1118 Foreign Tax Credit-Corporations

Note: The draft you are looking for begins on the next page.

Caution: DRAFT—NOT FOR FILING
This is an early release draft of an IRS tax form, instructions, or publication,
which the IRS is providing for your information. Do not file draft forms and do
not rely on draft forms, instructions, and publications for filing. We do not
release draft forms until we believe we have incorporated all changes (except
when explicitly stated on this coversheet). However, unexpected issues
occasionally arise, or legislation is passed—in this case, we will post a new draft
of the form to alert users that changes were made to the previously posted draft.
Thus, there are never any changes to the last posted draft of a form and the
final revision of the form. Forms and instructions generally are subject to OMB
approval before they can be officially released, so we post only drafts of them
until they are approved. Drafts of instructions and publications usually have
some changes before their final release.
Early release drafts are at IRS.gov/DraftForms and remain there after the
final release is posted at IRS.gov/LatestForms. All information about all forms,
instructions, and pubs is at IRS.gov/Forms.
Almost every form and publication has a page on IRS.gov with a friendly
shortcut. For example, the Form 1040 page is at IRS.gov/Form1040; the Pub.
501 page is at IRS.gov/Pub501; the Form W-4 page is at IRS.gov/W4; and the
Schedule A (Form 1040/SR) page is at IRS.gov/ScheduleA. If typing in a link
above instead of clicking on it, be sure to type the link into the address bar of
your browser, not a Search box.
If you wish, you can submit comments to the IRS about draft or final forms,
instructions, or publications at IRS.gov/FormsComments. We cannot respond to
all comments due to the high volume we receive and may not be able to
consider many suggestions until the subsequent revision of the product.
If you have comments on reducing paperwork and respondent (filer) burden,
with respect to draft or final forms, please respond to the relevant information
collection through the Federal Register process; for more info, click here.

DRAFT AS OF
July 14, 2021
DO NOT FILE

1118

Foreign Tax Credit—Corporations

Form
(Rev. December 2021)
Department of the Treasury
Internal Revenue Service

For calendar year 20

Name of corporation

, or other tax year beginning

, 20

, and ending

Use a separate Form 1118 for each applicable category of income (see instructions).
a Separate Category (Enter code—see instructions.) . . . . . . . . . . . . . . . . . . . .
b If code 901j is entered on line a, enter the country code for the sanctioned country (see instructions) . . .
c If one of the RBT codes is entered on line a, enter the country code for the treaty country (see instructions) .

Schedule A

OMB No. 1545-0123

Attach to the corporation’s tax return.
▶ Go to www.irs.gov/Form1118 for instructions and the latest information.
▶

.
.
.

.
.
.

.
.
.

.
.
.

.
.
.

.
.
.

.
.
.

.
.
.

Attachment
Sequence No.

, 20

118

Employer identification number

.
.
.

.
.
.

.
.
.

▶
▶
▶

Income or (Loss) Before Adjustments (Report all amounts in U.S. dollars. See Specific Instructions.)
2. Foreign Country or
U.S. Possession
(enter two-letter code—
use a separate line for
each) (see instructions)

1. EIN or Reference ID Number
(see instructions)*

A
B
C
Totals (add lines A through C)
6. Gross Rents, Royalties,
and License Fees

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

(a) Exclude Gross-Up

(b) Gross-Up (section 78)

9. Currency Gain

10. Currency Gain Code
(see instructions)

4. Dividends
(see instructions)

5. Interest

11. Other
(attach schedule)

12. Total
(add columns 3(a)
through 9 and 11)

(f) Expenses Allocable
to Sales Income

(g) Expenses Allocable
to Gross Income From
Performance of Services

▶

8. Gross Income From
Performance of Services

7. Sales

Gross Income or (Loss) From Sources Outside the United States

3. Inclusions Under Sections 951(a)(1) and 951A
(see instructions)

A
B
C
Totals

13. Allocable Deductions
(a) Dividends
Received Deduction
(see instructions)

(b) Deduction Allowed Under
Section 250(a)(1)(A)—Foreign
Derived Intangible Income

