Instructions for

Form 1120-ND

(Rev. November 2022)

(Use with the October 2013 revision of Form 1120-ND)

Return for Nuclear Decommissioning Funds and Certain Related Persons

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code 

unless otherwise noted.

Future Developments

For the latest information about 

developments affecting Form 1120-ND and 

its instructions, such as legislation enacted 

after they were published, go to IRS.gov/

Form1120ND.

What’s New

Form 1120-ND. Form 1120-ND is not being 

revised. Continue to use the October 2013 

revision of the Form 1120-ND with these 

updated instructions.

Increase in penalty for failure to file. For 

returns required to be filed after December 

31, 2022, the minimum penalty for failure to 

file a return that is over 60 days late has 

increased to the smaller of the tax due or 

$450. See Late filing of return, later.

Form 1120-W now historical. Form 

1120-W, Estimated Tax for Corporations, 

and the Instructions for Form 1120-W are 

now historical. The 2022 Form 1120-W 

(released in 2021) and the 2022 Instructions 

for Form 1120-W (released in 2021) will be 

the last revision of both the form and its 

instructions. Prior versions will be available 

on IRS.gov.

General Instructions

Purpose of Form

Nuclear decommissioning funds use Form 

1120-ND to report contributions received, 

income earned, the administrative expenses 

of operating the fund, and the tax on 

modified gross income. The return is also 

used to report the section 4951 initial taxes 

on self-dealing.

Taxpayers, electing under section 468A, 

are allowed deductions for amounts 

contributed to a qualified fund, up to 100% of 

the present value of the nuclear power 

plant's decommissioning costs. Taxpayers 

can apply for a new ruling amount if the 

nuclear power plant is granted a license 

renewal, extending its useful life. See section 

468A for more information.

Who Must File

All section 468A nuclear decommissioning 

funds must file Form 1120-ND. A disqualified 

person engaging in self-dealing must file 

Form 1120-ND to report the initial tax. See 

Part II, Initial Taxes on Self-Dealing (Section 

4951), later, to determine if an individual has 

engaged in self-dealing as a trustee or 

disqualified person.

Note. Each person liable for filing a return to 

pay any tax reportable on this form must file 

a separate return.

When To File

Generally, a fund must file its income tax 

return by the 15th day of the 4th month after 

the end of its tax year. The return of a trustee 

or self-dealer who owes tax under section 

4951 must be filed by the 15th day of the 4th 

month after the end of the tax year of the 

trustee or self-dealer.

However, a fund with a fiscal tax year 

ending on June 30 must file by the 15th day 

of the 3rd month after the end of its tax year. 

A fund with a short tax year ending in June 

will be treated as if the short year ended on 

June 30, and must file by the 15th day of the 

3rd month after the end of its tax year.

If the due date falls on a Saturday, 

Sunday, or legal holiday, the fund may file on 

the next business day.

Where To File

File the fund's or disqualified person's or 

trustee's return at the applicable IRS address 

listed below.

If the fund's principal business, office, or 

agency is located in the United States, file 

Form 1120-ND at the following address:

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0012

If the fund's principal business, office, or 

agency is located in a foreign country or a 

U.S. possession, file Form 1120-ND at the 

following address:

Internal Revenue Service Center

P.O. Box 409101

Ogden, UT 84409

Private delivery services (PDSs). Funds 

can use certain PDSs designated by the IRS 

to meet the “timely mailing as timely filing/

paying” rule for tax returns and payments. 

See the Instructions for Form 1120, U.S. 

Corporation Income Tax Return, for details.

PDSs cannot deliver items to P.O. 

boxes. The fund must use the U.S. 

Postal Service to mail any item to an 

IRS P.O. box address.

Extension of time to file. File Form 7004, 

Application for Automatic Extension of Time 

To File Certain Business Income Tax, 

Information, and Other Returns, to request 

an extension of time to file. Generally, file 

Form 7004 by the regular due date of the 

return.

A disqualified person or trustee filing to 

report section 4951 taxes must also file Form 

7004 to request an extension of time to file.

Who Must Sign

The return must be signed and dated by an 

authorized trustee. The return of any person 

who engaged in any act of self-dealing must 

be signed and dated by that person or the 

individual authorized to sign on behalf of that 

person.

