SOI Tax Stats - 2005 Metadata for U.S. Possessions Corporation Returns
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Accounts payable.—Accounts payable were liabilities on the end-of-year balance sheet consisting of relatively short-term liabilities not secured by promissory notes.
Accumulated amortization.—Accumulated amortization represented the portion of intangible assets that were written off in the current year as well as prior years.
Accumulated depletion.—Accumulated depletion represented a cumulative adjustment to depletable assets shown on the possession corporation’s books of account.
Accumulated depreciation.—The amounts shown for accumulated depreciation on the end-of-year balance sheet represented the portion of depreciable assets written off in the current year and all prior years.
Adjustments to stockholders’ equity.—These amounts primarily consisted of unrealized gains and losses from securities held “available for sale”, guarantees of employee stock ownership plan debt and compensation related to employee stock award plans.
Advertising.—Advertising expenses were allowed if they were ordinary and necessary and bore a reasonable relationship to the trade or business of the corporation.
Amortization.—Amortization was a deduction for the recovery of the costs of long-lived intangible assets.
Assets balancing adjustment.—For statistical purposes, negative end-of-year balance sheet asset accounts have been moved to, and included in, the asset balancing adjustment item. This procedure was adopted to address the increased usage of negative items being reported on corporate balance sheets.
Bad debts.—Bad debts occurring during the tax year were allowed as a deduction only for debts actually written off as uncollectible.
Business receipts.—Business receipts were the gross operating receipts of the corporation reduced by the cost of returned goods and allowances. Generally, they represented all of a corporation’s receipts except investment and incidental income.
Cash.—This end-of-year balance sheet asset item included the amount of actual money or instruments and claims which were usable and acceptable as money, including certificates of deposit.
Common stock.—This possessions corporation end-of-year balance sheet item included amounts shown for outstanding shares of common stock.
Compensation of officers.—Compensation of officers included salaries, wages, stock bonuses, and bonds and other forms of compensation if they were identified as having been paid to officers for personal services rendered. It did not include qualified deferred compensation, such as contributions to a 401(k) plan or salary reduction agreement, which were included in the statistics for pensions and profit sharing plans.
Contributions.—Contributions included gifts to charitable, religious, educational and similar organizations. A corporation could receive a larger deduction for contributing scientific property used for the care of the ill, needy or infants, or for research to an institution of higher education.
Cost of sales and operations.—Cost of sales and operations represented the costs incurred by the corporation in producing the goods or providing the services that generated the corporation’s business receipts. Included were costs of materials used in manufacturing, costs of goods purchased for resale, direct labor, and a share of overhead expenses, such as rents, utilities, supplies, maintenance, and repairs.
Cost of treasury stock.—This was the total value of issued common or preferred stock that had been reacquired and was held at the end of the accounting year by the possessions corporation.
Current mortgages, notes, and bonds payable.—This was the sum of mortgages, notes and bonds payable in less than one year from the possessions corporation end-of-year balance sheet.
Deficit.—This was the sum of net income amounts less than zero.
Depletable assets.—Depletable assets represented, in general, the gross end-of-year balance sheet value of mineral property, oil and gas wells, other natural deposits, standing timber, intangible development and drilling costs capitalized, and leases and leaseholds.
Depletion.—Depletion is a method for recovering the costs from exhaustion of mines, oil and gas wells, other natural deposits, and timber.
Depreciable assets.—Depreciable assets from the end-of-year balance sheet were the book value of tangible property subject to depreciation (such as buildings and equipment with a useful life of one year or more). In general, depreciable assets were the gross basis amounts before adjustment for accumulated depreciation.
Depreciation.—The depreciation deduction is a method for recovering the cost of investments in tangible assets that lose value as they are used to produce income.
Distributions to stockholders.—Distributions to stockholders represented cash and property (other than company stock) distributions to stockholders during the current year.
Dividends.—Dividends represented most distributions from the earnings and profits of companies incorporated in the United States and foreign countries.
Employee benefit programs.—This deduction consisted of contributions made by employers to such plans as death benefit plans, insurance plans, health plans, accident and sickness plans, and other welfare plans.