(c) Deduction Allowed Under
Section 250(a)(1)(B)—Global
Intangible Low-Taxed Income

Rental, Royalty, and Licensing Expenses
(d) Depreciation, Depletion,
and Amortization

(e) Other Allocable
Expenses

A
B
C
Totals

13. Allocable Deductions (continued)

(h) Currency Loss

(i) Currency Loss Code
(see instructions)

(j) Other Allocable
Deductions
(attach schedule)
(see instructions)

(k) Total Allocable
Deductions
(add columns 13(a)
through 13(h) and 13(j))

14. Apportioned Share
of Deductions
(enter amount from
applicable line of
Schedule H, Part I,
column (b), and
Schedule H, Part II,
column (d))

15. Net Operating
Loss Deduction

16. Total Deductions
(add columns 13(k)
through 15)

17. Total Income or (Loss)
Before Adjustments
(subtract column 16
from column 12)

A
B
C
Totals

* For section 863(b) income, NOLs, income from RICs, high-taxed income, section 951A, and reattribution of income by reason of disregarded payments, use a single line (see instructions). Also, for
reporting branches that are QBUs, use a separate line for each such branch.
For Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 10900F

Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 2

Schedule B
Foreign Tax Credit (Report all foreign tax amounts in U.S. dollars.)
Part I—Foreign Taxes Paid, Accrued, and Deemed Paid (see instructions)

2. Foreign Taxes Paid or Accrued (attach schedule showing amounts in foreign currency and conversion rate(s) used)

1. Credit Is Claimed for Taxes
(check one):
Paid

Tax Withheld at Source on:

Accrued

Date Paid

(a) Dividends

Date Accrued

A
B
C
Totals (add lines A through C)

.

▶

(b) Distributions of
Previously Taxed
Earnings and Profits

(c) Branch Remittances

(e) Rents, Royalties,
and License Fees

(d) Interest

(f) Other

2. Foreign Taxes Paid or Accrued (attach schedule showing amounts in foreign currency and conversion rate(s) used) (continued)
Other Foreign Taxes Paid or Accrued on:
(g) Sales

(h) Services Income

(j) Total Foreign Taxes Paid or Accrued
(add columns 2(a) through 2(i))

(i) Other

3. Tax Deemed Paid
(see instructions)

A
B
C
Totals

Part II—Separate Foreign Tax Credit (Complete a separate Part II for each applicable category of income.)
1a

Total foreign taxes paid or accrued (total from Part I, column 2(j))

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

1a

b Foreign taxes paid or accrued by the corporation during prior tax years that were suspended due to the rules of
section 909 and for which the related income is taken into account by the corporation during the current tax year
(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1b
2
Total taxes deemed paid (total from Part I, column 3) . . . . . . . . . . . . . . . . . . . . .
2
)
3
Reductions of taxes paid, accrued, or deemed paid (enter total from Schedule G, Part I) . . . . . . . . . .
3 (
4
Taxes reclassified under high-tax kickout . . . . . . . . . . . . . . . . . . . . . . . . .
4
5
Enter the sum of any carryover of foreign taxes (from Schedule K, line 3, column (xiv), and from Schedule I, Part III,
line 3) plus any carrybacks to the current tax year . . . . . . . . . . . . . . . . . . . . . .
5
6
Total foreign taxes (combine lines 1a through 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
7
Enter the amount from the applicable column of Schedule J, Part I, line 11 (see instructions). If Schedule J is not required to be completed,
enter the result from the “Totals” line of column 17 of the applicable Schedule A . . . . . . . . . . . . . . . . . . . . .
7
8a Total taxable income from all sources (enter taxable income from the corporation’s tax return) . . . . . . . .
8a
b Adjustments to line 8a (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . .
8b
c Subtract line 8b from line 8a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8c
9
Divide line 7 by line 8c. Enter the resulting fraction as a decimal (see instructions). If line 7 is greater than line 8c, enter 1 . . . . . . . .
9
10
Total U.S. income tax against which credit is allowed (regular tax liability (see section 26(b)) minus any American Samoa economic development
credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
11
Multiply line 9 by line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
12
Increase in limitation (section 960(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
13
Credit limitation (add lines 11 and 12) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
14
Separate foreign tax credit (enter the smaller of line 6 or line 13). Enter here and on the appropriate line of Part III . . . . . . . . . ▶ 14
Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 3
Schedule B
Foreign Tax Credit (Report all foreign tax amounts in U.S. dollars.) (continued)
Part III—Summary of Separate Credits (Enter amounts from Part II, line 14, for each applicable category of income. Do not include taxes paid to sanctioned countries.)
Form 1118 (Rev. 12-2021)