If an employee of the fund completes 

Form 1120-ND, the paid preparer space 

should remain blank. Anyone who prepares 

Form 1120-ND but does not charge the fund 

should not complete that section. Generally, 

anyone who is paid to prepare the return 

must sign it and fill in the “Paid Preparer Use 

Only” area.

The paid preparer must complete the 

required preparer information and:

• Sign the return in the space provided for 

the preparer's signature, and

• Give a copy of the return to the taxpayer.

Note. A paid preparer may sign original or 

amended returns by rubber stamp, 

mechanical device, or computer software 

program.

Paid Preparer Authorization

If the fund wants to allow the IRS to discuss 

its tax return with the paid preparer who 

signed it, check the “Yes” box in the 

signature area of the return. This 

authorization applies only to the individual 

whose signature appears in the “Paid 

Preparer Use Only” section of the fund's 

return. It does not apply to the firm, if any, 

shown in that section.

If the “Yes” box is checked, the fund is 

authorizing the IRS to call the paid preparer 

to answer any questions that may arise 

during the processing of its return. The fund 

is also authorizing the paid preparer to:

• Give the IRS any information that is 

missing from the return;

CAUTION

!

Dec 1, 2022 Cat. No. 11508V
• Call the IRS for information about the 

processing of the return or the status of any 

related refund or payment(s); and

• Respond to certain IRS notices about 

math errors, offsets, and return preparation.

The fund is not authorizing the paid 

preparer to receive any refund check, bind 

the fund to anything (including any additional 

tax liability), or otherwise represent the fund 

before the IRS.

The authorization will automatically end 

no later than the due date (excluding 

extensions) for filing the fund's subsequent 

tax return. If the fund wants to expand the 

paid preparer's authorization or revoke 

authorization before it ends, see Pub. 947, 

Practice Before the IRS and Power of 

Attorney.

Assembling the Return

To ensure that the fund's tax return is 

correctly processed, attach all schedules 

after page 2, Form 1120-ND, in alphabetical 

order followed by other forms in numerical 

order.

Complete every applicable entry space 

on Form 1120-ND. Do not write “See 

Attached” instead of completing the entry 

spaces. If more space is needed on the 

forms or schedules, attach separate sheets 

using the same size and format as the 

printed forms. If there are supporting 

statements and attachments, arrange them 

in the same order as the schedules or forms 

they support and attach them last. Show the 

totals on the printed forms. Enter the fund's 

name and employer identification number 

(EIN) on each supporting statement or 

attachment.

Tax Payments

The fund must pay the tax due in full no later 

than the due date for filing its tax return (not 

including extensions).

Electronic Deposit 

Requirement

Nuclear decommissioning funds must use 

electronic funds transfers to make all federal 

tax deposits (such as deposits of 

employment, excise, and corporate income 

tax). Generally, electronic funds transfers are 

made using the Electronic Federal Tax 

Payment System (EFTPS). However, if the 

fund does not want to use EFTPS, it can 

arrange for its tax professional, financial 

institution, payroll service, or other trusted 

third party to make deposits on its behalf. 

Also, it may arrange for its financial institution 

to submit a same-day wire payment 

(discussed below) on its behalf. EFTPS is a 

free service provided by the Department of 

the Treasury. Services provided by a tax 

professional, financial institution, payroll 

service, or other third party may have a fee.

To get more information about EFTPS or 

to enroll in EFTPS, go to EFTPS.gov or call 

800-555-4477. To contact EFTPS using 

Telecommunications Relay Services (TRS) 

for people who are deaf, hard of hearing, or 

have a speech disability, dial 711 and then 

provide the TRS assistant the 800-555-4477 

number above or 800-733-4829. Additional 

information about EFTPS is also available in 

Pub. 966.

Depositing on time. For any deposit made 

by EFTPS to be on time, the fund must 

submit the deposit by 8 p.m. Eastern time the 

day before the date the deposit is due. If the 

fund uses a third party to make deposits on 

its behalf, they may have different cutoff 

times.