Existing credit claimant.—A corporation was an existing credit claimant with respect to a possession if the corporation: 1) was engaged in the active conduct of a trade or business within the possession on October 13, 1995; and 2) elected the benefits of the possessions credit effective for its taxable year that included October 13, 1995. A corporation that acquired all of the assets of a trade or business of an existing credit claimant qualified as an existing credit claimant.
Foreign tax credit.—The foreign tax credit is a credit against U.S. income tax for income taxes paid to foreign countries or U.S. possessions.
General business credit.—The general business credit consisted of a combination of several individual credits: 1) investment credit; 2) work opportunity credit; 3) welfare-to-work credit; 4) non-conventional source fuel credit; 5) research credit; 6) low-income housing credit; 7) enhanced oil recovery credit; 8) disabled access credit; 9) renewable electricity production credit; 10) Indian employment credit; 11) credit for employer social security and Medicare taxes paid on certain employee tips; 12) orphan drug credit; 13) new markets credit; 14) credit for employer-provided child care facilities and services; 15) credit for contributions to certain community development plans; 16) biodiesel fuels credit; and 17) low sulfur diesel fuel production credit.
Income subject to tax.—This was generally the amount of income subject to tax at the corporate level. For most corporations, income subject to tax consisted of net income minus statutory special deductions (i.e., the net operating loss deduction and special deductions for dividends).
Intangible assets.—Intangible assets represented the total gross value of goodwill, contracts, copyrights, formulas, licenses, patents, registered trademarks, franchises, covenants not to compete, and similar assets that were amortizable for tax purposes.
Interest.—Taxable interest, a component of total receipts, included interest on U.S. government obligations, loans, notes, mortgages, arbitrage bonds, nonexempt private activity bonds, corporate bonds, bank deposits, and tax refunds. The statistics also included dividends from savings and loans and mutual savings banks, federal funds sold, finance charges, and sinking funds.
Interest on State and local government obligations.—The interest received from certain government obligations was not subject to U.S. income tax. These tax-exempt obligations included those issued by States, municipalities, and other local governments, the District of Columbia, and U.S. possessions, including Puerto Rico. For statistical presentation, this interest was included in total receipts. However, it was not included in net income (less deficit) or income subject to tax.
Interest paid.—Interest paid consisted of interest paid by the corporation on all business indebtedness.
Inventories.—These were assets reported on the end-of-year balance sheet that represented the U.S. Possessions corporation’s inventories as calculated for tax purposes.
Inventories in Government obligations.—These were assets reported on the end-of-year balance sheet that represented the U.S. Possessions corporations’ inventories of government bonds or notes as calculated for tax purposes.
Land.—Land was reported on the possessions corporation end-of-year balance sheet. Land is a depreciable asset.
Liabilities balancing adjustment.—For statistical purposes, negative end-of-year balance sheet liability accounts have been moved to, and included in, the liability balancing adjustment item. This procedure was adopted to address the increased usage of negative items being reported on corporate balance sheets.
Loans from stockholders.—Loans from stockholders included long-term loans to the possessions corporation from holders of the corporation’s stock.
Loans to stockholders.—Loans to stockholders included long-term loans from the possessions corporation to holders of the corporation’s stock.
Long-term mortgages, notes, and bonds payable.—This was the sum of mortgages, notes and bonds payable in more than one year from the possessions corporation end-of-year balance sheet.
Mortgage and real estate loans.—Mortgages and real estate loans were assets reported on the end-of-year balance sheet. In the possessions corporation balance sheet, mortgages and real estate loans were not separated by length of time to maturity of the obligation.
Net gain, noncapital assets.—This item includes all gains from the sale or exchange of noncapital assets. Noncapital assets included property used in a trade or business plus certain other transactions given special treatment by statute.
Net income.—This was the sum of net income amounts greater than or equal to zero.
Net income (less deficit).—This was the corporation’s net profit or loss from taxable sources of income reduced by allowable deductions.