1
2
3
4
5
6
7
8
9

Credit for taxes on section 951A category income . . . . . . . . . . . . . . . . . . . . . .
1
Credit for taxes on foreign branch category income . . . . . . . . . . . . . . . . . . . . . .
2
Credit for taxes on passive category income . . . . . . . . . . . . . . . . . . . . . . . .
3
Credit for taxes on general category income . . . . . . . . . . . . . . . . . . . . . . . .
4
Credit for taxes on section 901(j) category income (combine all such credits on this line) . . . . . . . . . .
5
Credit for taxes on income re-sourced by treaty (combine all such credits on this line) . . . . . . . . . .
6
Total (add lines 1 through 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction in credit for international boycott operations (see instructions) . . . . . . . . . . . . . . . . .
Total foreign tax credit (subtract line 8 from line 7). Enter here and on the appropriate line of the corporation’s tax return

Schedule C

.
.
.

.
.
.

.
.
.

.
.
.

.
.
.

.
.
.

.
.
▶

7
8
9

Tax Deemed Paid With Respect to Section 951(a)(1) Inclusions by Domestic Corporation Filing Return (Section 960(a))
Use this schedule to report the tax deemed paid by the corporation with respect to section 951(a)(1) inclusions of earnings from foreign corporations under
section 960(a). For each line in Schedule C, include the column 10 amount in column 3 of the line in Schedule B, Part I, that corresponds with the identifying
number specified in column 1 of Schedule A and that also corresponds with the identifying number entered in column 1b of this Schedule C (see instructions).
1b. EIN or Reference ID Number of the Foreign Corporation
(see instructions)

1a. Name of Foreign Corporation

2. Tax Year End
(Year/Month)
(see instructions)

6. Total Net Income in
Subpart F Income Group
(in functional currency
of foreign corporation)

.

.

.

.

.

.

.

(a) Reg. sec.
1.960-1(d)(2)(ii)(B)(2)
(enter code)

(b) Reg. sec.
1.904-4(c)(3)(i)-(iv)
(enter code)

(c) Unit

8. Section 951(a)(1) Inclusion Attributable to Subpart F Income Group

7. Total Current Year Taxes in
Subpart F Income Group
(in U.S. dollars)

Total (add amounts in column 10) .

5. Subpart F Income Group

4. Functional Currency
of Foreign Corporation
(enter code—
see instructions)

3. Country of Incorporation
(enter country code—
see instructions)

1c. QBU Reference ID (if applicable)

(a) Functional Currency

.

.

.

.

.

.

.

.

.

(b) U.S. Dollars

.

.

.

.

.

.

.

.

.

.

.

10. Tax Deemed Paid
(multiply column 7
by column 9)

9. Divide Column 8(a)
by Column 6

.

.

.

.

.

.

.

.

.

▶
Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Form 1118 (Rev. 12-2021)

Schedule D

Page 4

Tax Deemed Paid With Respect to Section 951A Income by Domestic Corporation Filing the Return (Section 960(d))
Use this schedule to figure the tax deemed paid by the corporation with respect to section 951A inclusions of earnings from foreign corporations under
section 960(d).