Same-day wire payment option. If the 

fund fails to submit a deposit transaction on 

EFTPS by 8 p.m. Eastern time the day 

before the date a deposit is due, it can still 

make its deposit on time by using the 

Federal Tax Collection Service (FTCS).To 

use the same-day wire payment method, the 

fund will need to make arrangements with its 

financial institution ahead of time regarding 

availability, deadlines, and costs. Financial 

institutions may charge a fee for payments 

made this way. To learn more about the 

information the fund will need to provide to 

its financial institution to make a same-day 

wire payment, go to the IRS website at 

IRS.gov/SameDayWire.

Estimated Tax Payments

Generally, the following rules apply to the 

fund's payments of estimated tax.

• The fund must make installment 

payments of estimated tax if it expects its 

total tax for the year (less applicable credits) 

to be $500 or more.

• The installments are due by the 15th day 

of the 4th, 6th, 9th, and 12th months of the 

tax year. If any date falls on a Saturday, 

Sunday, or legal holiday, the installment is 

due on the next regular business day.

• The fund must use electronic funds 

transfers to make installment payments of 

estimated tax.

• Figure the fund's expected modified gross 

income for the tax year. Then multiply the 

fund's expected modified gross income by 

20%.

• If, after the fund figures and deposits 

estimated tax, it finds that its tax liability for 

the year will be more or less than originally 

estimated, it may have to refigure its required 

installments. If earlier installments were 

underpaid, the fund may owe a penalty. See 

the instructions for line 15.

• If the fund overpaid estimated tax, it may 

be able to get a quick refund by filing Form 

4466, Corporation Application for Quick 

Refund of Overpayment of Estimated Tax.

See section 6655 for more information on 

how to figure estimated taxes.

Interest and Penalties

Interest. Interest is charged on taxes paid 

late even if an extension of time to file is 

granted. Interest is also charged on penalties 

imposed for failure to file, negligence, fraud, 

substantial valuation misstatements, 

substantial understatements of tax, and 

reportable transaction understatements from 

the due date (including extensions) to the 

date of payment. The interest charge is 

figured at a rate determined under section 

6621.

Late filing of return. A fund that doesn’t file 

its tax return by the due date, including 

extensions, may be penalized 5% of the 

unpaid tax for each month or part of a month 

the return is late, up to a maximum of 25% of 

the unpaid tax. The minimum penalty for a 

return that is over 60 days late is the smaller 

of the tax due or $450. The penalty won’t be 

imposed if the fund can show that the failure 

to file on time was due to reasonable cause.

Late payment of tax. A fund that doesn’t 

pay the tax when due may generally be 

penalized 1/2 of 1% of the unpaid tax for each 

month or part of a month the tax is not paid, 

up to a maximum of 25% of the unpaid tax. 

The penalty won’t be imposed if the fund can 

show that the failure to pay on time was due 

to reasonable cause.

Reasonable-cause determinations. If the 

fund receives a notice about penalties after it 

files its return, send the IRS an explanation, 

and we will determine if the fund meets the 

reasonable-cause criteria. Do not attach an 

explanation when the fund files its return.

Other penalties. Other penalties can be 

imposed for negligence, substantial 

understatement of tax, reportable transaction 

understatements, and fraud. See sections 

6662, 6662A, and 6663.

Accounting Method

The fund must use the same method of 

accounting as the electing taxpayer.

Rounding Off to Whole Dollars

The fund may round off cents to whole 

dollars on its return and schedules. If the 

fund does round to whole dollars, it must 

round all amounts. To round, drop amounts 

under 50 cents and increase amounts from 

50 to 99 cents to the next dollar. For 

example, $1.39 becomes $1 and $2.50 

becomes $3.

If two or more amounts must be added to 

figure the amount to enter on a line, include 

cents when adding the amounts and round 

off only the total.

Recordkeeping

Keep the fund's records for as long as they 

may be needed for the administration of any 

provision of the Internal Revenue Code. 

Usually, records that support an item of 

income, deduction, or credit on the return 

must be kept for 3 years from the date the 

return is due or filed, whichever is later. Keep 

records that verify the fund's basis in 

property for as long as they are needed to 

figure the basis of the original or replacement 

property.

The fund should keep copies of all filed 

returns. They help in preparing future and 

amended returns.

Additional Information

See the Instructions for Form 1120 and Pub. 

542, Corporations, for more information 

about corporations, including additional 

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forms the fund may need to file and how to 

get forms and publications.

