Detach pages 5 and 6 before suing

Page 5

SPECIFIC INSTRUCTIONS
The following instructions are numbered to correspond with line numbers on page 1 of this schedule

1. Taxable income before net operating loss deduction and
special deductions, Form 1120.—Enter here the amount shown on
line 28, page 1, Form 1120, computed in accordance with the pro-
visions of subtitle A, but without regard to section 443(b) (relating
to income placed on an annual basis). In the event such taxable in-
come on line 1 includes any amount with respect to coal or domestic
iron ore royalties, see section 631(c) and the regulations thereunder.

‘In the case of a nonresident foreign corporation (not engaged in
trade or business within the United States) which qualifies as a
personal holding company under section 542 but not as a foreign
personal holding company under section 552, the amount to be entered
on line 1 must computed under section 861 rather than under
section 881(a)

3. Expenses and depreciation applicable to property of the
taxpayer in excess of amount allowable under section 545(b)
(8).—If the corporation derived rent or other compensation for the
use of, or right to use, property which was less than the sum of the
expenses incurred in connection therewith (and deductible under
section 162) and the depreciation allowable under section 167, Sched-
ule A should be filled in and the excess of the expenses and deprecia-
tion over the rent or other compensation shown therein should be
entered on line 3, page 1. This adjustment must be made unless
the taxpayer establishes, in accordance with section $45(b) (8), that
the rent or other compensation received was the highest obtainable,
or, if none was received, that none was obtainable; that the property
was held in the course of a business carried on bona fide for profit;
and either that there was reasonable expectation that the operation
of the property would result in a profit, or that the property was
necessary to the conduct of the business.

‘The burden of proof will rest upon the taxpayer to sustain the
deduction of the aggregate of the expenses and depreciation allowed
in excess of the rent or other compensation derived from the prop-
erty. A corporation claiming such excess deductions shall, in lieu
of filling in Schedule A, attach to the return a statement setting forth
its claim for allowance of the deductions together with a complete
statement of facts, circumstances, and arguments on which it relies
in support of the deductions. Such statement shall show:

(a) A description of the property;

(4) The cost or other basis to the corporation and the nature and
value of the consideration paid for the property;

(c) The name and address of the person From whom the property
was acquired and the date thereof;

(d) The name and address of the person to whom the property
was leased or rented, or the person permitted to use the property,
and the number of shares of stock, if any, held by such person and
the members of his family;

(e) The nature (cash, securities, services, etc.) and gross amount
of the rent or other compensation received or accrued for the use of, or
the right to use, the property during the taxable year and for each of
the 5 preceding years and the amount of the expenses incurred with re-
spect to, and the depreciation sustained on, the property for such years;

(f) Evidence that the rent or other compensation was the highest
obtainable and if none was received or accrued, a statement of the
reasons therefor;

(g) A copy of the contract, lease, or rental agreement;

(h) ‘The purpose for which the property was used;

(i) The business carried on by the corporation with respect to
which the property was held and the gross income, expenses, and net
income derived from the conduct of such business for the taxable
year and for each of the 5 preceding years;

(j) A statement of any reasons which existed for expectation that
the operation of the property would be profitable, or a statement of
the necessity for the use of the property in the business of the
corporation, and the reasons why the property was acquired; and

(&) Any other information on which the corporation relies.

4. Amount added to taxable income where lien in favor of
the United States is satisfied or released.—The sum of the
amounts deducted from taxable income under section 545(b)(9)
with respect to any lien in favor of the United States must be added
to taxable income, in computing undistributed personal holding
company income, in the taxable year in which the lien is satisfied
or released. Similarly, in the case of a partial satisfaction or release
of such lien, to the extent satisfied or released. Where an amount
is so added to taxable income, the shareholders of the corporation
may, pursuant to regulations prescribed by the Secretary or his dele-
‘gate, elect to compute the income tax with respect to such dividends
as are attributable to such amount as though they were received
ratably over the period the lien was in effect. See Instruction 14.