Part I—Foreign Corporation’s Tested Income and Foreign Taxes

1b. EIN or Reference ID Number
of the Foreign Corporation
(see instructions)

1a. Name of Foreign Corporation

5. Pro Rata Share of CFC’s Tested Income
From Applicable Form 8992 Schedule
(see instructions)

6. CFC’s Tested Income
From Applicable Form 8992 Schedule
(see instructions)

▶

Total (add amounts in column 9)

.

Total (add amounts in column 5)
. . . . . . . . . . . .

8. CFC’s Tested Foreign Income Taxes
From Schedule Q (Form 5471)
(see instructions)

7. Divide Column 5
by Column 6

.

.

.

.

.

.

.

.

3. Country of
Incorporation
(enter country
code—see
instructions)

2. Tax Year End
(Year/Month)
(see instructions)

.

.

.

.

.

.

.

.

.

.

.

.

.

.

4. Functional
Currency of
Foreign
Corporation
(enter code)

9. Pro Rata Share of Tested Foreign Income
Taxes Paid or Accrued by CFC
(multiply column 7 by column 8)

▶

Part II—Foreign Income Tax Deemed Paid
1. Global Intangible Low-Taxed Income
(section 951A inclusion)

2. Inclusion Percentage.
Divide Part II, Column 1, by
Part I, Column 5 Total

3. Multiply Part I, Column 9 Total, by
Part II, Column 2 Percentage

4. Tax Deemed Paid
(Multiply Part II, column 3, by 80% (0.80).
Enter the result here and include on the line of
Schedule B, Part I, column 3, that corresponds with
the line with “951A” in column 2 of Schedule A.)

Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

Schedule E

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 5

Tax Deemed Paid With Respect to Previously Taxed Earnings and Profits (PTEP) by Domestic Corporation Filing the Return
(Section 960(b))
Part I—Tax Deemed Paid by Domestic Corporation
Use this part to report the tax deemed paid by the domestic corporation with respect to distributions of PTEP from first-tier foreign corporations under section 960(b). For each line
in Schedule E, Part I, include the column 11 amount in column 3 of the line in Schedule B, Part I, that corresponds with the identifying number specified in column 1 of Schedule A
and that also corresponds with the identifying number specified in column 1b of this Schedule E, Part I (see instructions).
1b. EIN or Reference ID Number
of the Foreign Corporation
(see instructions)

1a. Name of Distributing Foreign Corporation

8. Total Amount of the PTEP Group
Taxes With Respect to PTEP Group
Within an Annual PTEP Account

7. Total Amount of PTEP in the PTEP Group
Within an Annual PTEP Account

Total (add amounts in column 11) .

.

.

.

.

.

.

.

.

.

.

9. Distribution From the PTEP Group
Within an Annual PTEP Account

.

.

.

.

.

.

.

.

3. Country of
Incorporation
(enter country
code—see
instructions)

2. Tax Year End
(Year/Month)
(see instructions)

.

.

.

.

4. Functional Currency
of the Distributing
Foreign Corporation

.

.

.

.

.

.

.

.

.

6. Annual
PTEP Account
(enter year)

11. Foreign Income Taxes
Properly Attributable to PTEP and
Not Previously Deemed Paid
(multiply column 8 by column 10)

10. Divide Column 9
by Column 7

.

5. PTEP
Group
(enter code)

.

.

▶
Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

Schedule E

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 6

Tax Deemed Paid With Respect to Previously Taxed Earnings and Profits (PTEP) by Domestic Corporation Filing the Return
(Section 960(b)) (continued)
Part II—Tax Deemed Paid by First- and Lower-Tier Foreign Corporations
Use this part to report the tax deemed paid by a foreign corporation with respect to distributions of PTEP from lower-tier foreign corporations under section 960(b) that relate to
distributions reported in Part I (see instructions).

