Form 1120-IC-DISC is an IRS tax form required by corporate structures. It’s separate from the form that registers your business as a tax incentive entity, Form 4876-A. Knowing when to file this tax form will keep your corporation compliant. What is Form 1120?

Form 1120, Interest Charge Domestic International Sales Corporation Return, is a yearly tax form requesting information on taxable income, cost of goods sold, gross income, deductions, dividends, distributions, inclusions, and income reconciliations. Current and former tax incentive entities must apply within nine months after the end of their tax year by the 15^th day. No extensions are allowed on this form.

You’re in the right place if you have questions about this revenue return. We’ll demystify Form 1120, discussing who needs to file and providing filing instructions.

How to Fill Out the 1120-IC-DISC Form

Your corporation’s tax break depends on completing Form 1120-IC-DISC accurately. The following steps will help you navigate the ins and outs of this form as you file for the first time.

1. Providing Entity Information and Classification

The top of the tax report requests your IC-DISC election date, Employee Identification Number, business name, business address, incorporation date, business activity code number, and total assets.

You must also check from five categories: amended return, address change, name change, final return (as a soon-to-be former Interest Charge Corporation), or initial return.

Mark if any party owned at least 50 percent of your voting stock, then check a box if you used intercompany pricing rules for gross income. Your options are arm’s length pricing, the four-percent gross receipts method, or the 50-50 combined taxable income method.

2. Reporting Income from Qualified Export Receipts (QERs)

Your corporate structure had to report your Qualified Export Receipts or QERs to apply for Interest Charge Corporation status. Form 1120 requires you to report QER income, so calculate and mark it on the form.

3. Deducting Commissions Paid to the IC-DISC

In Schedule B, Gross Income, track commission sales (by commission or gross receipt) for all types of receipts, including direct foreign sales to unrelated purchasers and unrelated IC-DISCs.

4. Calculating the IC-DISC’s Taxable Income

Determining your taxable income requires adding all your income sources and subtracting deductions. Between Schedules B, C, and E, you can detail all areas where your corporation derived income.

5. Reconciling Net Income on Schedule P

Schedule P is for reconciling your net income from partnerships or expenses from effectively connected income or ECI with interests from partnerships with foreign corporations. This separate section of Form 1120 includes five parts.

6. Reporting Balance Sheet Information

Schedule L, Balance Sheets per Books, helps your corporation balance income and assets between the beginning and end of the tax year. The categories include shareholder’s equity and liabilities and assets.

7. Completing Schedule M-3 for Tax Adjustments

Schedule M-3, Analysis of Previously Taxed Income, measures your balance at the start of the year, itemized increases, deemed distributions according to Section 995(b), deficits in profits and earnings, itemized decreases, and distributions under Section 992(c).

8. Other Relevant Details and Attachments

Completing Form 1120 sometimes requires additional details and attachments, usually related to tax forms. Include this information in your tax submission to expedite its filing.

You can count on Export Tax Management to ensure you complete this tax report correctly the first time. Get in touch today to explore our services.

Overview of Form 1120-IC-DISC

What Is Form 1120-IC-DISC, and What Is the 1120 Series?

You already declared yourself an IC-DISC through Form 4876-A. Every year your corporation proceeds under this tax declaration, you must send the IRS your completed Form 1120.

Boiling it down simply, this tax form tracks your yearly income. It includes sections A through O, with detailed line information for taxable income, dividends, gross income, deductions, cost of goods sold, and net operating loss deductions, among other requirements by section.

This declaration form is a part of the larger 1120 Series, which includes 1120S, 1120-C, and 1120-H. Here’s a breakdown of what each form is:

• Form 1120: Required of C-corporations operating as IC-DISCs
• Form 1120S: Known as the U.S. Income Tax Return for an S Corporation and required of S corps filing tax returns
• Form 1120-C: The U.S. Income Tax Return for Cooperative Associations
• Form 1120-H: The U.S. Income Tax Return for Homeowners Associations, the tax return for housing associations and condominiums

President Woodrow Wilson created Form 1120 and mandated it for applicable corporations after World War I. It’s been a required form since 1918.

Who Needs to File the Form?

According to the IRS, current and former IC-DISCs should file. A former tax incentive entity doesn’t qualify for this tax year but did for prior years. Your corporation might have accumulated IC-DISC income or taxed undistributed income.

As a former Interest Charge Corporation, you can skip the taxable income schedules and lines 1 through 8 on the first page of the form. You can’t skip Schedules J through M. The IRS advises writing “Former IC-DISC” in those sections.