7. Federal and foreign income, war profits, and excess
profits taxes.—Attach a schedule showing the nature of the tax,

the taxable year, and the amount. Section 545(b) (1) provides that
there shall be allowed as a deduction from taxable income Federal
income and excess profits taxes accrued during the taxable year or
deemed to be paid by a domestic corporation under section 902(a)
(1) or 960(a)(1)(C) for the taxable year, but not including the
accumulated earnings tax imposed by section 531, the personal hold-
ing company tax imposed by section 541, or the taxes imposed by
corresponding sections of a prior income tax law. However, a tax-
payer shall deduct Federal income and excess profits taxes under this
paragraph when paid if for each taxable year in which it was subject
to tax imposed by section 500 of the Internal Revenue Code of 1939
it deducted such taxes when paid, unless it elects, in its return for a
taxable year ending after June 30, 1954, to deduct the taxes described
in this paragraph when accrued, in which case only taxes accrued
may be deducted. Such an election shall be irrevocable and shall
apply to the taxable year for which the election is made and all
subsequent taxable years.

The credit allowed to domestic corporations by section 901 for
income, war profits, and excess profits taxes of foreign countries and
United States possessions is not allowed as a credit with respect to
the personal holding company tax. There shall be allowed as a de-
duction from taxable income, however, the income, war profits, and
excess profits taxes accrued during the taxable year to foreign coun-
tries and possessions of the United States if the taxpayer claims a
credit for such taxes in computing its income tax.

Foreign corporations should treat such taxes as deductions to be
allocated in accordance with section 861 in computing income from
sources within the United States, and in such cases taxes of this na-
ture will be reflected in taxable income stated on line 1 instead of
being stated separately as a deduction on line 7.

8. Contributions deductible under section 545(b)(2).—For
purposes of the personal holding company tax, section 545(b) (2)
provides a different limitation on deductions for charitable contribu-
tions than the 5-percent limitation for purposes of determining the
corporate tax. The limitations on charitable deductions of individ-
uals are applicable but are to be applied to the amount of taxable in-
come to which the 5-percent limitation applied. (See Instruction 19,
Form 1120.) However, taxable income shall be computed without
the deduction of the amount disallowed under section 545(b) (8)
(relating to expenses and depreciation applicable to property of the
taxpayer).

For purposes of the personal holding company tax, the contribu-
tion carryover under the provisions of sections 170(b)(2) and 170
(b) (5) is not allowed (section 545(b) (2))

9. Net operating loss for the preceding year deductible
under section 545(b)(4).—Section 545(b)(4) provides that in
lieu of the net operating loss deduction provided in section 172 there
shall be allowed the amount of the net operating loss (as defined in
section 172(c)) for the preceding taxable year computed without
the deductions provided in Part VIII (except organizational expenses,
section 248) of subchapter B.

12. Amounts used or irrevocably set aside to pay or retire
indebtedness of any kind incurred prior to January 1, 1934.—
Section 545(b)(7) provides that in determining undistributed per-
sonal holding company income there shall be allowed as a deduction
amounts used or irrevocably set aside to pay or retire indebtedness
of any kind incurred before January 1, 1934, if such amounts are
reasonable with reference to the size and terms of such indebtedness.

There must be furnished all of the facts and circumstances upon
which the taxpayer relies to establish the reasonableness of the amount
claimed as a deduction.

Describe fully in an attached statement, a description of the in-
debtedness, the date incurred or assumed, the date due, the plan for
payment or retirement of the obligations (indicating date and method
of adoption), and, where the plan is covered by a mandatory sinking
fund agreement or similar arrangement, submit a copy of the inden-
ture or agreement by which the fund was established and under
which it is maintained, Such statement shall also include (1) The
amount of indebtedness on January 1, 1934; (2) Aggregate of
amounts used or irrevocably set aside to pay or retire such indebted-
ness in prior taxable years beginning on and after January 1, 1934;
(3) Amount actually used during the taxable year to pay or retire
the indebtedness; and (4) Amount irrevocably set aside during the
taxable year to pay or retire the indebtedness but not actually used
during the taxable year for such purpose. In addition, the statement
shall indicate whether the deduction claimed represents (a) an
amount actually used during the taxable year to pay or retire the
indebtedness, 5) an amount irrevocably set aside during the taxable
year to pay or retire the indebtedness, or (c) a combination of both
(a) and (b).


