Form 1120-IC-DISC, Schedule P, Intercompany Transfer Price or Commission
Income from an IC-DISC is generally taxed directly to the shareholders, not the corporation (see above under Form 1120-IC-DISC, Schedule P).
According to filings of
Form 1120-IC-DISC, Interest Charge Domestic International Sales Corporation Return, IC-DISCs distributed $516.2 million to shareholders in 2010.
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.
Little additional overhead or operating cost is associated with the IC-DISC (they do need to file an annual information return,
Form 1120-IC-DISC, Interest Charge Domestic International Sales Corporation Return).
The guidelines then instruct the examining agent to review the information from a broadly conceptual approach, keeping in mind whether (1) the workpapers and related
Form 1120-IC-DISC, Schedules P, Intercompany Transfer Price or Commission, were prepared on a tax basis (as opposed to book basis); (2) the expense allocations are reasonable (i.e., large expenses not allocated to export income should be scrutinized); (3) the intercompany pricing rules of Sec.
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.