SOI Tax Stats - 2000 IC-DISC's Metadata
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Actual distributions to shareholders.-Distributions from the IC-DISC's “earnings and profits” actually paid to shareholders of the IC-DISC.
Adjusted IC-DISC income subject to tax-deferral computation.-This represented the IC-DISC's taxable income after subtracting certain amounts not eligible for tax-deferral (e.g., amounts deemed distributed). Adjusted IC-DISC income subject to the tax deferral computation equaled IC-DISC taxable income minus the sum of: (1) gross interest from “producer's loans;”(2) certain gains from the sale or exchange of assets; (3) one-half of IC-DISC taxable income attributable to military property; and (4) IC-DISC taxable income attributable to “export gross receipts” in excess of $10 million.
Amounts deemed distributed.-This was the portion of the IC-DISC's “earnings and profits” not eligible for tax-deferral and, hence, was characterized as a fully taxable dividend to the IC-DISC shareholder(s). Amounts deemed distributed equaled the sum of: (1) gross interest from “producer's loans”; (2) certain gains from the sale or exchange of assets; (3) one-half of IC-DISC taxable income attributable to military property; (4) IC-DISC taxable income attributable to “export gross receipts” in excess of $10 million; (5) international boycott income; (6) illegal bribes and kickbacks; and (7) the amount of foreign investment attributable to producer's loans. In addition, for all shareholders that are C corporations, one-seventeenth of the adjusted IC-DISC income subject to deferral was to be reported as a deemed distribution. See Internal Revenue Code section 995(b) for additional information regarding deemed distributions.
Cost of sales and operations.-Cost of sales and operations represented costs incurred by IC-DISCs' in providing goods or services that generated receipts. For IC-DISCs' that acted as commission agents, the cost of sales and operations was combined into, and an integral part of, the calculation of the IC-DISC commission.
Current-year export gross receipts of IC-DISCs' and related U.S. persons.-See Export gross receipts (below) and Related U.S. persons (below).
Current-year tax-deferred income.-This amount represented the IC-DISC's taxable income after all current year taxable income amounts deemed distributed under Internal Revenue Code section 995(b)(1) were subtracted.
Export gross receipts.-Export gross receipts of the IC-DISC represented “qualified export receipts” from: (1) the sale, lease, or rental of export property; (2) services related and subsidiary to any qualified sale, lease, or rental of export property; (3) engineering or architectural services for construction projects located outside of the United States; and (4) export management services provided to other unrelated IC-DISC's to aid in promoting qualified export receipts. For IC-DISC's that acted as commission agents, export gross receipts included the total receipts on which the commission was earned, as well as the commission. Certain passive income amounts (dividends, interest, or capital or ordinary gains on sale of business property) received by IC-DISC's were not considered to be export gross receipts, but were considered to be a sub-category of “qualified export receipts” and were separately shown as “Other qualified export receipts” (see Other qualified export receipts).
Export promotion expenses.-These were expenses (excluding income taxes) incurred by an IC- DISC to advance the sale, lease, or other distribution of export property for use, consumption, or distribution outside the United States.
Export property.-The IC-DISC's export property was inventory and property held for sale or lease which: (1) had been made, manufactured, produced, grown, or extracted in the United States by a “person” other than an IC-DISC; (2) was held primarily for sale or lease in the ordinary course of business for direct use, consumption, or disposition outside the United States; and (3) had, at the time of sale or lease by the IC-DISC, not more than 50 percent of its fair market value attributable to imported articles.
IC-DISC gross income.-This was the sum of qualified and nonqualified receipts.
IC-DISC net income (deficit).-Net income (deficit) was calculated by subtracting the costs of sales and operations from IC-DISC gross income. Net income (deficit) was also shown in the tables portioned into net income (non-negative amounts, including zero) and deficit amounts (negative amounts).
IC-DISC shareholders.-Owners of an IC-DISC are referred to as “shareholders”, since not all IC-DISCs' are owned by other corporations. See Related U.S. persons, above.
IC-DISC shareholders' equity.-This was the sum of tax-deferred IC-DISC income, income deemed but not distributed to shareholders during the current tax year, and certain other retained earnings amounts. The sum of these accounts is the difference between Total assets and Total liabilities shown in the tables.
IC-DISC taxable income.-This was the IC-DISC's net income minus statutory special deductions (i.e., the “net operating loss deduction” and the dividends-received deduction). IC-DISC taxable income is computed to determine: (1) the IC-DISC's “earnings and profits” considered “deemed distributed” to IC-DISC shareholders for the current tax year; and (2) the interest charge on tax that would have been imposed on IC-DISC income had it not been subject to deferral.
IC-DISC taxable income attributable to excess qualified export receipts.-If the total of certain export gross receipts is greater than $10 million for the tax year, taxable income derived from export gross receipts above this amount is not eligible for deferral, and is deemed distributed to shareholders.
