Section 163(j), to claim a deduction for business
Related persons are: interest. In addition, Form 8990 must be filed by any taxpayer
• An individual, partnership, estate, or trust that controls the that owns an interest in a partnership with current year, or prior
IC-DISC; year carryover, excess business interest expense allocated from
• A corporation that controls the IC-DISC or is controlled by it; the partnership.
or Exclusions from filing. A taxpayer is not required to file
• A corporation controlled by the same person or persons who Form 8990 if the taxpayer is a small business taxpayer and does
control the IC-DISC. not have excess business interest expense from a partnership. A
Control means direct or indirect ownership of more than 50% taxpayer is also not required to file Form 8990 if the taxpayer
of the total voting power of all classes of stock entitled to vote. only has business interest expense from these excepted trades
See section 993(a)(3). or businesses:
U.S. person is: • An electing real property trade or business,
• An electing farming business, or

Instructions for Form 1120-IC-DISC (Rev. 12-2024) 15

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• Certain utility businesses. dividends received as a shareholder in a mutual fund or other
Small business taxpayer. A small business taxpayer is not RIC.
subject to the business interest expense limitation and is not Question 10. Foreign owner. If the answer to question 10(a) or
required to file Form 8990. A small business taxpayer is a 10(b) is "Yes," enter on line 10(b)a the percentage owned. On
taxpayer that (a) is not a tax shelter (as defined in section 448(d) line 10(b)b, enter the owner's country, and on line 10(b)c, if Form
(3)), and (b) meets the gross receipts test of section 448(c), 5472, Information Return of a 25% Foreign-Owned U.S.
discussed next. Corporation Engaged in a U.S. Trade or Business, is filed by the
Gross receipts test. A taxpayer meets the gross receipts corporation, enter the number of Forms 5472 attached.
test if the taxpayer has average annual gross receipts of the
annual threshold amount listed in section 3.31 of the Revenue Schedule P (Form
Procedure for the tax year of the return being filed or less for the
3 prior tax years. A taxpayer's average annual gross receipts for 1120-IC-DISC)—Intercompany
the 3 prior tax years is determined by adding the gross receipts
for the 3 prior tax years and dividing the total by 3. Gross Transfer Price or Commission
receipts include the aggregate gross receipts from all persons Complete and attach a separate Schedule P (Form
treated as a single employer, such as a controlled group of 1120-IC-DISC) for each transaction or group of transactions to
corporations, commonly controlled partnerships, or which you apply the intercompany pricing rules of section 994(a)
proprietorships, and affiliated service groups. See section 448(c) (1) and (2).
and the Instructions for Form 8990 for additional information. For more information, see the instructions for Schedule P
Question 9. Tax-exempt interest. Report any tax-exempt (Form 1120-IC-DISC).
interest received or accrued. Include any exempt-interest

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

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

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Form 1120-IC-DISC Codes for Principal Business Activity