Only certain parties can sign off on Form 1120-IC-DISC. They include your corporation’s president or vice president, a corporate officer, a chief accounting officer, or a treasurer or assistant treasurer.

If you have an assignee, trustee, or receiver who will file Form 1120 for your export incentive corporation, you can’t have a corporate officer sign the form. Instead, one of the above parties should do it.

When Do You Need to File Form 1120?

Form 1120 should be completed and ready for filing within nine months after your corporate tax year ends by no later than the 15^th of the month.

Are Extensions Offered?

The IRS doesn’t provide extensions for this tax document. However, if the 15^th isn’t a business day, such as a legal holiday or a weekend, you can file the next business day and be within the deadline.

Do you need directions for drafting your taxation forms as a corporate structure? Export Tax Management specializes in implementation and compliance. Find out how we can be of assistance by contacting us today.

Reporting Requirements for Form-1120-IC-DISC

Carefully filing the taxation Form 1120 will save you tax headaches later. Here is more information on the overarching information required on the form.

Income

Your IC-DISC will report all areas of income on this tax report, including:

• Taxable income
• Refundable credits for fuel-related federal tax
• Total income
• Costs of goods sold
• Gross income
• Direct foreign sales to related and unrelated purchasers
• Renting or leasing export property
• Producer loan interest
• Other interest
• Export management services
• Architectural and engineering services
• Nonqualified inclusions and dividends
• Sales to controlled group IC-DISCs
• Leases, indirect sales, and direct sales for use by the United States government
• Exports the US government subsidizes

Cost of Goods Sold

Form 1120-IC-DISC requires this information on your costs of goods sold for the most recent tax year:

• Inventory at the start of the year
• Inventory by the end of the year
• Labor costs
• Purchases

You must also detail how you valued your closing inventory, including whether you used the market or cost.

Deductions

Don’t forget to log your deductions whether a current or former Interest Charge Corporation, such as:

• Freight and related insurance
• Contributions
• Interest
• Licenses and taxes
• Bad debts
• Employee benefit programs
• Profit-sharing and pension plans
• Maintenance and repairs
• Warehousing
• Sales commissions
• Rents
• Wages and salaries
• Depreciation
• Advertising
• Market studies
• Export promotion expenses

Dividends

Qualified dividends required on Form 1120 are:

• Total dividends
• Section 250 deductions (please include Form 8993)
• Other dividends
• Global Intangible Low-Taxed Income or GILTI dividends (include Form 8992 and 5471)
• Subpart F dividends (include Form 5471)
• Foreign corporation dividends besides those included on lines 3 through 10
• Foreign-sourced dividends from a foreign corporation with 10 percent ownership
• Dividends from foreign subsidiaries you wholly own
• Dividends from foreign corporations where you have more than 20 percent ownership or fewer
• Dividends on public utility stock (where you own more or less than 20 percent) with preferred stocks
• Dividends from domestic corporations outside of debt-financed stock where you have 20 percent ownership or fewer

Taxation of IC-DISC and Its Benefits

Making your tax declaration through Form 1120-IC-DISC puts your Interest Charge Corporation in an advantageous position.

Many IC-DISC benefits await you, including:

• Deferring tax liability
• Can obtain up to $10 million in commissions before paying them as dividends
• The freedom to allocate the additional income as needed, whether for warehousing, increasing staff, or marketing
• Longer-term, consistent tax benefits

Common Mistakes to Avoid

Your export incentive corporation can only expect the above benefits by completing Form 1120 accurately. Paying attention to detail and triple-checking for accuracy will help.

Here are some more tips for compliance and error reduction:

• Separate your personal and business expenses, as Form 1120 has no section for personal expenses.
• File your IC-DISC tax forms separately from the rest of your corporate tax reporting.
• Establish good record-setting habits after your tax declaration to make filing Form 1120 easier yearly.
• Confirm which supporting documents you require and attach them.

Export Tax Management will guide your export incentive corporation toward compliance with our professional service. Contact us before your forms are due.

Work With Export Tax Management Before Filing Form 1120

Filing forms as a tax entity ensures you can take advantage of Interest Charge Corporation benefits. You need a partner well-versed in the specifications, procedures, and guidelines of Form 1120-IC-DISC.

Export Tax Management is your choice when filing export incentive corporation taxes. Our years of expertise mean we’ve seen all IC-DISC situations and can guide you through the prompt filing of your tax form.

Connect with our professionals today to get started.