GENERAL INSTRUCTIONS (References are to the Internal Revenue Code)

Corporations which must file Schedule PH (1120).—Every
corporation which comes within the classification of a “personal
holding company” must file a Schedule PH. The term “personal
holding company” means any corporation if at least 60 percent of its
adjusted ordinary gross income (as defined in section 543(b)(2)) for
the taxable year is personal holding company income (as defined in
section 543(a)), and if at any time during the last half of the taxable
year more than 50 percent in value of its outstanding stock is owned,
directly or indirectly, by or for not more than 5 individuals. For pur-
poses of determining such stock ownership, an organization described
in section 503(b) or a portion of a trust permanently set aside or to be
used exclusively for the purposes described in section 642(c) or a
corresponding provision of a prior income tax law shall be considered
an individual, unless such organization or trust meets the require-
ments of the last sentence of section 542(a) (2).

Corporations filing consolidated returns, see section 542(b).

For exceptions to the term “personal holding company,” see section
542(c).

A foreign corporation, whether resident or nonresident, which is
classified as a personal holding company under section 542 (not in-
cluding a foreign personal holding company as defined in section
552) is subject to the tax imposed by section 541 with respect to its
income from sources within the United States even though such in-
come is not fixed or determinable annual or periodical income spec-
ified in section 881(a). (See section 861.) In the case of a non-
resident foreign corporation, Schedule PH shall be attached to Form
1120-F. The term “personal holding company’ as used in subtitle
(A) does not include a foreign corporation if (1) its gross income
from sources within the United States for the period specified in sec-
tion 861(a) (2) (B) is less than 50 percent of its total gross income
from all sources and (2) all of its stock outstanding during the last
half of the taxable year is owned by nonresident alien individuals,
whether directly or indirectly through other foreign corporations.

Liquidation of certain corporations.—Section 333(g) provides
special rules with respect to the one-month liquidation of a corporation
which for at least one of the two most recent taxable years ending be-
fore February 26, 1964, was not a personal holding company under
section 542, but would have been a personal holding company under
section 542 for such taxable year if the law applicable for the first
taxable year beginning after December 31, 1963, had been applicable
to such taxable year.

Personal holding company income.—The term “personal hold-

ing company income” is defined by section 543(a) as the portion of
the adjusted ordinary gross income (as defined in section 543(b) (2) )
which consists of:

1. Dividends, interest, royalties (other than mineral, oil, or gas
royalties or copyright royalties), and annuities;

. The adjusted income from rents;

The adjusted income from mineral, oil, and gas royalties;

|. Copyright royalties;

. Produced film rents;

Amounts received as compensation for use of corporation
property by shareholder;

7. Amounts received under personal service contracts and from

the sale thereof; and

8. Amounts received from estates and trusts.
For a more detailed explanation, see section 543(a).

ayaen

Stock ownership.—Section 544 contains the following provisions
with reference to stock ownership.

(a) Constructive OWNERSHIP.—For purposes of determining
whether a corporation is a personal holding company, insofar as such
determination is based on stock ownership under section 542(a) (2),
section 543(a)(7), section 543(a) (6), or section 543(a) (4)—

(See pages 5 and 6 for additional

Page 4

(1) Stock NoT OWNED BY INDIVIDUAL.—Stock owned, directly
or indirectly, by or for a corporation, partnership, estate, or trust
shall be considered as being owned proportionately by its share-
holders, partners, or beneficiaries.

(2) FAMILY AND PARTNERSHIP OWNERSHIP.—An individual
shail be considered as owning the stock owned, directly or indi-
rectly, by or for his family or by or for his partner. For purposes
of this paragraph, the family of an individual includes only his
brothers and sisters (whether by the whole or half blood), spouse,
ancestors, and lineal descendants.

(3) Options.—If any person has an option to acquire stock,
such stock shall be considered as owned by such person. For pur-
poses of this paragraph, an option to acquire such an option and
each one of a series of such options, shall be considered as an
option to acquire such stock.