This list of principal business activities and their associated codes is                       total gross receipts is derived. Total receipts means all income (line
designed to classify an enterprise by the type of activity in which it is                      1, page 1).
engaged to facilitate the administration of the Internal Revenue                               On page 6, Schedule O, line 1, enter the principal business activity
Code. These principal business activity codes are based on the                                 and principal product or service that account for the largest
North American Industry Classication System. Certain activities,                              percentage of total receipts. For example, if the principal activity is
such as manufacturing, do not apply to an IC-DISC.                                             “Wholesale Trade Durable Goods: Machinery, Equipment, &
Using the list below, enter on page 1, item B, the code number for                             Supplies,” the principal product or service may be “Engines and
the specic industry group from which the largest percentage of                                Turbines.”
Wholesale Trade                                            Code                                Code                                      Rental and Leasing
Code                                                       424210 Drugs & Druggists’ Sundries  Motion Picture and Sound                  Code
Merchandise Wholesalers, Durable                           424300 Apparel, Piece Goods, &      Recording Industries                      Rental and Leasing Services
                                                                Notions                        512100 Motion Picture & Video
Goods                                                      424400 Grocery & Related Products            Industries (except video         532100 Automotive Equipment Rental
423100 Motor Vehicle & Motor                               424500 Farm Product Raw Materials            rental)                                & Leasing
        Vehicle Parts & Supplies                           424600 Chemical & Allied Products   512200 Sound Recording Industries         532210 Consumer Electronics &
423200 Furniture & Home Furnishings                        424700 Petroleum & Petroleum                                                        Appliances Rental
                                                                                               Broadcasting (except Internet)            532281 Formal Wear & Costume
423300 Lumber & Other Construction                              Products                       515100 Radio & Television                       Rental
        Materials                                          424800 Beer, Wine, & Distilled               Broadcasting                     532282 Video Tape & Disc Rental
423400 Professional & Commercial                                Alcoholic Beverage             515210 Cable & Other Subscription         532283   Home Health Equipment
        Equipment & Supplies                               424910 Farm Supplies                         Programming                            Rental
423500 Metal & Mineral (except                             424920 Book, Periodical, &                                                    532284   Recreational Goods Rental
        Petroleum)                                              Newspapers                     Telecommunications                        532289   All Other Consumer Goods
423600 Household Appliances &Electrical & Electronic Goods 424930 Flower, Nursery Stock, &     517000 Telecommunications                       Rental
423700 Hardware, Plumbing &                                     Florists’ Supplies                      (including paging, cellular,     532310 General Rental Centers
        Heating Equipment, & Supplies                      424940 Tobacco & Tobacco Products            satellite, cable & other         532400 Commercial & Industrial
423800 Machinery, Equipment, &                             424950 Paint, Varnish, & Supplies            program distribution,                  Machinery & Equipment
        Supplies                                           424990 Other Miscellaneous                   resellers, other                       Rental & Leasing
423910 Sporting & Recreational Goods                            Nondurable Goods                        telecommunications, &
                                                                                                        internet service providers)
        & Supplies                                         Information                                                                   Professional Services
423920 Toy & Hobby Goods & Supplies                        Publishing Industries (except       Data Processing Services                  Architectural, Engineering, and
423930 Recyclable Materials                                Internet)                           518210 Data Processing, Hosting, &        Related Services 
423940 Jewelry, Watch, Precious                            511110 Newspaper Publishers                  Related Services                 541310 Architectural Services
        Stone, & Precious Metals                           511120 Periodical Publishers        Other Information Services                541320 Landscape Architecture
423990 Other Miscellaneous Durable                         511130 Book Publishers              519100 Other Information Services               Services
        Goods                                              511140 Directory & Mailing List              (including news syndicates,      541330 Engineering Services
Merchandise Wholesalers,                                        Publishers                              libraries, internet publishing & 541340 Drafting Services
Nondurable Goods                                           511190 Other Publishers                      broadcasting)                    541350 Building Inspection Services
424100 Paper & Paper Products                              511210 Software Publishers                                                    541360 Geophysical Surveying &
                                                                                                                                               Mapping Services
                                                                                                                                         541370 Surveying & Mapping (except
                                                                                                                                               Geophysical) Services
                                                                                                                                         541380 Testing Laboratories
                                                                                                                                         Other Professional Services
                                                                                                                                         541600 Management, Scientic, & 
                                                                                                                                               Technical Consulting Services

Schedule P (Form 1120-IC-DISC) Codes for Principal Business Activity
(These codes are used only with Schedule P (Form 1120-IC-DISC)).                                  Using the list below, enter the code for the specic industry group 
These codes for the Principal Business Activity are designed to                                and product or product line for each Schedule P completed.
classify enterprises by the type of activity in which they are engaged
to facilitate the administration of the Internal Revenue Code. Certain
activities such as manufacturing do not apply to an IC-DISC.
Transportation,                                            Code                                Retail Trade                              Finance, Insurance, and Real
Communication, Electric,                                   5040 Sporting, recreational,        Code                                      Estate
Gas, and Sanitary Services                                      photographic, and hobby        Building materials, hardware, garden      Code
Code                                                            goods, toys, and supplies      supply, mobile home dealers,
Transportation                                             5050 Metals and minerals, except    general merchandise, and food             Credit agencies other than banks
4400 Water transportation                                       petroleum and scrap            stores                                    6199 Other credit agencies
4700 Other transportation services                         5060 Electrical goods               5220 Building materials dealers
                                                           5070 Hardware, plumbing and heating 5251 Hardware stores                      Services
Electric, gas, and sanitary services                            equipment                      5265 Garden supplies and mobile           Business services
4910 Electric services                                     5098NondurableOther durable goods   5300 General merchandise stores           7389 Export management services
                                                                                                        home dealers
4920 Gas production and distribution
4930 Combination utility services                          5110 Paper and paper products       5410 Grocery stores                       Auto repair and services;
                                                           5129 Drugs, drug proprietaries, and 5490 Other food stores                    miscellaneous repair services
Wholesale Trade                                                 druggists’ sundries            Automotive dealers and service            7500 Lease or rental of motor
Durable                                                    5130 Apparel, piece goods, and      stations                                        vehicles
5008 Machinery, equipment, and                                  notions                        5515 Motor vehicle dealers
        supplies                                           5140 Groceries and related products 5541 Gasoline service stations            Amusement and recreation services
5010 Motor vehicles and automotive                         5150 Farm-product raw materials     5598 Other automotive dealers             7812 Motion picture production,
        equipment                                          5160 Chemicals and allied products  5600 Apparel and accessory stores               distribution, and services
5020 Furniture and home furnishings                        5170 Petroleum and petroleum        5700 Furniture and home furnishings       Other services
5030 Lumber and construction                                    products                                stores                           8911 Architectural and engineering
        materials                                          5180 Alcoholic beverages            5800 Eating and drinking places                 services
                                                           5190 Miscellaneous nondurable       Miscellaneous retail stores               8930 Accounting, auditing, and
                                                                goods                          5912 Drug stores and proprietary                bookkeeping
                                                                                                        stores                           8980 Miscellaneous services
                                                                                               5921 Liquor stores
                                                                                               5995 Other miscellaneous retail stores