7. Functional Currency
of the Distributing
Foreign Corporation

1a. Name of Distributing Foreign Corporation

1b. EIN or Reference ID Number of the Foreign Corporation
(see instructions)

2. Tax Year End
(Year/Month)
(see instructions)

3. Country of
Incorporation
(enter country
code—see
instructions)

4a. Name of Recipient Foreign Corporation

4b. EIN or Reference ID Number of the Foreign Corporation
(see instructions)

5. Tax Year End
(Year/Month)
(see instructions)

6. Country of
Incorporation
(enter country
code—see
instructions)

8. PTEP Group
(enter code)

9. Annual PTEP
Account
(enter year)

10. Total Amount of
PTEP in the PTEP Group
Within an Annual
PTEP Account

11. Total Amount of
the PTEP Group Taxes
With Respect to PTEP Group
Within an Annual
PTEP Account

12. PTEP Distributed

13. Divide Column 12
by Column 10

14. Foreign Income Taxes
Properly Attributable
to PTEP and Not
Previously Deemed Paid
(multiply column 11
by column 13)

Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 7

Schedule F
Reserved
Schedule G
Reductions of Taxes Paid, Accrued, or Deemed Paid
Part I—Reduction Amounts
A

Reduction of taxes under section 901(e)—Attach separate schedule .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

A

B

Reduction of foreign oil and gas taxes—Enter amount from Schedule I, Part II, line 4

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

B

C

Reduction of taxes due to international boycott provisions—Enter appropriate portion from Schedule C (Form 5713) (see instructions).
Important: Enter only “specifically attributable taxes” here . . . . . . . . . . . . . . . . . . . . . . . . . .

.

C

D

Reduction of taxes for section 6038(c) penalty—Attach separate schedule

E

Taxes suspended under section 909 .

.

.

.

.

.

.

.

F

Reduction for disallowed taxes under section 965(g) .

.

.

.

.

.

G

Reduction for disallowed taxes under section 245A

.

.

.

.

H

Other reductions in taxes (attach schedule—see instructions) .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

D

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

E

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

F

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

G

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

H

Total (add lines A through H). Enter here and on Schedule B, Part II, line 3 .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

▶

I

Check this box if, during the tax year, the corporation paid or accrued any foreign tax that was disqualified for credit under section 901(m)

.

.

.

.

.

.

.

.

.

▶

J

Check this box if, during the tax year, the corporation paid or accrued any foreign tax that was disqualified for credit under section 901(j), (k), or (l) .

.

.

.

.

.

.

▶

.

.

.

.

.

Part II—Other Information

Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 8

Schedule H
Apportionment of Certain Deductions (Complete only once for all categories of income.)
Part I—Research and Experimental Deductions

(a) Gross Receipts Method

Product Line #1 (SIC Code:

(i) Gross Intangible
Income

1
2
a
b
3

(ii) Gross
Receipts

)

(iii) R&E
Deductions

Product Line #2 (SIC Code:

(iv) Gross Intangible
Income

(v) Gross
Receipts

)
(vi) R&E
Deductions

(b) Total
R&E Deductions
(enter the sum of all
amounts entered in
all applicable “R&E
Deductions”
columns).

Total (see instructions) . . . . . . . . . . .
Exclusive apportionment (50%) to either:
U.S. source gross intangible income, or . . . . . .
Foreign source gross intangible income . . . . . .
Remaining R&E deductions to be apportioned (line 1
minus line 2a or line 2b) . . . . . . . . . . .
4
U.S. source gross intangible income/related gross
receipts/allocated and apportioned R&E deductions
a Gross intangible income/Taxpayer’s gross receipts . .
b Gross intangible income/Controlled parties’ gross receipts
c Gross intangible income/Uncontrolled parties’ gross
receipts . . . . . . . . . . . . . . . .
d Total line 4
. . . . . . . . . . . . . . .
5

Total foreign source gross intangible income/related
gross receipts/allocated and apportioned R&E deductions
a Gross intangible income/Taxpayer’s gross receipts . .
b Gross intangible income/Controlled parties’ gross receipts
c Gross intangible income/Uncontrolled parties’ gross
receipts . . . . . . . . . . . . . . . .
d Total line 5 . . . . . . . . . . . . . . .
Important: See Computer-Generated Schedule H in the instructions.
Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 9

