This article explains the necessary steps a corporation must take to make an election to be treated as an Interest Charge Domestic International Sales Corporation (IC-DISC). It describes the eligibility requirements that must be met for the election to be successful and outlines filing deadlines and procedures.
What is Form 4876-A?
Form 4876-A is the form used for a corporation to elect to be treated as an Interest Charge Domestic International Sales Corporation (IC-DISC). Its purpose is to provide benefits for international sales during the tax year, with details such as 95% of gross receipts being qualified export receipts, one class of stock, separate books and records, and shareholder consent to the election. Each shareholder must own stock in the corporation while the election is in effect, but certain corporations such as S corporations or financial institutions are ineligible for IC-DISC treatment. The corporation must file this form within 90 days of the beginning of the tax year or 90 days before the first day of the tax year if this is not its first year.
H2-2 IRS Form 4876-A – Who Needs to Fill It Out?
IRS Form 4876-A is necessary to elect to be labeled an Interest Charge Domestic International Sales Corporation (IC-DISC). In order to qualify, a corporation must be organized under the laws of a certain state or the District of Columbia, have only one class of stock, and keep separate books and records. Financial institutions and other ineligible organizations listed in section 992(d) are not eligible for this form. Form 4876-A must be completed and filed within 90 days after the beginning of the corporation’s first tax year. All shareholders, as of the first day of the tax year, must also consent to the election for it to be valid. Form 4876-A should be filed with the IRS Service Center where the corporation will file their annual return, Form 1120-IC-DISC.
Step-by-Step: Form 4876-A Instructions For Filling Out the Document
The Form 4876-A is used by a corporation to elect to be treated as an Interest Charge Domestic International Sales Corporation (IC-DISC). To qualify, the corporation must be organized under the laws of a state or the District of Columbia, have only one class of stock with a par or stated value of at least $2,500, 95% of their gross receipts must be qualified export receipts and 95% of their adjusted basis of qualified export assets must be met. Additionally, their tax year must conform to the tax year of the shareholder that has the highest percentage of voting power. This election must be filed with the IRS Service Center where the corporation will file its annual return, Form 1120-IC-DISC. For the election to be valid, all of the corporation’s shareholders must consent to it either within 90 days after the beginning of the tax year or during the 90-day period immediately preceding the first day of the tax year.
Below, we present a table that will help you understand how to fill out Form 4876-A.
| Information Required for Form 4876-A | Details |
|---|---|
| IC-DISC Election | Electing to be treated as an Interest Charge Domestic International Sales Corporation (IC-DISC) |
| Qualification Criteria | Meeting the criteria related to organization, stock, gross receipts, and assets |
Do You Need to File Form 4876-A Each Year?
As soon as the IC-DISC election is made, it is in effect until terminated or revoked. For the first tax year in which the corporation wishes to be treated as an IC-DISC, they must file Form 4876-A within 90 days of the start of that tax year. For any other tax year, the corporation must make the election within the prior 90-day period. Consent from all shareholders of the corporation as of the first day of the tax year is required for the election to be valid. Form 4876-A should be filed with the IRS Service Center where the corporation submits its annual return, Form 1120-IC-DISC.
Download the official IRS Form 4876-A PDF
On the official IRS website, you will find a link to download Form 4876-A. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 4876-A
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