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Line 11, column (b). Include income

Are received from

See section 246(c)(4) and Regulations

less-than-20%-owned foreign

constructively received from controlled

section 1.246-5 for more details.

corporations, and

foreign corporations under subpart F. This

b. Dividends attributable to periods

•

Qualify for the 70% deduction under

amount should equal the total subpart F

totaling more than 366 days that the

section 245(a). To qualify for the 70%

income reported on Schedule I of Form

corporation received on any share of

deduction, the corporation must own at

5471, Information Return of U.S. Persons

preferred stock held for less than 91 days

least 10% of the stock of the foreign

With Respect to Certain Foreign

during the 181-day period that began 90

corporation by vote and value.

Corporations.

days before the ex-dividend date. When

counting the number of days the

Line 12, column (b). Include gross-up

Also include dividends received from a

corporation held the stock, you cannot

for taxes deemed paid under sections 902

less-than-20%-owned foreign sales

count certain days during which the

and 960.

corporation (FSC) that:

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corporation’s risk of loss was diminished.

Are attributable to income treated as

Line 13, column (b). Include the

See section 246(c)(4) and Regulations

effectively connected with the conduct of

following.

section 1.246-5 for more details.

a trade or business within the United

1. Dividends (other than capital gain

Preferred dividends attributable to periods

States (excluding foreign trade income)

distributions reported on Schedule D

totaling less than 367 days are subject to

and

(Form 1120) and exempt-interest

•

the 46-day holding period rule above.

Qualify for the 70% deduction under

dividends) that are received from RICs

c. Dividends on any share of stock to

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

and that are not subject to the 70%

the extent the corporation is under an

Line 7. Enter the U.S.-source portion of

deduction.

obligation (including a short sale) to make

2. Dividends from tax-exempt

dividends that:

related payments with respect to positions

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organizations.

Are received from 20%-or-more-owned

in substantially similar or related property.

3. Dividends (other than capital gain

foreign corporations, and

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5. Any other taxable dividend income

distributions) received from a REIT that,

Qualify for the 80% deduction under

not properly reported elsewhere on

for the tax year of the trust in which the

section 245(a).

Schedule C.

dividends are paid, qualifies under

Also include dividends received from

sections 856 through 860.

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

Line 17. Dividends received on

4. Dividends not eligible for a

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Are attributable to income treated as

debt-financed stock acquired after July

dividends-received deduction, which

effectively connected with the conduct of

18, 1984, are not entitled to the full 70%

include the following.

a trade or business within the United

a. Dividends received on any share of

or 80% dividends-received deduction.

States (excluding foreign trade income)

stock held for less than 46 days during

The 70% or 80% deduction is reduced by

and

the 91-day period beginning 45 days

a percentage that is related to the amount

•

Qualify for the 80% deduction provided

before the ex-dividend date. When

of debt incurred to acquire the stock. See

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

counting the number of days the

section 246A. Also, see section 245(a)

Line 8. Enter dividends received from

corporation held the stock, you cannot

before making this computation for an

wholly owned foreign subsidiaries that are

count certain days during which the

additional limitation that applies to

eligible for the 100% deduction under

corporation’s risk of loss was diminished.

dividends received from foreign

section 245(b).

In general, the deduction under

section 245(b) applies to dividends paid

out of the earnings and profits of a foreign

Worksheet for Schedule C, line 23

corporation for a tax year during which:

Keep for Your Records

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All of its outstanding stock is directly or

indirectly owned by the domestic

1. Refigure the amount from Schedule A, line 35 or Schedule B, line

corporation receiving the dividends, and

19, whichever applies, without any domestic production activities

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All of its gross income from all sources

deduction, any adjustment under section 1059, and without any

is effectively connected with the conduct

capital loss carryback to the tax year under section 1212(a)(1) . .

of a trade or business within the United

2. Enter the sum of the amounts from line 22, column (b) (without

States.

regard to wholly owned foreign subsidiary dividends) and line 9,

Also, include on line 8 dividends from

column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FSCs that are attributable to foreign trade

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

income and that are eligible for the 100%

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

deduction provided in section

5. Add lines 16, 19, 21, and 22 (without regard to FSC dividends),

245(c)(1)(A).

column (b), and the portion of the deduction on line 17, column

Line 9. Enter only those dividends that

(b), that is attributable to dividends received from

qualify under section 243(b) for the 100%

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

dividends-received deduction described in

6. Enter the smaller of line 4 or line 5. If line 5 is greater than line 4,

section 243(a)(3). Corporations taking this

stop here; enter the amount from line 6 on line 23, column (b),

deduction are subject to the provisions of

and do not complete the rest of this worksheet . . . . . . . . . . . . .

section 1561.

7. Enter the total amount of dividends received from

The 100% deduction does not apply to

20%-or-more-owned corporations that are included on lines 2, 3,

affiliated group members that are joining

5, 7, and 8 (without regard to FSC dividends), column (b) . . . . .

in the filing of a consolidated return.

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

Line 10, column (b). Enter foreign

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

dividends not reportable on lines 3, 6, 7,

10. Subtract line 5 from line 23, column (b) (without regard to FSC

or 8 of column (b). Include on line 10 the

dividends) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

corporation’s share of distributions from a

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

section 1291 fund from Form 8621, Part

12. Dividends-received deduction after limitation (section

IV, line 10a or 10e, to the extent that the

246(b)). Add lines 6 and 11. Enter the result here and on line 23,

amounts are taxed as dividends under

column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

section 301. See the instructions for Form

8621.

-16-

Instructions for Form 1120-PC (2011)

Instructions For Form 1120-Pc - U.s. Property And Casualty Insurance Company Income Tax Return Page 16

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