(4) APPLICATION OF FAMILY-PARTNERSHIP AND OPTION
RULES.—Paragraphs (2) and (3) shall be applied-

(A) for purposes of the stock ownership requirement pro-
vided in section 542(a) (2), if, but only if, the chect is to make
the corporation a personal holding company;

(B) for purposes of section 543(a) (7) (relating to personal
service contracts), of section 543(a) (6) (relating to the use of
property by shareholders), or of section 543(a) (4) (relating to
copyright royalties), if, but only if, the effect is to make the
amounts therein referred to includible under such paragraph as
personal holding company income.

(5) CONSTRUCTIVE OWNERSHIP AS ACTUAL OWNERSHIP.—Stock
constructively owned by a person by reason of the application of
paragraph (1) or (3) shall, for purposes of applying paragraph
(1) or (2), be treated as actually owned by such person; but stock
constructively owned by an individual by reason of the application
of paragraph (2) shall not be treated as owned by him for pur-
poses of again applying such paragraph in order to make another
the constructive owner of such stock.

(6) OPTION RULE IN LIEU OF FAMILY AND PARTNERSHIP
RULE.—If stock may be considered as owned by an individual
under either paragraph (2) or (3) it shall be considered as owned
by him under paragraph (3).

(b) ConverTiBLe SECURITIES.—Outstanding securities convertible
into stock (whether or not convertible during the taxable year) shall
be considered as outstanding stock—

(1) for purposes of the stock ownership requirement provided
in section 542(a) (2), but only if the effect of the inclusion of all
such securities is to’ make the corporation a personal holding
company;

(2) for purposes of section 543(a)(7) (relating to personal
service contracts), but only if the effect of the inclusion of all such
securities is to make the amounts therein referred to includible
under such paragraph as personal holding company income;

(3) for purposes of section 543(a)(6) (relating to the use of
property by shareholders), but only if the effect of the inclusion
of all such securities is to make the amounts therein referred to
includible under such paragraph as personal holding company in-
come; and

(4) for purposes of section 543(a) (4) (relating to copyright
royalties), but only if the effect of the inclusion of all such securi-
ties is to make the amounts therein referred to includible under
such paragraph as personal holding company income.

The requirement in paragraphs (1), (2), (3), and (4) that all con-
vertible securities must be included if any are to be included shall be
subject to the exception that, where some of the outstanding securities
are convertible only after a later date than in the case of others, the
class having the earlier conversion date may be included although
the others are not included, but no convertible securities shall be
included unless all outstanding securities having a prior conversion
date are also included.

structions)



SPECIFIC INSTRUCTIONS—Continued

If the amount claimed as a deduction on line 12 or 13, page 1 of
this return, represents an amount irrevocably set aside to pay or
retire the indebtedness, explain fully in an attached statement the
circumstances and method by which it was irrevocably set aside.

13. Amounts used or irrevocably set aside to pay or retire
qualified indebtedness (section 545(c)).—Enter the amount
shown on line 5, Schedule C-1. Subject to the limitations described
in section 545(c), section 545(c)(1) provides that in determining
undistributed personal holding company income there shall be allowed
as a deduction amounts used, or amounts irrevocably set aside (to the
extent reasonable with reference to the size and terms of the in-
debtedness), to pay or retire qualified indebtedness (as defined in
section 545(c)(3)). Section 545(c)(2) states that this deduction
shall be applicable only with respect to a corporation—

(A) which for at least one of the two most recent taxable years
ending before February 26, 1964, was not a personal holding com-
pany under section 542 but would have been a personal holding
company under section 542 for such taxable year if the law appli-
cable for the first taxable year beginning after December 31, 1963,
had been applicable to such taxable year, or

(B) to the extent that it succeeds to the deduction referred to in
section 545(c)(1) by reason of section 381(c) (15).

‘Any corporation that claims a deduction for amounts used ot
irrevocably set aside to pay or retire qualified indebtedness must sub-
mit detailed information and any necessary computation showing that
it is a corporation described in paragraph (A) above, or to the extent
that it succeeds to such deduction by reason of section 381(c) (15),
it must submit detailed information showing that the distributor or
transferor corporation was a corporation described in paragraph (A)
above. Corporations succeeding to the deduction for qualified in-
debtedness by reason of section 381(c)(15) should make necessary
adjustments to Schedule C-2 to take into account such indebtedness.