Producer's loans.-This qualified asset generally consisted of loans made from the IC-DISC's accumulated tax-deferred income to its parent company or any other U.S. person engaged in manufacturing, producing, growing, or extracting export property. A producer's loan must have been designated as such, have been evidenced by a note, have had a stated maturity not to exceed 5 years, and have been attributed to assets used in export production. If a producer's loan was renewed, it had to be re-qualified at the time of renewal. A producer's loan did not have to be traced to a specific investment by the domestic borrower, but was subject to certain limitations to assure it did not exceed the investment in assets that could have been attributable to production for export.
Qualified assets.-Qualified export assets included: (1) export property; (2) assets used in performing engineering or architectural services; (3) accounts receivable attributable to export transactions; (4) working capital; (5) producer's loan obligations; (6) certain stocks or securities held by the IC-DISC; (7) certain obligations issued or insured by the U.S. Export-Import Bank or the Foreign Credit Insurance Association; and (8) certain other deposits.
Qualified export receipts.-See export gross receipts.
Related U.S. persons.-IC-DISC related U.S. persons were: (1) individuals who were citizens or residents of the United States and controlled the IC-DISC; (2) domestic partnerships, estates, or trusts that controlled the IC-DISC; (3) domestic corporations that controlled the IC-DISC; and (4) domestic corporations that were controlled by the same person(s) that controlled the IC-DISC. Control meant direct or indirect ownership of more than 50 percent of the voting power of the stock entitled to vote in an IC-DISC or other domestic corporation. Under the stock attribution rules of the Internal Revenue Code section 267(c), stock held by related family members is considered to be held as if the family is one shareholder.
Tax-deferred IC-DISC income reported to shareholders.-This amount was reported on Form 1120-IC-DISC, Schedule K, Shareholders Statement of IC-DISC Distributions. An interest charge on the tax that would otherwise have been paid currently on this income amount was computed by IC-DISC shareholders on Form 8404, Computation of Interest Charge on DISC-Related Deferred Tax Liability.
Total assets.-Total assets were the sum of individual asset components reported in the end-of-year balance sheet on Form 1120 IC-DISC and reflected fair market value.
Total export promotion and other expenses.-Total export promotion and other expenses were the aggregate sum of all expenses, which included “export promotion expenses” (see above), and other expenses-bad debts, taxes and licenses, interest paid, charitable contributions, freight, freight insurance, and other expenses.
Total liabilities.-Total liabilities as tabulated from the IC-DISC end-of-year balance sheet excluded shareholder's equity accounts.
Total qualified export receipts and nonqualified receipts.-This sum was used as the starting point for the computation of the IC-DISC's net and taxable incomes. For IC-DISC's that acted as commission agents, total qualified export receipts and nonqualified receipts exclude the total receipts upon which the commission was earned, and therefore represent only the commission amounts. Total qualified export receipts and nonqualified receipts include passive income (dividends, interest, capital or ordinary gains) amounts received by IC-DISC's. IC-DISC passive income amounts may be characterized as either qualified export receipts or nonqualified gross receipts.
These statistics were compiled from Form 1120 IC-DISC returns with accounting periods ending between July 2000 and June 2001 and filed during Calendar Years 2000, 2001, or 2002. The data presented exclude “inactive” IC-DISC returns. An IC-DISC is considered to be inactive if no receipts, deductions, income, or distributions were reported on the return. In addition, returns for corporations designated as “former DISC's” or “former IC- DISC's” were excluded. Such corporations were those that did not qualify as a DISC or IC-DISC for the appropriate study year, but had undistributed income that was previously taxed or accumulated DISC or IC-DISC income.
The Tax Year 2000 IC-DISC study was designed to include the entire population of IC-DISC returns; however, certain returns were unavailable for the statistics. The complete 2000 IC-DISC study file included 450 returns, weighted to reflect an estimated population of approximately 786 active and inactive returns. Because the data were based upon all available returns, sampling error was not a limitation. With regard to nonsampling error, some of the data were inconsistently reported by taxpayers. Where possible, such inconsistencies were resolved to reflect provisions of the Internal Revenue Code and taxpayer intentions.
The products and services classification system used in the 2000 IC-DISC study was generally based on Internal Revenue Service instructions provided to the taxpayer for completion of Schedule N, Export Gross Receipts of the IC-DISC and Related U.S. Persons. Products and services reported by a taxpayer on each specific return were reviewed for consistency with product information provided in supporting schedules and other taxpayer attachments and with the principal business activity described on the return. For example, a return was reviewed if the taxpayer indicated engineering services on Schedule N despite the absence of any “engineering and architectural services income” on Schedule B, Gross Income. In addition, products and services reported by taxpayers on specific returns were reviewed for consistency with the major products and services group classification. Certain business activities, such as manufacturing, are not applicable to an IC-DISC. Therefore, an IC-DISC return reporting the manufacture of farm machinery equipment as the principal business activity would have been reviewed to ascertain if a more appropriate principal business activity was the wholesaling of farm machinery and equipment.
For purposes of these data, data classified by product or service were compiled using the IC-DISC's largest grossing export product (in terms of gross receipts), without regard to any entry for the IC-DISC's second largest product or service reported on the Schedule N. To this extent, the industry statistics contained in this data release may be slightly overstated for certain industries and slightly understated for others.
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