IC-DISC benefits are one of the primary reasons businesses file for this corporate structure change. As a company branches into international sales, the tax incentive can hold over money that can be spent on warehousing, product development, and more.

What are the benefits of IC-DISC?

IC-DISC tax benefits include tax deferrals, estate-planning aids, reduced federal tax payments, and increased capital. In the interim, the corporation can use the money to grow its business by hiring new staff, expanding warehousing, or developing new products and services.

This guide will delve into the benefits a corporation can take advantage of when electing as an Interest Charge DISC. You’ll also learn about eligibility requirements and how to implement IC-DISC status with professional assistance.

Overview of IC-DISC

The Interest Charge Domestic International Sales Corporation or IC-DISC is a tax incentive for United States-based corporations that export products internationally.

The United States Congress created the IC-DISC tax benefits in 1971 to encourage more American businesses to expand internationally. Corporations registering as an Interest Charge DISC can take advantage of the aforementioned advantages (which we’ll explain more shortly) within the next tax year.

Corporations considering implementing an IC-DISC should understand the ins and outs of the process and the incentives they’re eligible for. This will maximize their federal income tax savings.

Export Tax Management Inc. are IC-DISC specialists. Our services cater to businesses seeking implementation and incorporation, including IC-DISC-related supplier agreement preparation and filing IRS Form 1120-IC-DISC.

Contact Export Tax Management Inc. today to learn more about your options.

The 11 Most Important Benefits of IC-DISC

Here is a full overview of IC-DISC tax benefits, including examples to help your corporation understand why implementing IC-DISC status can further business goals and cement your business as one of the top in your industry.

1. Reduced Tax Liability

Corporations of all sizes have tax liability, referring to what they must pay the IRS. If your C corp or S Corp can implement an IC-DISC, you can drastically reduce your tax liability.

How so? IC-DISCs are not required to pay taxes on generated commission income. Instead, the dividend payments go to the IC-DISC’s shareholders.

Here’s an example. Your operating company pays a commission to your Interest Charge DISC, at least four percent of your gross receipts from qualified exports. Alternatively, you can pay at a rate that’s 50 percent of your net income on qualifying exports.

2. Increased Cash Flow

If your company implements an IC-DISC, you can significantly reduce your federal income taxes, which can increase your company cash flow, using the cash however your corporation sees fit.

You may decide to hire new staff to meet the production demands of your rapidly expanding business. You might also lease or buy a larger warehouse or upgrade your production equipment.

You can also use the additional cash flow toward R&D, reducing time between new products and services. You could expand your marketing and advertising campaigns, keeping your native and international audiences engaged.

3. Competitive Advantage

Implementing an IC-DISC gives your corporation a competitive advantage.

If you’re in an especially competitive industry, such as biotechnology, architecture, or engineering, your business must do all it can to get a leg up so you don’t lose business to your competitors.

Interest Charge DISC benefits can help you gain that competitive advantage in several ways. First, by expanding internationally, you’ll already grow your presence in a way many of your competitors likely aren’t.

As mentioned, you can use the extra cash flow to expand your marketing campaigns, increasing your name awareness. You could focus on SEO to increase your rank and generate more traffic to your website over the competition.

You can also introduce higher-quality products and services than your competitors, increasing your audience and cementing their loyalty.

4. Increased Access to Capital

Cash flow is an important consideration for businesses of all sizes. The additional capital you’d access through your IC-DISC tax incentives can open many business doors, as described.

For example, you can reduce federal income tax payments. You also don’t pay a full rate on the commission payments.

Your dividends are taxable to your Interest Charge DISC shareholders at 23.8 percent, a 3.8 percent net investment income tax rate, and a 20 percent capital gains tax rate.

5. Tax Deferral

One of the top IC-DISC tax benefits is tax deferral. Corporations can take out producer’s loans, allowing the corporation to access its undistributed profits from exported goods and services.

A producer’s loan is a loan not exceeding five years. Only the shareholders or members of your corporation based in the US are eligible to take out a producer’s loan. The loan cannot surpass the corporation’s IC-DISC income.

Further, the limit on loans is determined by multiplying these numbers and tallying up the sum:

• The aggregate of experimental and research expenditures by a percent ratio of gross receipts from past years or receipts for three years ahead of the latest tax year for all leases and sales that are considered export property.
• The amount in rentals, leases, and sales to customers.
• The amount spent on support, equipment, machinery, and warehouses for production facilities.

While deferring IC-DISC taxes increases the money in a corporation’s pocket now, the deferred taxes acquire interest. Your corporation must carefully determine the right time to pay the tax amount.