Schedule H
Apportionment of Certain Deductions (Complete only once for all categories of income.) (continued)
Part I—Research and Experimental Deductions (continued)
(a) Gross Receipts Method

Product Line #1 (SIC Code:

(i) Gross Intangible
Income

6

(ii) Gross
Receipts

)

(iii) R&E
Deductions

Product Line #2 (SIC Code:

(iv) Gross Intangible
Income

(v) Gross
Receipts

)
(vi) R&E
Deductions

(b) Total
R&E Deductions
(enter the sum of all
amounts entered in
all applicable “R&E
Deductions”
columns).

Foreign source gross intangible income/related gross
receipts/allocated and apportioned R&E deductions
a Enter code
(1) Gross intangible income/Taxpayer’s gross receipts .
(2) Gross intangible income/Controlled parties’ gross receipts
(3) Gross intangible income/Uncontrolled parties’ gross receipts
(4) Add lines 6a(1), 6a(2), and 6a(3) . . . . . . .
(5) Amount of line 3 R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(6) Amount of line 2b R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(7) Total R&E deductions for this separate category. Add
lines 6a(5) and 6a(6) . . . . . . . . . . .
b Enter code
(1) Gross intangible income/Taxpayer’s gross receipts .
(2) Gross intangible income/Controlled parties’ gross receipts
(3) Gross intangible income/Uncontrolled parties’ gross receipts
(4) Add lines 6b(1), 6b(2), and 6b(3) . . . . . . .
(5) Amount of line 3 R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(6) Amount of line 2b R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(7) Total R&E deductions for this separate category. Add
lines 6b(5) and 6b(6) . . . . . . . . . . .

Note: Include the amount from column (b) of line 6a(7) in column 14 of the Schedule A that corresponds with the code entered on line 6a. If applicable, you should likewise include
the amount from column (b) of line 6b(7) in column 14 of the Schedule A that corresponds with the code entered on line 6b. On page 10, you should likewise include the amount(s)
from column (b) of lines 6c(7), 6d(7), and 6e(7) in column 14 of the Schedule A that corresponds with the code entered on lines 6c, 6d, and 6e, respectively.
Important: See Computer-Generated Schedule H in the instructions.
Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 10

Schedule H
Apportionment of Certain Deductions (Complete only once for all categories of income.) (continued)
Part I—Research and Experimental Deductions (continued)
(a) Gross Receipts Method

Product Line #1 (SIC Code:

(i) Gross Intangible
Income

c

(ii) Gross
Receipts

)

(iii) R&E
Deductions

Product Line #2 (SIC Code:

(iv) Gross Intangible
Income

(v) Gross
Receipts

)
(vi) R&E
Deductions

(b) Total
R&E Deductions
(enter the sum of all
amounts entered in
all applicable “R&E
Deductions”
columns).

Enter code
(1) Gross intangible income/Taxpayer’s gross receipts .
(2) Gross intangible income/Controlled parties’ gross receipts
(3) Gross intangible income/Uncontrolled parties’ gross receipts
(4) Add lines 6c(1), 6c(2), and 6c(3) . . . . . . .
(5) Amount of line 3 R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(6) Amount of line 2b R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(7) Total R&E deductions for this separate category. Add
lines 6c(5) and 6c(6) . . . . . . . . . . .
d Enter code
(1) Gross intangible income/Taxpayer’s gross receipts .
(2) Gross intangible income/Controlled parties’ gross receipts
(3) Gross intangible income/Uncontrolled parties’ gross receipts
(4) Add lines 6d(1), 6d(2), and 6d(3) . . . . . . .
(5) Amount of line 3 R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(6) Amount of line 2b R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(7) Total R&E deductions for this separate category. Add
lines 6d(5) and 6d(6) . . . . . . . . . . .
e Enter code
(1) Gross intangible income/Taxpayer’s gross receipts .
(2) Gross intangible income/Controlled parties’ gross receipts
(3) Gross intangible income/Uncontrolled parties’ gross receipts
(4) Add lines 6e(1), 6e(2), and 6e(3) . . . . . . .
(5) Amount of line 3 R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(6) Amount of line 2b R&E deductions apportioned to this
separate category . . . . . . . . . . . .
(7) Total R&E deductions for this separate category. Add
lines 6e(5) and 6e(6) . . . . . . . . . . .