Specific Instructions

Period Covered

Enter the tax year in the space provided at 

the top of the form. For a calendar year, 

enter the last two digits of the calendar year 

in the first entry space. For a fiscal tax year 

return, fill in the tax year space at the top of 

the form.

Name and Address

Enter the fund's true name (as set forth in the 

charter or other legal document creating it), 

address, and EIN on the appropriate lines. 

Enter the address of the fund's principal 

office or place of business. Include the suite, 

room, or other unit number after the street 

address. If the post office does not deliver 

mail to the street address and the fund has a 

P.O. box, show the box number instead.

Note. Do not use the address of the 

registered agent for the state in which the 

fund is incorporated. For example, if a fund is 

incorporated in Delaware or Nevada and the 

fund's principal office is located in Little 

Rock, AR, the fund should enter the Little 

Rock address.

If the return is filed by a trustee or 

disqualified person to report section 4951 

taxes, enter that person's name and address 

in the address section.

If the fund receives its mail in care of a 

third party (such as an accountant or an 

attorney), enter on the street address line 

“C/O” followed by the third party's name and 

street address or P.O. box.

If the corporation has a foreign address, 

include the city or town, state or province, 

country, and foreign postal code. Do not 

abbreviate the country name. Follow the 

country's practice for entering the name of 

the state or province and postal code.

Item A. Employer Identification 

Number (EIN)

Enter the fund's EIN. If the fund does not 

have an EIN, it must apply for one. An EIN 

can be applied for in the following ways.

• Online—Go to IRS.gov/EIN. The EIN is 

issued immediately once the application 

information is validated.

• By mailing or faxing Form SS-4, 

Application for Employer Identification 

Number.

If the fund has not received its EIN by the 

time the return is due, write “Applied for” and 

the date the fund applied in the space for the 

EIN. For more details, see the Instructions 

for Form SS-4.

Item B. Identifying Number of 

Trustee or Disqualified Person

If the return is filed by a trustee or 

disqualified person to report section 4951 

taxes, enter the identifying number of the 

trustee or disqualified person. For an 

individual trustee or disqualified person, 

enter the individual's social security number. 

If the trustee or disqualified person is not an 

individual, enter the EIN.

Note. Do not complete item B if Form 

1120-ND is filed to report the income, 

deductions, and income tax liability of the 

fund.

Item C. Fund, Trustee, or 

Disqualified Person

Check only the box that applies.

1. When filed to report the income, 

deductions, and income tax liability of the 

fund, check the “Fund” box.

2. When filed by a trustee who is liable 

for taxes under section 4951, check the 

“Trustee” box.

3. When filed by a disqualified person 

who is liable for section 4951 tax, check the 

“Disqualified person” box.

Item D. Final Return, Name 

Change, Address Change, or 

Amended Return

Indicate a final return, name change, 

address change, or amended return by 

checking the appropriate box. If you are a 

trustee or disqualified person reporting 

section 4951 taxes, omit item D.

Note. If a change in address occurs after 

the return is filed, use Form 8822-B, Change 

of Address or Responsible Party—Business, 

to notify the IRS of the new address. See the 

instructions for Form 8822-B for details.

Part I. Computation of Fund 

Income Tax

Income

Line 1. Taxable interest. Enter the total 

taxable interest income received or accrued 

for the year, including any original issue 

discount. Do not include tax-exempt interest 

on line 1; but report it as an item of 

information on Schedule M, line 2d.

Line 2. Capital gain net income. Every 

sale, exchange, or actual or deemed 

distribution of assets held by the fund must 

be reported in detail on Schedule D (Form 

1120), Capital Gains and Losses (and Form 

8949, Sales and Other Dispositions of 

Capital Assets, if applicable), even if there is 

no gain or loss. The amount realized on an 

actual or deemed distribution is the fair 

market value of the assets as of the date of 

distribution.

Line 3. Other income. Enter any other 

taxable income not reported on line 1 or 

line 2 and explain its nature on an attached 

schedule. If the fund had only one item of 

other income, describe it in parentheses on 

line 3.

Deductions

Note. A deduction is not allowed for certain 

expenses allocable to tax-exempt income. 

See section 265. In addition, a deduction is 

not allowed for distributions made to electing 

taxpayers. Report such payments as an item 

of information on Schedule M, line 2c. 

