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Report so-called dividends or

allowed the deduction provided in

Worksheet for Schedule C, line 9

earnings received from mutual

section 247 for dividends paid.

(keep for your records)

savings banks, etc., as interest. Do

Line 6, Column (a). Enter the

not treat them as dividends.

U.S.-source portion of dividends that:

1. Refigure line 28, page 1, Form 990-C,

Line 2, Column (a). Enter on line 2:

Are received from

without any adjustment under section

1059 and without any capital loss

Dividends (except those received

less-than-20%-owned foreign

carryback to the tax year under

on debt-financed stock acquired after

corporations and

section 1212(a)(1) ..............................

2. Complete lines 10 and 11, column (c)

July 18, 1984) that are received from

Qualify for the 70% deduction

and enter the total here......................

20%-or-more-owned domestic

under section 245(a).

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

4. Multiply line 3 by 80% ........................

corporations subject to income tax

To qualify for the 70% deduction, the

5. Add lines 2, 5, 7, and 8, column (c)

and that are subject to the 80%

cooperative must own at least 10%

and the portion of the deduction on

line 3, column (c) that is attributable

deduction under section 243(c) and

of the stock of the foreign corporation

to dividends received from

Taxable distributions from an

by vote and value.

20%-or-more-owned corporations ......

6. Enter the smaller of line 4 or line 5.

IC-DISC or former DISC that are

Also include dividends received

If line 5 is greater than line 4, stop

considered eligible for the 80%

from a less-than-20%-owned FSC

here; enter the amount from line 6 on

line 9, column (c). Do not complete

deduction.

that:

the rest of this worksheet

Line 3, Column (a). Enter dividends

7. Enter the total amount of dividends

Are attributable to income treated

received from 20%-or-more-owned

that are:

as effectively connected with the

corporations that are included on

lines 2, 3, 5, 7, and 8, column (a)......

Received on debt-financed stock

conduct of a trade or business within

8. Subtract line 7 from line 3 ..................

the United States (excluding foreign

acquired after July 18, 1984, that are

9. Multiply line 8 by 70% ........................

10. Subtract line 5 from line 9, column (c) .

received from domestic and foreign

trade income) and

11. Enter the smaller of line 9 or line 10..

corporations subject to income tax

Qualify for the 70% deduction

12. Dividends-received deduction after

limitation (section 246(b)). Add lines

and that would otherwise be subject

provided in section 245(c)(1)(B).

6 and 11. Enter the result here and

to the dividends-received deduction

Line 7, Column (a). Enter the

on line 9, column (c)...........................

under sections 243(a)(1), 243(c), or

U.S.-source portion of dividends that

Line 10, Column (a). Enter

245(a). Generally, debt-financed

are received from

dividends from FSCs that are

stock is stock that the cooperative

20%-or-more-owned foreign

attributable to foreign trade income

acquired by incurring a debt (e.g., it

corporations and that qualify for the

and that are eligible for the 100%

borrowed money to buy the stock).

80% deduction under section 245(a).

deduction provided in section

Received from a regulated

Also include dividends received from

245(c)(1)(A).

investment company (RIC) on

a 20%-or-more-owned FSC that:

Line 11, Columns (a) and (c). Enter

debt-financed stock. The amount of

Are attributable to income treated

only those dividends that qualify

dividends eligible for the

as effectively connected with the

under section 243(b) for the 100%

dividends-received deduction is

conduct of a trade or business within

dividends-received deduction

limited by section 854(b). The

the United States (excluding foreign

described in section 243(a)(3).

cooperative should receive a notice

trade income) and

Cooperatives taking this deduction

from the RIC specifying the amount

Qualify for the 80% deduction

are subject to the provisions of

of dividends that qualify for the

provided in section 245(c)(1)(B).

section 1561.

deduction.

Line 8, Column (a). Enter dividends

Note: The 100% deduction does not

Line 3, Columns (b) and (c).

that are received from wholly owned

apply to affiliated group members that

Dividends received on debt-financed

foreign subsidiaries and that are

are joining in the filing of a

stock acquired after July 18, 1984,

eligible for the 100% deduction

consolidated return.

are not entitled to the full 70% or 80%

provided in section 245(b).

Line 12, Column (a). Enter foreign

dividends-received deduction. The

In general, the deduction under

dividends not reportable on lines 3,

70% or 80% deduction is reduced by

section 245(b) applies to dividends

6, 7, 8, or 10 of column (a). Include

a percentage that is related to the

paid out of the earnings and profits

on line 12 the cooperative's share of

amount of debt incurred to acquire

of a foreign corporation for a tax year

the ordinary earnings of a qualified

the stock. See section 246A. Also see

during which:

electing fund from Form 8621, Return

section 245(a) before making this

All of its outstanding stock is owned

by a Shareholder of a Passive

computation for an additional

(directly or indirectly) by the domestic

Foreign Investment Company or

limitation that applies to dividends

cooperative receiving the dividends

Qualified Electing Fund, line 6c.

received from foreign corporations.

and

Line 13, Column (a). Include income

Attach a schedule to Form 990-C

All of its gross income from all

constructively received from

showing how the amount on line 3,

sources is effectively connected with

controlled foreign corporations under

column (c), was figured.

the conduct of a trade or business

subpart F. This amount should equal

Line 4, Column (a). Enter dividends

within the United States.

the total of amounts reported on

received on the preferred stock of a

Schedule I, Form 5471.

Line 9, Column (c)—Limitation on

less-than-20%-owned public utility

dividends-received deduction.

Line 14, Column (a). Include

that is subject to income tax and is

Generally, line 9, column (c) may not

gross-up for taxes deemed paid

allowed the deduction provided in

exceed the amount from the

under sections 902 and 960.

section 247 for dividends paid.

worksheet below. However, in a year

Line 15, Column (a). Enter taxable

Line 5, Column (a). Enter dividends

in which an NOL occurs, this

distributions from an IC-DISC or

received on preferred stock of a

limitation does not apply even if the

former DISC that are designated as

20%-or-more-owned public utility that

loss is created by the

not eligible for a dividends-received

is subject to income tax and is

dividends-received deduction. See

deduction.

sections 172(d) and 246(b).

Page 15

Instructions For Form 990-C - Farmers' Cooperative Association Income Tax Return - 2000 Page 15

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