Schedule C-2 should be completed in all cases where qualified in-
debtedness has changed during the taxable year, even though no
payments or set-asides were made and no deduction is being claimed.

See Instruction 12 for additional information which must be sub-
mitted to establish the reasonableness of amounts irrevocably set
aside to pay or retire qualified indebtedness.

Election to Treat as Nondeductible Certain Amounts Used or Irrev-
ocably Set Aside to Pay or Retire Qualified Indebtedness Which Are
Otherwise Deductible Under Section 545(c)(1).—The election to
treat such amounts as nondeductible must be made on or before the
15th day of the third month following the close of the taxable year
with respect to which the election applies and shall be irrevocable
after such date. The election must be made on or before such date
whether or not an extension of time for filing Form 1120 has been
granted. The election must be in the form of a signed statement
and shall include the following:

(1) Taxpayer's name, address, and employer identification number;

(2) A statement that the taxpayer wishes to elect in accordance
with section 545(c) (4);

(3) The amounts paid or set aside which are to be treated as non-
deductible under section 545 (c) (4);

(4) All information necessary to identify the qualified indebted-
ness with respect to which such amounts were paid or set aside;

(5) The date on which such payments or set-asides were made; and

(6) All information necessary to identify the indebtedness referred
to in section 545(c) (3) (A) (ii) incurred for the purpose of making
the payments or set-asides which the taxpayer elects to treat as non-
deductible, including—

(a) The date on which such indebtedness was incurred,
(b) The amount of such indebtedness,
(c) The person or persons to whom such indebtedness is owed,

an
(d) A statement that such person or persons do not own more
than 10 percent in value of the taxpayer's outstanding stock.

14. Lien in favor of the United States.—The taxpayer may
deduct the amount of any lien in favor of the United States (notice
of which has been filed as provided in section 6323(a)(1), (2),
or (3)) to which the taxpayer is subject at the close of the taxable
year. However, the amount deducted may not exceed taxable income
as adjusted under sections 545(b) and 545(c), computed without re-
gard to this deduction. Thus the amount to be entered on line 14
shall not exceed line 6 Jess the total of lines 7 through 13, inclusive.

15. Deduction for dividends paid.—Enter the amount of the
dividends-paid deduction as computed in Schedule B. The deduc-
tion for dividends paid is the sum of (1) the dividends paid during
the taxable year, (2) the consent dividends for the taxable year, and
(3) the dividend carryover from the 2 preceding taxable years.

For purposes of determining the deduction for dividends paid to be
entered on line 15, the rules provided in section 562 (relating to rules
applicable in determining dividends eligible for dividends-paid de-
duction) shall be applicable.

Page 6

In general, a consent dividend is not an actual corporate distribu-
tion but is ‘a hypothetical distribution evidenced by shareholders’
consents to treat as a dividend an amount which would constitute
a dividend if distributed in money to such shareholders on the last
day of the taxable year of such corporation. Such consent dividend
may be availed of only if the person filing such consent owns com-
mon stock (or participating preferred stock, the participating rights
of which are unlimited), and the amount specified in the consent
is pro rata, with no preference to any share of stock as compared with
other shares of the same class, and with no preference to one class
of stock as compared with another class except to the extent that
the former is entitled to such preference. The effect of the consent
is that the amount of the consent dividend is treated both as a divi-
dend and as a contribution to the capital of the corporation by the
shareholder on the last day of the taxable year of the corporation. A
consent shall be filed in duplicate on Form 972 at any time but not
later than the due date of the corporation's income tax return for the
taxable year for which credit is claimed. In addition, Form 973
must be filed by the taxpayer corporation.
fi The dividend carryover to a taxable year shall be determined as
‘ollows:

(1) For each of the 2 preceding taxable years, there shall be
determined the taxable income computed with the adjustments pro-
vided in section 545 (relating to the computation of undistributed
personal holding company income) (whether or not the taxpayer was a
personal holding company for either of such preceding taxable years),
and there shall also be determined for each such year the deduction
for dividends paid during such year as provided in section 561 (but
determined without regard to the dividend carryover to such year).