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Schedule N Product Code System
(These codes are used only with Schedule N, page 6, Form 1120-IC-DISC.)
Using the list below, enter on line 1 of Schedule N the product code number and percent of export gross receipts as explained in
the Speciﬁc Instructions.
This product code system is divided into two categories—nonmanufactured product groups and services, and manufactured
product groups.
Code                                                    Code                                                   Code
Nonmanufactured Product Groups and Services             Furniture and ﬁxtures                                  Fabricated metal products (except ordnance, 
011  Grains, including soybeans                         251  Household furniture                               machinery and transportation)
012  Vegetables and melons                              252  Ofce furniture                                   341 Metal cans
013  Fruit and tree nuts                                253  Public building and related furniture             342 Cutlery, hand tools, and general hardware
014  Greenhouse, nursery, and oriculture               259  Other furniture and xtures                       343 Heating apparatus (except electric) and plumbing
015  Cotton                                                                                                        xtures
019  Other crops (including sugar beets, peanuts,       Paper and allied products                              344 Fabricated structural metal products
     spices, hops, and vegetable seeds)                 261  Pulp                                              345 Screw machine products and bolts, nuts, screws,
021  Livestock                                          262  Newsprint                                             rivets, and washers
022  Poultry and eggs                                   263  Business machine paper                            346 Metal stampings
023  Fishery products and services (including shellsh) 264  Stationery and ofce supplies (including pens     347 Coated and engraved metal products
024  Fur bearing animals and unnished hides                 and pencils)                                      349 Other fabricated metal products
029                                                     265
     Iron ores                                               Paper bags and coated and treated paper
101  Other animal products                              266  Paperboard (including containers and boxes)       Machinery (except electrical and electronic)
102  Precious metals (including gold and silver)             (including wallpaper and gift wrap)               351 Engines and turbines
103  Other ores                                         269  Other paper and allied products                   352 Farm machinery and equipment
110  Coal mining products                                                                                      353 Construction, mining, and materials handling
130  Secondary petroleum and natural gas products       Printed media                                              machinery and equipment
147  Nonmetallic mineral products and services          271  Newspapers                                        354 Metalworking machinery and equipment
     (including limestone, sulfur, and fertilizer)      272  Periodicals                                       355 Special industry machinery (except metalworking
148  Sand, gravel, and clay                             273  Books                                                 machinery)
730  Export management services                         274  Greeting cards                                    356 General industrial machinery and equipment
737  Computer software                                  275  Manifold business forms                           357 Service industry machinery
780  Motion picture distribution                        279  Other printed media                               359 Other machinery (except electrical and electronic)
850  Engineering and architectural services
988  Leasing--other property (except aircraft)          Chemicals and allied products                          Electrical and electronic machinery, equipment, and
990  Other nonmanufactured products                     281  Industrial inorganic and organic chemicals        supplies
Manufactured Product Groups                             282  Plastics materials, synthetic resins, synthetic   361 Electric power transmission and distribution
                                                             rubber, and synthetic bers                           equipment (including transformers, motors and
Ordnance and accessories                                283  Drugs                                                 generators)
191  Guns, howitzers, mortars, and related equipment    284  Soap, detergents, and cleaning preparations,      362 Electrical ofce equipment (including
192  Ammunition (except small arms)                          perfumes, cosmetics, and toiletries                   photocopying machines and calculators)
194  Sighting and re control equipment                 285  Paints, varnishes, lacquers, enamels, and allied  363 Household appliances
195  Small arms                                              products                                          364 Electric lighting and wiring equipment
196  Small arms ammunition                              286  Gum and wood chemicals                            365 Audio and video equipment (except
199  Other ordnance and accessories                     287  Agricultural chemicals                                communication types)
                                                        289  Other chemicals and allied products               366 Communication equipment