Net income (less deficit) per books.--This was the corporation’s net profit or loss from taxable sources of income reduced by allowable deductions calculated using “book or accounting rules” and values for income and deductions in lieu of statutory tax rules and values for taxable sources of income and allowable deductions.
Net long-term capital gain (loss).—This was a gain or loss from the sale or exchange of capital assets held for longer than one year.
Net loss, noncapital assets.—This item includes all losses from the sale or exchange of noncapital assets. Noncapital assets included property used in a trade or business plus certain other transactions given special treatment by statute.
Net short-term capital gain (loss).—This was a gain or loss from the sale or exchange of capital assets held for one year or less.
Notes and accounts receivable.—Notes and accounts receivable were assets on the end-of-year balance sheet consisting of relatively short-term assets not secured by promissory notes.
Other assets.—Other assets included non-current assets not allocable to a specific account listed on the possessions corporation end-of-year balance sheet.
Other current assets.—Other current assets included assets receivable in less than one year not allocable to a specific account listed on the possessions end-of-year balance sheet reported as short-term.
Other current liabilities.—Other liabilities included liabilities payable in less than one year not allocable to a specific account listed on the possessions corporation end-of-year balance sheet.
Other deductions.—Other deductions comprised: (1) business expenses which were not allocable to a specific deduction item on the tax return, or which were not included elsewhere on the tax return; and (2) certain amounts which were given special treatment in the course of statistical processing.
Other receipts.—Other receipts included amounts not elsewhere reported on the Form 1120, such as: income from minor operations; cash discounts; income from claims, license rights, judgments, and joint ventures; net amount earned under operating agreements; profit from commissaries; profit on prior-years’ collections (installment basis); profit on purchase of a corporation’s own bonds; recoveries of losses and bad debts previously claimed for tax purposes; refunds for the cancellation of contracts; auto lease inclusion income; and income from sales of scrap, salvage or waste.
Other (tax) credits.—Other credits generally consisted of the credit for prior year minimum tax and bond credits.
Paid-in or capital surplus.—This balance sheet item comprised additions to the possessions corporation capital from sources other than earnings. These sources included receipts from the sale of capital stock in excess of stated value, stock redemptions or conversions, and similar transactions. Paid-in or capital surplus could be negative.
Passive activity.—Passive activity generally included trade or business activity in which the corporation did not materially participate for the tax year, and with exceptions, rental activities regardless of the corporation’s participation.
Pension, profit-sharing, stock bonus, and annuity plans.—This deduction consisted of corporation contributions to qualified pension, profit-sharing, or other funded deferred compensation plans.
Preferred stock.—This possessions corporation end-of-year balance sheet item included amounts shown for outstanding shares of preferred stock.
Qualified possessions source investment income.—Income that was attributable to the investment of funds derived from the active conduct of a trade or business in the same U.S. possession.
Rents paid.—Rents paid consisted of rents paid for the use of land, buildings or structures, leased roads, and the leasing of automobiles.
Repairs.—Repairs were the costs of maintenance and incidental repairs that did not add to the value or appreciably prolong the life of the property.
Rents.—These were gross amounts received for the use of occupancy of property by corporations whose principal activities did not involve operating rental properties. When rents were a significant portion of a corporation’s operating income, they were included in the statistics for business receipts rather than in rents. These corporations included some manufacturers and public utility companies, as well as businesses whose principal operating income was expected to be rents, such as hotels, motels, and other lodging places.
Regular tax.—This was the tax generated by application of statutory tax rates from the regular tax rate schedules.
Retained earnings, appropriated.—These were earnings set aside for specific purposes and not available for distribution to shareholders.
Retained earnings, unappropriated.—These were earnings and profits of the possessions corporation less reserves (these reserves were shown in retained earnings, appropriated). Dividends and distributions to shareholders were paid from this account. These accumulated earnings included income from normal and discontinued operations, extraordinary gains and losses, and prior period adjustments.
Royalties.—Royalties were gross payments received, generally on an agreed percentage basis, for the use of property rights before taking deductions for depletion, taxes, etc. Included were amounts received from such properties as copyrights, patents, and trademarks; and from natural resources such as timber, mineral mines, and oil wells.