6. Ability to Expand Globally

Global expansion was ultimately Congress’s goal in creating IC-DISC benefits. As US-based companies strive to grow their presence, innovation wins, as the race to create better products and services will lead to many amazing creations.

Your corporation can reach a larger global talent network willing to increase your workforce and improve your products and services. Your revenue potential grows with your corporation’s size, as does your reputation.

Eligibility and Qualifications for IC-DISC Benefits

Your corporation must qualify to reap IC-DISC tax benefits. Here are the eligibility requirements:

• Your corporation implements an IC-DISC by electing IC-DISC status on Form 4876-A. The form is due within 90 days after the incorporation of your IC-DISC. Keep in mind the election continues unless and until your corporation revokes it.
• Your corporation must pass an asset test, with at least 95 percent of the generated assets for that tax year meeting the criteria as export assets. Most export assets are receivables or commission revenue. Other examples are assets connected to servicing, assembling, packaging, transporting, handling, storing, or selling exported products or services.
• Your corporation must pass a gross receipts test, where the rate of qualifying exports from commissions should be 95 percent or higher. A qualifying export must be produced in the US, with the overall rate of production and manufacturing occurring in the country at up to 50 percent.
• You must only have one stock class.
• Your IC-DISC’s stock must be valued at $2,500 or higher throughout the tax year.
• Your Interest Charge DISC must file Form 1120 IC-DISC.
• Your IC-DISC must maintain separate financial records.
• You must file tax returns for the Interest Charge DISC and corporation separately.

Documentation is at the core of electing for IC-DISC status. Holding onto paperwork throughout your corporation’s term as an Interest Charge DISC ensures maintained eligibility and compliance with the requirements.

Understanding IRS Form 1120-IC-DISC

Has your corporation decided to proceed with Interest Charge DISC status to take advantage of the IC-DISC benefits?

Download and print IRS Form 1120-IC-DISC, the Interest Charge Domestic International Sales Corporation Return. The form consists of various sections, including:

• Schedule A, Cost of Goods Sold
• Schedule B, Gross Income
• Schedule C, Dividends, Inclusions, and Special Deductions
• Schedule E, Deductions
• Schedule J, Deemed and Actual Distributions and Deferred DISC Income for the Tax Year
• Schedule L, Balance Sheets Per Books
• Schedule M-1, Reconciliation of Income Per Books With Income Per Return
• Schedule M-2, Analysis of Other Earnings and Profits
• Schedule M-3, Analysis of Previously Taxed Income
• Schedule M-4, Analysis of Accumulated IC-DISC Income
• Schedule N, Export Gross Receipts of the IC-DISC and Related U.S. Persons
• Schedule O, Other Information

You must also file Form 4876-A, Election To Be Treated as an Interest Charge DISC.

If you hire a professional to assist with IC-DISC implementation, you should select an advisor based on their expertise and experience. They should have a proven track record of assisting corporations registering as Interest Charge DISCs, such as Export Tax Management Inc.

Read more about what our clients have to say, or fill out our contact form today to get your IC-DISC implementation underway.

Why Export Tax Management?

Export Tax Management Inc. is your choice for maximizing IC-DISC benefits for your corporation. Our years of experience assisting businesses becoming elected Interest Charge DISCs make our services a trusted choice for your corporation.

You need the guidance of a professional as you make this business decision, and we’re here to help.

Contact us today to get started.

What is an IC-DISC? Corporations considering applying for tax-exempt status often wonder what it means to qualify for this tax exemption and what’s required. What is an Interest Charge Domestic International Sales Corporation and how does it work?

An Interest Charge Domestic International Sales Corporation or IC-DISC is an elected corporate entity based in the United States that sells products or services internationally and receives a tax incentive as an exporter. These corporations have less tax liability, can defer taxes, and pay less on federal income taxes. 

This introduction to IC-DISC will explain this export tax incentive, its risks and benefits, the amount of federal tax corporations can save, and an actionable strategy to becoming an Interest Charge DISC and maintaining that status.

What Is an IC-DISC?

So, what is an IC-DISC? The Interest Charge Domestic International Sales Corporation or IC-DISC is a tax incentive for United States exporters.

Congress introduced the Domestic International Sales Corporation or DISC status in 1971 to encourage the growth of the US economy through foreign exportation of goods and services.

A corporation can become an IC-DISC if its gross receipts within the last tax year qualify as qualified export receipts at a rate of 95 percent or higher.