(2) There shall be determined for each such taxable year whether
there is an excess of such taxable income over such deduction for
dividends paid or an excess of such deduction for dividends paid
over such taxable income, and the amount of each such excess.

(3) If there is an excess of such deductions for dividends paid
over such taxable income for the first preceding taxable year, such
excess shall be allowed as a dividend carryover to the taxable year.

(4) If there is an excess of such deduction for dividends paid
over such taxable income for the second preceding taxable year, such
excess shall be reduced by the amount determined in paragraph (5),
and the remainder of such excess shall be allowed as a dividend carry-
over to the taxable year.

(5) The amount of the reduction specified in paragraph (4) shall
be the amount of the excess of the taxable income, if any, for the
first preceding taxable year over such deduction for dividends paid,
if any, for the first preceding taxable year.

18, Dividends paid after close of taxable year (excluding
deficiency dividends as defined in section 547(d)).—Enter on
line 18 and not in Schedule B, the amount of the dividends paid after
the close of the taxable year and on or before the 15th day of the third
month thereafter, if the taxpayer elects in its return for the taxable
year to have such dividends considered as paid during such taxable
year. The amount allowed as a dividend under this paragraph with
respect to any taxable year shall not exceed either the undistributed
personal holding company income of the corporation for the taxable
year, computed without regard to the dividends paid pursuant to this
paragraph (line 17 of page 1 of this Schedule) or 10 percent of the
sum of the dividends paid during the taxable year, computed with-
out regard to this paragraph (ie., 10 percent of line 1, Schedule B),
(See section 563.)

Neither line 15 nor line 18 should include “deficiency dividends.”
The term “deficiency dividends” means in general only those divi-
dends which are paid by a corporation pursuant to a specific proce-
dure set forth in section 547, which includes a requirement that
there must first be a determination by a court, by closing agreement,
or (under regulations) a written agreement signed by the District
Director and by or on behalf of the taxpayer relating to the liability
of the corporation for personal holding company tax.

Information required under section 6501(f).—Section 6501(f)
provides as follows:

(£) Personal Holding Company Tax.—If a corporation which is
a personal holding company for any taxable year fails to file with its
return under chapter 1 for such year a schedule setting forth—

(1) the items of gross income and adjusted ordinary gross in-
come, described in section 543, received by the corporation during
such year, and

(2) the names and addresses of the individuals who owned,
within the meaning of section 544 (relating to rules for determin.
ing stock ownership), at any time during the last half of such year
more than 50 percent in value of the outstanding capital stock
of the corporation,

the personal holding company tax for such year may be assessed, or
a proceeding in court for the collection of such tax may be begun
without assessment, at any time within 6 years after the return for
such year was filed.

‘fected U.S. GOVERNMENT PRINTING OFFICE :1966-0-220-029


SCHEDULE PH
(Form 1120)

Treasury Department
1 Revenue Service

Computation of U.S. Personal Holding Company Tax

For the year January 1-December 31, 1966, or other taxable year

beginning ......

u,
hi

.. 1966, and ending ..

1966

Name and address

Employer Identification No,

UNDISTRIBUTED PERSONAL HOLDING COMPANY INCOME COMPUTATION
1 Taxable income before net operating loss deduction and special deductions (line 28, Form 1120) .

Additions:
2 Contributions deducted in computing line 1 (line 19, Form 1120) . . . .

3 Excess of expenses and depreciation under section 545(b)(8). (Schedule A) . .
4 Amount added to taxable income where lien in favor of the United States is satisfied or

released. © 1 wwe ee ee

5 Total of lines 2,3,and4 6 6 ee
6 Total oflineslandS. 2. 6. ee ee ee

Deductions:

7 Federal and foreign income, war profits, and excess profits taxes. (Not deducted in com-
puting line 1) (attach schedule). . . . se

8 Contributions deductible under section 545(6)(2) (attach schedule—see instructions
for limitation). 6 6. ee

9 Net operating loss for the preceding taxable year deductible under section 545(b)(4)
10 (a) Excess of net long-term capital gain over net short-term
capital loss (line 14, separate Schedule D, Form 1120) . .

