SCHEDULE I OMB No. 1545-0126 Interest Expense Allocation Under Regulations

(Form 1120-F) Section 1.882-5

© Attach to Form 1120-F. Department of the Treasury

Internal Revenue Service

Name of corporation Employer identification number

A Check here if the corporation is a foreign bank as defined in Temporary Regulations section 1.882-5T(c)(4) ©

8

U.S.-connected liabilities before Regs. sec. 1.884-1(e)(3) election(s). Multiply line 5, column (d) by line 6e

Total average amount of U.S. booked liabilities as defined

in Regs. sec. 1.882-5(d)(2) (see instructions)

© See separate instructions.

9 Total interest paid or accrued during the tax year on line 8 amount

e

2 Total assets per books 

3a Total interbranch assets 

b Total non-ECI assets under section 864(c)(4)(D) 

c Total other non-ECI assets 

a Average worldwide liabilities

b Average worldwide assets

c

Fixed ratio under Temp. Regs. sec. 1.882-5T(c)(4). If the corporation is a foreign bank as defined in

Temp. Regs. sec. 1.882-5T(c)(4), enter 95% on line 6d. If the corporation is not a foreign bank, enter 

50% on line 6d

d

7a

Specify the method used to determine the amounts in Step 2 (check one):

(a)

Set(s) of Books that

Give Rise to U.S.

Booked Liabilities

(see inst.)

(b)

Partnership

Interests

(c)

Set(s) of Books

Other than those

Described in

Columns (a) and (b)

(d)

Totals. Add

columns (a)

through (c)

Enter the ratio from line 6c or 6d, as applicable

Divide line 6a by line 6b

2007

%

%

B This Schedule I is being completed with respect to (check one):

Adjusted U.S. booked liabilities method under Regs. sec. 1.882-5(d). Complete lines 1 through 15 and 21 through 25.

Separate currency pools method under Regs. sec. 1.882-5(e). Complete lines 1 through 9 and 16a through 25.

Step 1 Average U.S. Assets for the Tax Year: Regulations Section 1.882-5(b)

Specify the method used to determine the value of the

corporation’s U.S. assets on lines 2 through 5 below (check 

one):

1

Adjusted basis method: Regs. sec. 1.882-5(b)(2)(i)

Fair market value method: Temp. Regs. sec. 1.882-5T(b)(2)(ii)

4 Combine lines 3a through 3f 

5 Total value of U.S. assets for the tax year 

Adjustments for amounts from partnerships and certain

disregarded entities included on line 2, column (a) 

d

Step 2 U.S.-Connected Liabilities for the Tax Year: Regulations Section 1.882-5(c)

Actual ratio under Regs. sec. 1.882-5(c)(2). Complete lines 6a through 6c below.

Fixed ratio under Temp. Regs. sec. 1.882-5T(c)(4). Complete line 6d below.

6

Step 3 Interest Expense Paid or Accrued on Average U.S. Booked Liabilities: Regulations Section 1.882-5(d)

(a)

Set(s) of Books that Give

Rise to U.S. Booked

Liabilities (see inst.)

(b)

Partnership

Interests

(c)

Totals.

Add columns

(a) and (b)

%

e Adjustments for assets that give rise to direct interest

expense allocations under Regs. sec. 1.882-5(a)(1)(ii) 

Column (b): Enter total from Schedule P, line 19.

Column (a): Subtract line 4 from line 2.

Column (c): See instructions for amount to enter.

Column (a): Do not include amounts that give rise to

directly allocable interest under Regs. sec. 1.882-5(a)(1)(ii)

or from partnerships includible in column (b).

Column (a): Do not include amounts that give rise to

directly allocable interest under Regs. sec. 1.882-5(a)(1)(ii)

or from partnerships includible in column (b).

Column (b): Enter the total from Schedule P, line 17.