Liabilities are not treated as incurred prior to 

the time economic performance takes place. 

See section 461(h).

Line 5. Trustee fees. Enter the total 

deductible fees paid or incurred to the 

trustee(s) for administering the fund during 

the tax year.

Line 6. Taxes. Enter deductible taxes paid 

or incurred during the tax year, including 

state and local income taxes. Do not deduct 

federal income taxes or taxes not imposed 

on the fund.

Line 8. Other deductions. Attach a 

schedule listing by type and amount all 

allowable deductions that are not deducted 

elsewhere on Form 1120-ND. Include 

investment advisory fees, actuarial 

expenses, and other administrative 

expenses paid or incurred during the tax 

year, but do not include decommissioning 

costs.

Line 11. Net operating loss deduction. 

Enter the amount of any net operating loss 

deduction allowed by Regulations section 

1.468A-4(b)(4), and explain its computation 

on an attached schedule.

Note. The 2-year carryback rule does not 

apply to net operating losses arising in tax 

years ending after 2017. An exception 

applies to farmers and non-life insurance 

companies. See section 172(b), as amended 

by P.L. 115-97, section 13302.

Line 14. Payments. Generally, no 

payments are allowed other than those on 

lines 14a through 14d and the credit for 

backup withholding.

Backup withholding. If the fund had 

federal income tax withheld from any 

payments it received because, for example, 

it failed to give the payer its correct EIN, 

include the amount withheld in the total for 

line 14f. Write the amount withheld and the 

words “Backup Withholding” in the blank 

space above line 14f.

Line 15. Estimated tax penalty. A fund 

that does not make estimated tax payments 

when due may be subject to an 

underpayment penalty for the period of 

underpayment. Use Form 2220, 

Underpayment of Estimated Tax by 

Corporations, to see if the fund owes a 

penalty and to figure the amount of the 

penalty. If Form 2220 is attached, check the 

box on line 15 and enter the amount of the 

penalty on that line.

Schedule L. Balance Sheets

The balance sheets should agree with the 

fund's books and records.

Schedule M. Other Information

Line 1. The term “electing taxpayer” means 

an eligible taxpayer that elects the 

application of section 468A to deduct 

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payments made to a nuclear 

decommissioning fund. See Regulations 

section 1.468A-7 for the rules concerning the 

election.

Line 5. If you are a trustee or disqualified 

person (defined later), complete the items 

included in line 5 to determine if you have 

engaged in an act of self-dealing.

Part II. Initial Taxes on 

Self-Dealing (Section 4951)

Initial Taxes on Self-Dealers

An initial tax of 10% of the amount involved 

(defined later) is imposed on each act of 

self-dealing between a disqualified person 

and a nuclear decommissioning fund for 

each tax year (or part of a tax year) in the 

taxable period. The tax is required to be paid 

by any disqualified person (other than a 

trustee acting only as a trustee of the trust) 

who participates in the act of self-dealing.

Initial Taxes on Trustee

A tax of 21/2% of the amount involved is 

imposed on a trustee who participates in the 

act of self-dealing. The tax is not imposed if 

the trustee unwillingly or due to reasonable 

cause participated in the act. The tax is 

computed on all acts of self-dealing that 

occur within the taxable period. The tax is 

required to be paid by the trustee who 

participates in the act.

Exceptions. The initial tax on the act of 

self-dealing of a disqualified person or a 

trustee is not imposed if the acts of 

self-dealing are corrected within the taxable 

period.

Definitions

Self-dealing. When determining if an act is 

an act of self-dealing, treat the transfer of 

personal property by a disqualified person to 

the fund as a sale or exchange if the property 

is subject to a mortgage or similar lien. 

Otherwise, the term “self-dealing” means any 

direct or indirect:

• Sale, exchange, or leasing of real or 

personal property between the fund and a 

disqualified person;

• Lending of money or other extensions of 

credit between the fund and a disqualified 

person;

• Furnishing of goods, services, or facilities 

between the fund and a disqualified person;

• Payment of compensation (or payment or 

reimbursement of expenses) by the fund to a 

disqualified person; and

• Transfers to, or use by or for the benefit 

of, a disqualified person of the income or 

assets of the fund.

Exceptions. Acts of self-dealing do not 

include the following.