(b) Less: Income tax attributable to such excess (attach com-
putation if amount is different from line 22, separate
Schedule D, Form 1120).

11 Special deduction for bank affiliates allowable under section 545(b)(6) .

12 Amounts used or irrevocably set aside to pay or retire indebtedness of any kind incurred
prior to January 1, 1934 (attach schedule—see instructions) . Lee
13 Amounts used or irrevocably set aside to pay or retire qualified indebtedness. (Sched:
UleC-I.

14 Amount of a lien in favor of the United States. (See instructions for limitation) .

15 Deduction for dividends paid (excluding dividends paid after close of taxable year).
(Schedule By) 2 - ee ee ee

16 Total of lines 7through15. © 6 ee ee ee fe

17 Undistributed personal holding company income before the deduction shown on line 18 (line 6 less line 16) . .
18 Less: Dividends paid after close of taxable year (excluding deficiency dividends as defined in section 547(d))

but not in excess of the lesser of line 17 or 10 percent of line 1, Schedule B. . © 2 1 1 e+ |

19 Undistributed personal holding company income (line 17 less line 18). . . . . 1.

COMPUTATION OF TAX

20 Personal Holding Company tax due (amount on line 19 multiplied by 70 percent). Enter here and on Form 1120
(line 10, Tax Computation Schedule, page 3) or Form 1120-F (line 10, page 2, or line 8, Tax Computation Schedule,
page 5), whichever is applicable... . ..... +... ss +. se eee



Schedule PH (1120) 1966 Page 2
INFORMATION REQUIRED UNDER SECTION 6501(f) (See page 6)
(1) Personal Holding Company Income

1 Dividends
2 Interest. . oe
(a) Less: Amount excluded under section 543(0)(2)(0) (attach schedule) .
3 Royalties (other than mineral, oil, or gas royalties or copyright royalties)
4 Annu .o |.
5 Rents . . are _
(a) Less: Adjustments described in section 543(0)(2)¢A) (attach schedule) :
6 Mineral, oil, and gas royalties .
(a) Less: Adjustments described in section 1 543(0)(2)(8) (attach schedule).
7 Copyright royalties

Produced film rents . . .

Amounts received as compensation for use of corporation property by st shareholder
10 Amounts received under personal service contracts and from the sale thereof .

ro

11 Amounts received from estates and trusts
12 Total personal holding company income. se ee
(2) Stock Ownership

Enter the names and addresses of the individuals who owned, in the aggregate, directly or indirectly, at any time during the last half of the taxable
year, more than 50 percent in value of the outstanding stock of the corporation.

Highest percentage of shares owned during last half of taxable year
Name Address |
| | Preferred | Common

a).
(2).
@).
A).
3) i |
Schedule AW—EXCESS OF EXPENSES AND DEPRECIATION OVER INCOME FROM PROPERTY NOT ALLOWABLE UNDER SECTION 545(b)(8)
(See Instruction 3)
~ 7 5. Repairs, insurance, and) | 7.Ancome from
1, Kind of Property Keates | 3 Gogg other k Depreciation aheeeBssensestoecion'| gg Tale g tent or other bier 6

| 162) (Itemize below) Compensation |

@)
(b)
©).
@)

Total excess of expenses and depreciation over rent or other compensation. Enter here and on line 3, pagel. . - -

Explanation of expenses entered in column 5

State the names and addresses of persons from whom rent or other compensation was received for the use of, or the right to use, each property.