Its qualified export assets must be worth 95 percent or more of the sum of its assets on an adjusted basis. Its stock class must be singular and $2,500 or higher. The Interest Charge DISC must also keep its own records separate from the corporation.

As an IC-DISC, the corporation receives a commission when it sells qualifying foreign products. The commissions are exempt from federal income tax. The corporation can accumulate up to $10 million in commissions every year before they must pay them as dividends.

The shareholders of the DISC will pay taxes on the dividends at a reduced rate. Their net investment income tax rate is 3.8 percent, and the capital gains tax rate is 20 percent, for a total of 23.8 percent.

Is IS-DISC Risky?

IC-DISC carries relatively low little risk. No tax-planning strategy is completely risk-free, but since its creation in the 1970s, the reduced tax rate has remained consistent, giving qualifying corporations a reliable way to reduce tax spending.

Compared to Foreign Derived Intangible Income or FDII, a tax deduction IC-DISC is often compared to, the latter holds much steadier. FDII, which applies to US-based companies specializing in intellectual property sold outside the country, will lessen its tax breaks by 2025.

IC-DISC is a permanent tax incentive, paving the way for a promising future.

If your corporation is interested in applying for IC-DISC status, you need assistance and services you can trust. Export Tax Management Inc. works closely with CPA firms to assist in filing international taxes.

See the difference our services can make – contact us today.

How Does an IC-DISC Work?

Now that we’ve explored an IC-DISC definition, you may have another question. How does this tax exemption work?

A qualifying corporation must complete IRS Form 4876-A, Election to be Treated as an Interest Charge DISC. The form requests the corporation’s name, business address, Employee Identification Number or EIN, principal business classification, and phone number. The contact information for each shareholder must be included.

In Part II, the participating shareholders must consent to the IC-DISC status change.

After sending in the form, the corporation will operate as an Interest Charge DISC for at least the next tax year.

Only the exporter or shareholders can own the Interest Charge DISC. If you own a C corporation, you must create a separate entity when filing Form 4876-A, while if you’re part of a flow-through entity, you can add the IC-DISC as your subsidiary.

The Interest Charge DISC must have its own tax returns, accounting records, and bank account separate from the original entity, but the business can largely continue operating the same way.

When your corporation makes a foreign sale on a product or service, you pay the IC-DISC a commission. The commission is tax deductible and only paid at 50 percent of your net export income or four percent or more of your qualified gross receipts.

You can add the commission to your business expenses, lowering your taxable income by up to 37 percent.

When you reach the $10 million threshold for paying dividends, those go to the shareholders. The shareholders will pay a reduced tax rate of up to 23 percent.

How Much Federal Tax Can You Save?

What is an IC-DISC, and what can you save if you opt for one? The export commission rate is determined by whichever is higher, either 50 percent of the corporation’s qualifying export net income or four percent of its qualifying export gross receipts.

Let’s create an example to showcase how much a corporation can save.

A corporation has $5,000,000 in gross total sales and $3,000,000 in gross export sales for the 2022 fiscal tax year, which ended in December. The cost of goods sold was $1,000,000, its research and development expenses were $100,000, its admin/selling/general expenses were $7,000, and its other expenses were $15,000.

If paying a current marginal tax rate of 29.6 percent, the corporation has an estimated commission of $1,167,900 and a federal estimated tax saving of $112,118.

Are you ready to maximize your IC-DISC? Schedule a free consultation with Export Tax Management Inc. today.

IC-DISC Strategy

An Interest Charge DISC strategy is a must to amplify IC-DISC tax returns. The following information will help corporations properly file.

Confirm Your Eligibility

Your corporation must make the required foreign assets to qualify as an Interest Charge DISC. Further, you must have the appropriate corporate structure, creating the IC-DISC as a subsidiary if you or your shareholders are a flow-through corporation or a brother-sister corporate relationship as a C corp.

Know Your State Laws

The state laws for creating an Interest Charge DISC can have slight variations depending on which part of the country your business operates. Read up on your state laws to ensure you’re in compliance before proceeding.

Create Separate Books

The Interest Charge DISC must maintain its own records from the rest of your corporate entity, whether you’re an LLC, C corp, flow-through entity, or an S corp. This will reduce stress and improve your accuracy when filing your IC-DISC taxes.

Elect Within 90 Days

Upon determining your corporation will become an Interest Charge DISC, you should complete IRS Form 4876-A within 90 days. You must also file your taxes under Form 1120-IC-DISC, which we’ll discuss later.