1. The payment by the fund for the 

purposes of satisfying, in whole or in part, the 

liability of the electing taxpayer for 

decommissioning costs of the nuclear power 

plant.

2. The withdrawal of excess 

contributions by the electing taxpayer in 

accordance with Regulations section 

1.468A-5(c)(2).

3. The withdrawal of amounts that have 

been treated as distributions to the electing 

taxpayer under Regulations section 

1.468A-5(c)(3).

4. The payment of amounts remaining in 

the fund to the electing taxpayer after the 

termination of the fund upon the substantial 

completion of decommissioning.

5. The furnishing of goods, services, or 

facilities by a disqualified person to the fund 

if the furnishing is without charge and if the 

goods, services, or facilities so furnished are 

exclusively used for the purposes specified 

in section 468A(e)(4).

6. The payment of compensation (and 

the payment or reimbursement of expenses) 

by the fund to a disqualified person for 

personal services that are reasonable and 

necessary to carry out the purposes of the 

fund and the compensation (or payment or 

reimbursement of expenses) is not 

excessive.

7. A payment by the fund for the 

performance of trust functions and certain 

general banking services by a bank or trust 

company that is a disqualified person, if the 

banking services are reasonable and 

necessary to carry out the purposes of the 

fund and the compensation paid to the bank 

or trust company is not excessive 

(considering the fair market interest rate for 

the use of the funds by the bank or trust 

company).

The allowable general banking services 

are:

• Checking accounts, as long as the bank 

does not charge interest on any 

overwithdrawals;

• Savings accounts, as long as the fund 

may withdraw its money after giving no more 

than 30 days notice, without losing interest 

for the period the money was on deposit; and

• Safekeeping activities (for example, rental 

of a safe deposit box).

Taxable period. For an act of self-dealing, 

the term “taxable period” means the period 

beginning on the date of the act of 

self-dealing and ending on the date of the 

earliest of:

• The date of mailing of a notice of 

deficiency under section 6212 for the section 

4951 tax,

• The date on which the tax imposed by 

section 4951 is assessed, or

• The date correction of the act of 

self-dealing is completed.

Amount involved. The term “amount 

involved” means the greater of the amount of 

money given (or received) and the fair 

market value of the other property given (or 

received). When services described in 

section 4951(d)(2)(C) are involved, the 

amount involved is only the excess 

compensation.

Note. Fair market value is determined as of 

the date on which the act of self-dealing 

occurs and at the highest market value 

during the taxable period.

Correction and correct. The terms 

“correction” and “correct” mean the undoing 

of an act of self-dealing, to the extent 

possible, but in any case returning the fund 

to a financial position no worse than it would 

have been if the disqualified person acted 

under the highest fiduciary relationship.

Disqualified person. The term “disqualified 

person” means a person who is:

1. A contributor to the fund.

2. A trustee of the fund.

3. An owner of more than 10% of (a) the 

total combined voting power of a 

corporation, (b) the profits interest of a 

partnership, or (c) the beneficial interest of a 

trust or unincorporated business that is a 

contributor to the fund.

4. An officer, director, or employee of a 

person who is a contributor to the fund.

5. The spouse, ancestor, or a lineal 

descendant, or a spouse of a lineal 

descendant of an individual described in (1) 

through (4) above.

6. A corporation of which persons 

described in (1) through (5) above own more 

than 35% of the total combined voting 

power.

7. A partnership of which persons 

described in (1) through (5) above own more 

than 35% of the profits interests.

8. A trust or estate of which persons 

described in (1) through (5) above own more 

than 35% of the beneficial interest.

For purposes of (3a) and (6) above, 

indirect stockholders would be taken into 

account under section 267(c), except that, 

for purposes of this paragraph, section 

267(c)(4) will be treated as providing that the 

members of the family of an individual are 

only those individuals described in (5) 

above. For purposes of (3a), (3c), (7), and 

(8) above, the ownership of profits or 

beneficial interests will be determined by the 

rules of constructive ownership of stock 

provided in section 267(c) (other than 

paragraph (3) thereof), except that section 

267(c)(4) will be treated as providing that the 

members of the family of an individual are 

only those individuals described in (5) 

above.

