Fillable Form 8404 - Interest Charge On Disc-Related Deferred Tax Liability

Form 8404 (2016)

Page

Line 3. Enter the net amount of all section

Line 8. The base period T-bill rate is defined

than one IC-DISC, enter each IC-DISC’s

identifying number in item C, each IC-DISC’s

995(f)(2) adjustments to taxable income. See

in section 995(f)(4). The base period T-bill rate

name in item E, and report the combined

Special Computation Rules, earlier, for details

is compounded daily based on the number of

income on line 2.

on the income (loss) and expense

days in the shareholder’s tax year to

adjustments to be made. If more than one

determine the base period T-bill rate factor.

Item D—Tax year. Enter in item D the

adjustment is involved, attach a statement

calendar year or the beginning and ending

The base period T-bill rate factor for 2016

listing each item and show the computation of

dates of the tax year shown on your tax return

is .005414566 for a 366-day tax year. Enter

the net amount.

for which the interest charge is figured.

the appropriate factor on line 8 of Form 8404.

Lines 5 and 6. “Tax liability” on lines 5 and 6

See Rev. Rul. 2017-01, which will be

Special Computation Rules

(with and without the deferred DISC income)

published in Internal Revenue Bulletin

means the amount of tax imposed on the

2017-03, for a short tax year or a 52–53 week

Carrybacks. The determination of the

IC-DISC shareholder for the tax year by

tax year.

shareholder’s DISC-related deferred tax

chapter 1 of the Internal Revenue Code (other

liability on lines 1 through 7 shall be made

than taxes listed below) reduced by credits

without taking into account any net operating

Privacy Act and Paperwork Reduction Act

allowable against such tax (other than credits

Notice. We ask for the information on this

loss (NOL), capital loss carryback, or credit

listed below).

carryback to the tax year.

form to carry out the Internal Revenue laws of

the United States. We need it to figure and

See Special Computation Rules, earlier, for

Carryovers. The determination of the

collect the right amount of tax. Section 995(f)

rules for carrybacks and carryovers. These

shareholder’s tax liability (line 5) for the tax

requires taxpayers to pay over to the IRS

rules may affect the line 5 computation.

year is made by disregarding any loss,

interest on DISC-Related Deferred Tax

deduction, or credit to the extent that such

The following taxes aren't taken into

Liability. This form is used to determine the

loss, deduction, or credit may be carried

account.

amount of tax that you owe. Sections 6001

(either back or forward) by the shareholder to

• Alternative minimum tax.

and 6011 require you to provide the

any other tax year.

requested information if the tax applies to

• Any other provisions described in section

Note: If the tax year is the last tax year to

you. Section 6109 requires you to provide

26(b)(2) (relating to certain other taxes treated

which the amount of carryforward (of loss,

your identifying number. Routine uses of this

as not imposed by chapter 1).

deduction, or credit) may be carried, the line 3

information include disclosing it to the

The following credits aren't taken into

adjustments and line 5 tax shall be figured

Department of Justice for civil and criminal

account.

with regard to the full amount of such

litigation and to other federal agencies, as

carryforward.

• Section 31 (taxes withheld on wages).

provided by law. We may disclose the

For example, a shareholder had an NOL

information to cities, states, the District of

• Section 32 (earned income credit).

carryover to 2017 of $12,000; $10,000 income

Columbia, and U.S. Commonwealths or

• Section 34 (fuels credit).

to which $10,000 of the NOL can be applied;

possessions to administer their tax laws. We

For 2016, a Form 1040 filer or a Form 1120

$2,000 allowable NOL carryover to 2018; and

may also disclose this information to other

filer using the above rules will generally figure

$5,000 deferred DISC income for 2017. In this

countries under a tax treaty, to federal and

their line 6 tax liability using the following

case, for purposes of figuring line 5, the

state agencies to enforce federal nontax

items shown on the following lines of those

allowed NOL is $10,000. Note: If 2017 were

criminal laws, or to federal law enforcement

forms. All other filers should use the

the last tax year to which the $12,000 NOL

and intelligence agencies to combat terrorism.

corresponding lines of other income tax

could be carried, the full $12,000 NOL would

If you don't provide this information or provide

returns. If you haven't yet filed your return,

be allowed for purposes of figuring line 5 tax

incomplete or fraudulent information, you may

estimate the line 6 tax liability based on all

liability. The additional $2,000 loss would be

be subject to penalties.

information available to you.

entered on line 3.

You aren't required to provide the

2016

Other adjustments. In figuring line 3

2016

information requested on a form that is

Form 1120

Form 1040

adjustments, take into account any income

subject to the Paperwork Reduction Act

Line

and expense adjustments that don't result in

unless the form displays a valid OMB control

Tax less nonrefundable

amounts that may be carried back or forward

number. Books or records relating to a form

credits

7, Sch. J

to other tax years. For example, in the case of

or its instructions must be retained as long as

Plus: (1) Recapture taxes

an IC-DISC shareholder who is an individual,

their contents may become material in the

the amount of medical expenses allowable as

administration of any Internal Revenue law.

(2) Prior year minimum

a deduction under section 213 must be

Generally, tax returns and return information

tax credit .

54b

5d, Sch. J

redetermined for purposes of line 3

are confidential, as required by section 6103.

Less: (1) Alternative minimum

adjustments. However, the amount allowable

tax .

3, Sch. J

The time needed to complete and file this

as a charitable deduction under section 170

(2) Additional child tax

form will vary depending on individual

isn't redetermined because this adjustment

credit .

circumstances. The estimated burden for

could result in a carryback or carryover.

(3) American

business taxpayers filing this form is

opportunity credit .

See Proposed Regulations section

approved under OMB control number

1.995(f)-1(d) for other details regarding these

1545-0123.

(4) Premium tax credit

and other special computation rules.

(Form 8962)

If you have comments concerning the

(5) Credit for tax paid

accuracy of these time estimates or

Line-by-Line Instructions

on undistributed

suggestions for making this form simpler, we

capital gains (Form

would be happy to hear from you. You can

Line 1. Enter on line 1 the taxable income or

2439) .

73a

19a, Sch. J

send us comments from

loss from your federal income tax return for

(6) Health insurance

Click on “More

your tax year that ends with or includes the

credit for eligible

Information” and then on “Give us feedback.”

IC-DISC’s tax year end. If you haven't yet filed

recipients (Form

Or you can write to the Internal Revenue

your tax return, estimate your income or loss

8885) .

73c

Service, Tax Forms and Publications, 1111

based on all information available to you. See

*Caution: Only use the portion of Form 1040,

Constitution Ave. NW, IR-6526, Washington,

Amended Form 8404, earlier.

line 63, or Form 1120, Schedule J, line 10,

DC 20224.

Line 2. Enter the deferred DISC income from

attributable to recapture of credits allowable

Don't send the form to this office. Instead,

line 10, Part III of Schedule K (Form

against taxes treated as imposed under

see Where to file, earlier.

1120-IC-DISC), for the IC-DISC tax year that

chapter 1 (for example, recapture of

ends with or within your tax year.

investment tax and low-income housing

credits). See section 26(b)(2) for a list of

recapture taxes to exclude.

Form 8404 - Interest Charge On Disc-Related Deferred Tax Liability - 2016 Page 2

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