Column (b): Enter the total from Schedule P, line 14c.

f Other adjustments to average assets included in line 2 (e.g., 

mark-to-market differences) 

b Total amount of U.S. liability reduction under Regs. sec. 1.884-1(e)(3) election(s)

c U.S.-Connected Liabilities. Subtract line 7b from line 7a ©
Schedule I (Form 1120-F) 2007

Excess U.S.-connected liabilities. Subtract line 8 from line 7c ©

10b

10c

10d

11

Check here if a less than 3% currency election was

made ©

b

17a Enter the percentage from line 6e

U.S.-connected liabilities. Multiply line 16a by line 17a, or, 

if a liability reduction election is made, see instructions

b

Enter the total interest expense paid or accrued for the tax

year with respect to the foreign corporation’s worldwide

liabilities denominated in that foreign currency (enter in

functional currency)

18a

Total interest paid or accrued during the tax year on U.S. dollar liabilities that are not 

U.S. booked liabilities included on line 8

a

b Average U.S. dollar denominated liabilities that are not U.S. booked liabilities included 

on line 8

c

d

11

(a)

U.S. Dollar

Denominated

(b)

Home Country

Currency. Specify:

(c)

Other Currency.

Specify:

(d)

Other Currency.

Specify:

Enter the 30-day LIBOR rate, if elected under Temp. Regs. sec. 1.882-5T(d)(5)(ii)(B)

Divide line 10a by line 10b

10a

%

%

Step 3 (cont.) Adjusted U.S. Booked Liabilities Method: Regulations Section 1.882-5(d)

c Borrowing rate: Divide line 18a by line 18b

Interest expense allocation by separate currency pool.

Multiply line 17b by line 18c

19

Enter the corporation’s average worldwide liabilities

(whether interest bearing or not) denominated in that foreign 

currency (enter in functional currency)

b

Step 3 (cont.) Separate Currency Pools Method: Regulations Section 1.882-5(e)

%

Schedule I (Form 1120-F) 2007 Page 2

If line 7c is greater than line 8, column (c), complete lines 10 through 13 below and skip lines 14a and 14b.

e Enter the rate from line 10c or, if elected, the 30-day LIBOR rate on line 10d 10e

12 Excess interest. Multiply line 10e by line 11 © 12

13 Add lines 9, column (c) and 12 13

b Multiply line 9, column (c) by line 14a. See instructions for hedging amounts 14b

14a Scaling ratio. Divide line 7c by line 8, column (c) 14a

Interest expense allocable to ECI under the adjusted U.S. booked liabilities method. Enter the result

from line 13 or line 14b here and on line 21 © 15

15

Combine lines 24a through 24c

22

23

24a

24d

21 Amount from line 15 or line 20, as applicable

22 Enter the corporation’s interest expense directly allocable under Temp.

Regs. sec. 1.882-5T(a)(1)(ii). (Include total from Schedule P, line 14b.)

23

24a

d

Amount of line 23 that is disallowed as a deduction under section 265 or

under an income tax treaty (attach schedule—see instructions)

Interest expense allocable to ECI under Regs. sec. 1.882-5. Add lines 21 and 22 ©

21

% % %

b Deferred interest expense under section 163(e)(3), 163(j), or 267(a)(3) (attach 

schedule—see instructions) 24b

SUMMARY—Interest Expense Allocation and Deduction under Regulations Section 1.882-5

Amount of line 23 that is capitalized under section 263A (attach

schedule—see instructions)

c 24c

Total interest expense deduction under Regs. sec. 1.882-5. Combine lines 23 and 24d and enter here and 

on Form 1120F, Section II, line 18. The amount entered on line 25 may not exceed the total interest expense 

paid or accrued by the foreign corporation © 25

25

U.S. assets. Enter the corporation’s U.S. assets, using the

methodology in Regs. sec. 1.882-5(e)(1)(i). If more columns

are needed, attach schedule (see instructions)

16a

Interest expense allocable to ECI under the separate currency pools method. Total the amounts on line 19, columns 

(a) through (d), and amounts from attached schedule, if any, and enter the result here and on line 21

20

%

% % % %

If the corporation is a foreign bank which is making a current-year election to use the published average 

30-day LIBOR (see instructions), check the box on this line, skip lines 10a through 10c, and enter the rate 

on line 10d ©

10

%

© © ©

( )

( )

If line 7c is less than or equal to line 8, column (c), skip lines 10 through 13 and complete lines 14a and 14b.