Taxes paid.—Taxes paid included ordinary state and local taxes paid or accrued during the year, social security and payroll taxes; unemployment insurance taxes; excise taxes, import and tariff duties; and business, license and privilege taxes, income and profit taxes paid to foreign countries or U.S. possessions taxes (unless these were claimed as the possessions tax credit). Taxes not deductible generally included Federal income and excess profits taxes, gift taxes, and taxes assessed against local benefits.
Tax-exempt securities.—This end-of-year balance sheet item comprised: (1) state and local government obligations, the interest on which was excludable from gross income under section 103(a); and (2) stock in a mutual fund or other regulated investment company that distributed exempt-interest dividends during the tax year of the corporation.
Total assets.—Total assets were the sum of individual asset components reported in the possessions corporation end-of-year balance sheet and reflected fair market value.
Total deductions.—Total deductions was the sum of the following items, each discussed under its own heading: 1) Cost of sales and operations; 2) Compensation of officers; 3) Salaries and wages; 4) Repairs; 5) Bad debts; 6) Rents paid; 7) Taxes paid; 8) Interest paid; 9) Contributions; 10) Amortization; 11) Depreciation; 12) Depletion; 13) Advertising; 14) Pension, profit-sharing, stock bonus, and annuity plans; 15) Employee benefit programs; 16) Net loss, noncapital assets; and 17) Other deductions.
Total income tax before credits.—Total income tax before credits was the sum of the following taxes; 1) Regular income tax as calculated from the regular tax rate schedules; 2) Alternative minimum tax; 3) Personal holding company tax; 4) Recapture and other taxes; 5) Excess net passive income taxes; 6) tax on net income from foreclosure property; 6) Section 857(b) (5) tax; 7) tax on net income from prohibited transactions; 8) Reciprocal tax; 9) Section 857 (b) (7) (A) tax; and 10) Section 856 tax.
Total liabilities and stockholder’s equity.—Total liabilities and stockholder’s equity were the sum of individual liability and stockholder’s equity components reported in the possessions corporation end-of-year balance sheet and reflected fair market value.
Total receipts.—Total receipts was the sum of the following items, each discussed under its own heading: 1) business receipts; 2) Interest, except State and local government obligations; 3) Interest on State and local government obligations; 4) Rents; 5) Royalties; 6) Net short-term capital gain (loss); 7) Net long-term capital gain (loss); 8) Net gain, noncapital assets; 9) Dividends; and 10) Other receipts.
Total receipts less total deductions.—This item differed from net income (less deficit) for tax purposes in that it included nontaxable interest on state and local government obligations and excluded constructive taxable income from related foreign corporation.
Total U.S. income tax after credits.—This was the sum of regular income tax (see above), alternative minimum tax, environmental tax and personal holding company tax minus the U.S. possessions tax credit, the foreign tax credit, the general business credit and other credits.
U.S. possessions tax credit.—The U.S. possessions tax credit was a tax credit for taxes paid by possessions corporations on income generated by business activities conducted in U.S. possessions.
The 2005 statistics were based on data compiled from all returns filed by U.S. possessions corporations with accounting periods ending between July 2005 and June 2006. Consequently, the data were not subject to sampling error.
The data may, however, contain non-sampling errors. Where possible, inconsistencies in the data were resolved to conform to provisions of the Internal Revenue Code. In cases where information reported was not logical, other data on the return were used to resolve errors.
Data were collected from Form 1120, U.S. Corporation Income Tax Return, for possessions corporations and supplemented by information collected from Form 5712, Election to be Treated as a Possessions Corporation Under Section 936, Form 5735, Possessions Corporation Tax Credit (Under Sections 936 and 30A), and Schedule P (Form 5735), Allocation of Income and Expenses Under Section 936(h)(5). Due to processing differences, slight variations exist between the Tax Year 2005 data presented in this section and the more limited statistics published in Statistics of Income-2005, Corporation Income Tax Returns.
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