Possessions corporation

Possessions corporation

A type of corporation permitted under the US tax code whose branch operation in a US possession can obtain tax benefits as though it were operating as a foreign subsidiary.

Possessions Corporation

A U.S. corporation that does a significant amount of business in an American overseas possession, usually in Puerto Rico. The IRS allows these corporations to take a tax credit for the business they conduct in the possessions. See also: Form 5735.
References in periodicals archive ?
In general, to qualify for the possessions tax credit, a corporation must be a domestic corporation (organized under the laws of one of the 50 states), and have filed Form 5712, Election To Be Treated as a Possessions Corporation Under Section 936.
A 936 possessions corporation with a 20 percent or more average U.
In general, to qualify for the possessions tax credit, a corporation must be a domestic corporation (organized under the laws of one of the 50 states) and have filed Form 5712, Election To Be Treated us a Possessions Corporation Under Section 936.
providing guidance to distinguish a product-line extension from a new trade or business in connection with the operation of a possessions corporation under the amendments to Code section 936 as revised by the Small Business Job Protection Act of 1996) or as a result of ongoing developments in the tax law (e.
Possessions Biannually Forms 1120-Corporate Corporations Income Tax Return, Form 5712-Election to be Treated as a Possessions Corporation and Form 5735-Possessions Corporation Tax Credit Allowed Under Section 936 Individual Foreign Tax Every fifth Form 1040-U.
1) The possessions corporation may elect one of three methods to determine taxable income: (i) the general pricing rule, which essentially treats the possessions corporation as a contract manufacturer by denying tax-free treatment to income attributable to any intangible developed by a U.
developer of the intangible used by the possessions corporation, relegating the possessions corporation to a contract-manufacturing profit based on a return on assets.
In general, to qualify for the possessions tax credit, a corporation must be a domestic corporation, organized under the laves of one of the 50 states, and have filed Form 5712, Election To Be Treated as a Possessions Corporation under Section 936.
The White Paper's analysis of the arm's-length return method is focused on the issues which have faced the IRS (the possessions corporation manufacturing arms in Lilly and Searle, and the offshore marketing arms in DuPont and Hospital Corporation of America).
corporation must have filed Form 5712, Election to be Treated as a Possessions Corporation under Section 936.
These corporations include FSCs, IC-DISCs, S corporations, electing S corporations, personal service corporations, controlled foreign corporations (CFCs), personal CFCs, certain tax-exempt organizations, possessions corporations, certain cooperative associations and certain corporations with required tax years.
possessions corporations is prepared every two years on the activities of domestic corporations that qualify for a possession's tax credit by deriving at least 80 percent of gross income from sources within a qualifying U.