Dispositions of an Interest in a 

Nuclear Power Plant

There are federal income tax consequences 

when there is a transfer of assets of a 

nuclear decommissioning fund in connection 

with the sale, exchange, or other disposition 

of a transferor of all or a portion of its 

qualifying interest in a nuclear power plant to 

another taxpayer (transferee). If the 

requirements of Regulations section 

1.468A-6(b) are met, the federal income tax 

consequences are the following.

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1. No gain or loss. If there is a 

disposition of an interest (wholly or partially) 

in a nuclear power plant, neither the 

transferor or the transferee (or either's fund) 

will recognize gain, loss, or otherwise take 

any income or deduction into account 

because of the transfer of all or some of the 

assets of the transferor's fund. Also, the 

transfer is not considered a payment or 

contribution of assets by the transferor's fund 

(or by the transferee to its fund).

2. Basis. Transfers of assets of a fund 

to which Regulations section 1.468A-6 

applies do not affect basis. The transferee's 

fund will have a basis in the assets received 

from the transferor equal to the transferor's 

basis in those assets immediately prior to the 

transfer.

3. Tax year of disposition.

A. Transferee. If a transferee does not file 

a request for a schedule of ruling amounts by 

the deemed payment deadline (21/2 months 

after the end of the tax year of the 

disposition), the transferee's ruling amount 

for the interest acquired is determined by 

taking the amount contained in the 

transferor's current schedule of ruling 

amounts for that tax year and that plant 

multiplied by the product of:

(1) The portion of the transferor's 

qualifying interest that is transferred; and

(2) A fraction, the numerator of which is 

the number of days in the tax year of the 

transferor including and following the date of 

the disposition, and the denominator of 

which is the number of days in that tax year.

B. Transferor. If a transferor does not file 

a request for a revised schedule of ruling 

amounts on or before the deemed payment 

deadline for the tax year of the transferor in 

which the disposition of its interest in the 

nuclear power plant occurred (that is, the 

date that is 21/2 months after the close of that 

tax year), the transferor's ruling amount with 

respect to that plant for that year will equal 

the sum of:

(1) The ruling amount contained in the 

transferor's current schedule of ruling 

amounts with respect to that plant for that tax 

year multiplied by the portion of qualifying 

interest that is retained, if any; and

(2) The ruling amount contained in the 

transferor's current schedule of ruling 

amounts with respect to that plant for that tax 

year multiplied by the product of:

(a) The portion of the transferor's 

qualifying interest that is disposed of; and

(b) A fraction, the numerator of which is 

the number of days in the tax year that 

precede the date of the disposition, and the 

denominator of which is the number of days 

in that tax year.

4. Tax year after the year of 

disposition. A transferee of, or a transferor 

who retains, a qualifying interest in a nuclear 

power plant must file a request for a revised 

schedule of ruling amounts for the interest by 

the deemed payment deadline (defined 

above). If the transferee (or the transferor) 

does not timely file such a request, the 

transferee's (or the transferor's) ruling 

amounts for the interest for that tax year will 

be zero.

For more information, see Regulations 

section 1.468A-6.

Privacy Act and Paperwork Reduction 

Act Notice. We ask for the information on 

this form to carry out the Internal Revenue 

laws of the United States. You are required 

to give us the information. We need it to 

ensure that you are complying with these 

laws and to allow us to figure and collect the 

right amount of tax.

Section 4951 of the Internal Revenue 

Code requires disqualified taxpayers 

engaged in self-dealing with a trust to pay 

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The time needed to complete and file this 

form will vary depending on individual 

circumstances. The estimated burden for 

business taxpayers filing this form is 

approved under OMB control number 

1545-0123 and is included in the estimates 

shown in the instructions for their business 

income tax return. The estimated burden for 

all other taxpayers who file this form is 

shown below.

Recordkeeping .......... 23 hr., 26 min.

Learning about the law or the 

form ................. 3 hr., 7 min.

Preparing the form ........ 5 hr., 30 min.

Copying, assembling, and 

sending the form to the IRS ... 32 min.

If you have comments concerning the 

accuracy of these time estimates or 

suggestions for making this form simpler, we 

would be happy to hear from you. You can 

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FormComments. Or you can write to the 

Internal Revenue Service, Tax Forms and 

Publications Division, 1111 Constitution Ave. 

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not send the tax form to this address. 

Instead, see Where To File, earlier.

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