Food and kindred products                                                                                      367 Semiconductors, capacitors, resistors, and other
201  Meat products                                      Reﬁned petroleum and related products                      electronic components
202  Dairy products                                     291  Rened petroleum                                  368 Computer and peripheral equipment
203  Fruits, vegetables, and seafood                    295  Paving and roong materials                       369 Other electrical and electronic machinery,
204  Grain mill products                                299  Other petroleum and related products                  equipment, and supplies
205  Bakery products                                                                                           Transportation equipment
206  Sugar                                              Rubber and plastics products
207  Confectionery and related products                 301  Tires and inner tubes                             371 Motor vehicles and motor vehicle equipment
208  Beverages                                          302  Rubber footwear                                   372 Aircraft and aircraft parts and equipment
209  Other food and kindred products                    303  Reclaimed rubber                                  373 Leased aircraft
Tobacco products                                        306  Fabricated rubber products                        374 Ships and nautical equipment
                                                        309  Other rubber and plastics products                375 Railroad equipment
211  Cigarettes                                                                                                376 Motorcycles, bicycles, and parts
212  Cigars                                             Leather and leather products                           378 Tanks and tank components
213  Tobacco (chewing and smoking) and snuff            311  Tanned and nished leather                        379 Other transportation equipment
Textile mill products                                   312  Industrial leather belting and packing            Professional, scientiﬁc, and controlling instruments;
                                                        313  Boot and shoe cut stock and ndings               photographic and optical goods; watches and clocks
221                                                     314
222  Broad woven cotton fabrics                         315  Leather footwear                                  381 Engineering, laboratory, and scientic and
223  Broad woven synthetic bers and silk fabrics       316  Leather gloves and mittens                        382 research instruments and associated equipment
224  Broad woven wool fabrics                           317  Leather luggage                                       Instruments for measuring, controlling, and
225  Narrow fabrics                                          Leather handbags and other personal leather           indicating physical characteristics
226  Knit fabrics                                       319  goods                                             383 Optical instruments, lenses, binoculars,
     Carpets and rugs
227  Dyed and nished textiles                               Other leather and leather products                    microscopes, telescopes, and prisms
228  Yarns and threads                                  Stone, clay, glass, and concrete products              384 Surgical, medical, and dental instruments and
229  Other textile goods                                321  Flat glass                                        385 supplies
Apparel and other ﬁnished goods                         322  Glass and glassware, pressed and blown            386 Ophthalmic goods
                                                        323  Glass products, made or purchased glass               Photographic equipment and supplies
231  Men’s and boys’ clothing and furnishings           324  Cement, hydraulic                                 387 Watches and clocks
233  Women’s, children’s, and infants’ clothing and     325  Structural clay products                          Other manufactured products
                                                        326
238  accessories (including fur goods and millinery)    327  Pottery and related products                      391 Jewelry, silverware, and plated ware
239  Footwear (except rubber and leather)               328  Concrete, gypsum, and plaster products            393 Musical instruments
     Other apparel and accessories                      329  Cut stone and stone products                      394 Toys, amusement, sporting, and athletic goods
Lumber and wood products (except furniture)                  Abrasive, asbestos, and other nonmetallic mineral 395 Artists’ materials
                                                             products                                              Costume jewelry, costume novelties, buttons,
241  Logs and log products                              Primary and secondary nonfabricated metal products     396 and other notions (except precious metal)
243  Lumber construction materials (including                                                                  399 Other manufactured products
     millwork, veneer, plywood and prefabricated        331  Iron and steel products
     structural wood products)                          332  Nonferrous metal products
244  Wooden containers                                  339  Other primary and secondary nonfabricated metal
249  Other lumber and wood products                          products

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