Improve IC-DISC Each Year

If your corporation elects to continue as an IC-DISC, you should follow the above best practices and strive to improve your business standing yearly to maintain or increase your tax benefits.

Benefits and Advantages

IC-DISC benefits are extensive and can propel corporations to the next level of success. Here are the returns to anticipate.

Valuable for Estate Planning

Corporation owners must be future-minded, covering their bases for a smoother transition when the time comes. An Interest Charge DISC puts a corporation owner in an advantageous position regarding estate planning between the deferred dividends and lower tax rates for future corporation owners.

Prevents C Corp Double Taxation

C corporations are susceptible to double taxation through the required dividend payments to shareholders and corporate income taxes. Registering as an Interest Charge DISC grants C Corps the freedom to defer shareholder dividend payments, only paying corporate income taxes. Those will be at a lower rate.

Lowers Tax Liability

Since an IC-DISC can wait to distribute commissions into dividends, their tax liability is naturally lower. They will have to pay the deferred taxes eventually, so a corporation should ensure they have the capital to keep tax liability low.

Increases Capital

The available capital a corporation will have available by deferring commission dividends can be used as working capital. Perhaps the corporation elects to expand advertising and marketing services for the export corporation (bearing in mind the export corporation pays for this) or finance the export corporation.

The capital can also go toward creating new products and services.

If your corporation is ready to explore your potential IC-DISC tax benefits, Export Tax Management Inc. can help. Start saving today.

About Form 1120-IC-DISC:

The 1120-IC-DISC is an IRS tax form all Interest Charge DISC corporations must complete. The full name of the form is the Interest Charge Domestic International Sales Corporation Return.

Requirements

The first section of the form asks for the corporation’s DISC election year, name, business address, EIN, date incorporated, total assets, and business activity code number.

The corporation must list out any estate, trust, partnership, individual, or company that owned at least 50 percent of the Interest Charge DISC’s voting stock by the conclusion of the tax year. They must also mention intercompany pricing rules applied to gross income of 25 percent or higher and all taxable income.

Schedule A

Schedule A, Costs of Goods Sold, includes inventory at the start of the year, costs of labor, purchases, and inventory at the end of the year. Schedule B, Gross Income, details the corporation’s direct foreign sales, qualified export receipts, and interest on any producer loans.

Schedule C

Schedule C, Dividends, Inclusions, and Special Deductions, calculates the corporation’s dividends from foreign entities, total dividends, and qualified dividends. Section E, Deductions, covers warehousing, market studies, export promotion expenses, and more.

Schedule J

Schedule J, Deemed and Actual Distributions and Deferred DISC Income for the Tax Year, includes several parts:

• Part I: Deemed Distributions Under Section 995(b)(1), tallies taxable income and gross interest from prior sections.
• Part II: Section 995(b)(1)(E) Taxable Income, includes total qualified export receipts, statutory minimums, prorations, and more.
• Part III: Deemed Distributions Under Section 995(b)(2) includes annual installments of forms of distributable income.
• Part IV: Actual Distributions, requires the corporation’s other profits and earnings and other actual distributions.
• Part V: Deferred DISC Income Under Section 995(f)(3) is an accumulation of IC-DISC income.

Schedule L

Schedule L, Balance Sheets Per Books, includes qualified export assets, export-import bank obligations, working capital, funds awaiting investment, producer’s loans, trades receivable, nonqualified assets, accounts payable, capital stock, and total liabilities for shareholders’ equity.

M-Schedules

M-schedules are for calculating losses, previously taxed income, accumulated IC-DISC income, and export gross receipts. Schedule N, Export Gross Receipts of the IC-DISC and Related U.S. Persons, details total export gross receipts as a percentage. All other information goes into Schedule O.

Filing Deadlines for Interest Charge DISC Corporations

An Interest Charge DISC corporation must file Form 1120 on the 15th day of the ninth month after its tax year ends. The exclusions are if the 15th is a holiday or weekend. In that case, the taxes must be filed within the next business day.

Why Export Tax Management?

Export Tax Management Inc. is an IC-DISC specialist. Your corporation won’t wonder, “what is an IC-DISC?” when you have us at the helm.

We can help you structure and incorporate Interest Charge DISCs into your corporation to increase your tax savings, extend tax referrals, and have more capital to work with. We’ll assist you in filing the requisite IRS tax forms and generate an IC-DISC Related Supplier Agreement.

We can ensure your Interest Charge DISC compliance and help you incorporate intercompany pricing methods to save the most on your federal income taxes.

Contact Export Tax Management Inc. now to expedite your IC-DISC.