Total foreign-source apportioned R&E deductions (add
lines 6a(7), 6b(7), 6c(7), 6d(7), and 6e(7)). This should
equal the amount entered on line 5d of this column . ▶
Important: See Computer-Generated Schedule H in the instructions.
7

Form 1118 (Rev. 12-2021)

Form 1118 (Rev. 12-2021)

DRAFT AS OF
July 14, 2021
DO NOT FILE

Page 11

Schedule H
Apportionment of Certain Deductions (Complete only once for all categories of income.) (continued)
Part II—Interest Deductions, All Other Deductions, and Total Deductions
(a) Average Value of Assets—
Check Method Used:
Tax book value

(b) Interest Deductions

Alternative tax book value

(i) Nonfinancial
Corporations

(ii) Financial
Corporations

(iii) Nonfinancial
Corporations

(iv) Financial
Corporations

(c) All Other
Deductions
(attach schedule)
(see instructions)

(d) Totals
(add the amounts
from columns (b)(iii),
(b)(iv), and (c))
Additional note: With
respect to each
applicable statutory
grouping, enter the
amount in column (d)
of line 3a(2), 3b(2), 3c
(2), 3d(2), 3e(2),
or 3f(2) below in
column 14 of the
corresponding
Schedule A.

1a Totals (see instructions) . . . . . . . . . . . . .
b Amounts specifically allocable under Temporary Regulations
section 1.861-10T(e) . . . . . . . . . . . . . .
c Other specific allocations under Temporary Regulations section 1.861-10T
d Assets excluded from apportionment formula . . . . . .
2
Total to be apportioned (subtract the sum of lines 1b, 1c, and
1d from line 1a) . . . . . . . . . . . . . . . .
3
Apportionment among statutory groupings (see instructions):
a Enter code
(1) Section 245A dividend . . . . . . . . . . . .
(2) Other . . . . . . . . . . . . . . . . . .
(3) Total line a . . . . . . . . . . . . . . . .
b Enter code
(1) Section 245A dividend . . . . . . . . . . . .
(2) Other . . . . . . . . . . . . . . . . . .
(3) Total line b . . . . . . . . . . . . . . . .
c Enter code
(1) Section 245A dividend . . . . . . . . . . . .
(2) Other . . . . . . . . . . . . . . . . . .
(3) Total line c . . . . . . . . . . . . . . . .
d Enter code
(1) Section 245A dividend . . . . . . . . . . . .
(2) Other . . . . . . . . . . . . . . . . . .
(3) Total line d . . . . . . . . . . . . . . . .
e Enter code
(1) Section 245A dividend . . . . . . . . . . . .
(2) Other . . . . . . . . . . . . . . . . . .
(3) Total line e . . . . . . . . . . . . . . . .
f Enter code
(1) Section 245A dividend . . . . . . . . . . . .
(2) Other . . . . . . . . . . . . . . . . . .
(3) Total line f . . . . . . . . . . . . . . . .
4
Total foreign (add lines 3a(3), 3b(3), 3c(3), 3d(3), 3e(3), and 3f(3)) ▶

Section 904(b)(4) Adjustments
5
6

Expenses Allocated and Apportioned to Foreign Source Section 245A Dividend. Enter the sum of amounts in column (d) of lines 3a(1), 3b(1), 3c(1),
3d(1), 3e(1), and 3f(1). Include this line 5 result as a negative amount on Schedule B, Part II, line 8b . . . . . . . . . . . . . . . .
Enter expenses allocated and apportioned to U.S. source section 245A dividend. Include this line 6 amount as a negative amount on Schedule B,
Part II, line 8b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5
6
Form 1118 (Rev. 12-2021)