Schedule B.—DEDUCTION FOR DIVIDENDS PAID (See Instruction 15)

1 Taxable dividends paid, excluding (a) dividends considered as paid in the preceding taxable year under section 563,
and (b) deficiency dividends as defined in section 547. . . .
2 Consent dividends (attach schedule) . 2 2 2. - ee ee

3 Taxable distributions (total of lines 1 and 2) .

4 Dividend carryover from first and second preceding taxable years (attach computation) .
5 Deduction for dividends paid (total of lines 3 and 4). _ Enter here and on line 15, page 1

(See page 4 for General Instructions)


Schedule PH (1120) 1966 Page 3

Schedule C-1.—COMPUTATION OF DEDUCTION FOR AMOUNTS USED OR IRREVOCABLY SET ASIDE TO PAY OR RETIRE QUALIFIED INDEBTED-
NESS (See Instruction 13)

1 Indicate separately:

(a) Amount actually used during the taxable year covered by this return to pay or retire qualified indebtedness
(except payments from amounts irrevocably set aside before the taxable year to pay or retire qualified in-
debtedness with respect to a contract, as described in section 545(c)(3)(C)) a :

(b) Amount irrevocably set aside during the taxable year covered by this return to pay or retire qualifies in-
debtedness, but not actually used during the taxable year for such purpose .

(c) Total . :

2 Reduction for amounts described in section 545(e)(5) (attach schedule)
3 Line 1(¢) less line 2. ee : Soe
4 Portion of amount shown on line 3 which is treated as nondeductible by reason of the election provided in section

545(c)(4) (attach statement—see instructions). Fo
5 Amount claimed as a deduction (line 3 less line 4). Enter here and on line 13, page 1 .

Schedule C-2—COMPUTATION OF QUALIFIED INDEBTEDNESS. NOTE—If you were a personal holding company for the preceding taxable year
omit lines 1 through 6 and enter on line 7 the amount of qualified indebtedness as of the beginning of the taxable year covered by this return. If you
were not a personal holding company for the preceding taxable year, complete all applicable lines.

1 Enter amount of indebtedness which was incurred after December 31, 1933, and before January 1, 1964, and which
was outstanding as of the first day of the first taxable year beginning after December 31, 1963 .

nN

Less: Amounts included in line 1 which were irrevocably set aside before the first day of the first taxable year begin-
ning after December 31, 1963, to pay or retire indebtedness with respect to a contract (section 545(c)(3)(C)) .

wo

Line 1 less line 2. .
Aggregate amount of indebtedness incurred after December 31, 1963, and before the taxable year covered by this |

s

return, for the purpose of making a payment or set-aside in the same taxable year, but, in the case of such a pay: |
ment or set-aside, enter such indebtedness only to the extent the deduction otherwise allowed in section 545(c)(1)
for such payment or set-aside was treated as nondeductible by reason of the election provided in section 545(c)(4).
(See section 545(c)(3)(A)(ii)) -

Total of lines 3 and 4.

Less: (a) Aggregate of amounts actually used or irrevocably set aside (including amounts
which were treated as nondeductible by reason of the election provided in sec-
tion 545(c)(4)) to pay or retire qualified indebtedness in taxable years begin-
ning after December 31, 1963 (not including taxable year covered by this return). |... |

a

a

(b)

Aggregate amount of pro-rata reductions in taxable years beginning after De-
cember 31, 1963 (not including taxable year covered by this return) with re-
Spect to disposition of certain property a after December 31, 1963 (section
545(0)(6)). se So

c

Aggregate of amounts which ceased to be outstanding during taxable years be-
ginning after December 31, 1963 (not including taxable year covered by this re-
turn) other than as a result of a payment or set-aside (attach statement)

x

Line 5 less line 6

Total indebtedness incurred during the taxable year for the purpose of making a payment or set-aside in the same

taxable year, but, in the case of such a payment or set-aside, enter such indebtedness only to the extent the deduc-

tion otherwise allowed in section 545(c)(1) for such payment or set-aside is treated as nondeductible by reason of |

the election provided in section 545(c)(4). (See section 545(c)(3)(A)(ii))
9 Line 7 plus line 8.

10 Less: (a) Amounts included in line 9 which were, at any time after December 31, 1963,
and before payment or set-aside, owed to a person who at such time owned (or
was considered as owning within the meaning of section 318(a)) more than 10
percent in value of your outstanding stock. NOTE.—If you were a personal
holding company for the preceding taxable year, enter such amounts which were
‘owed at any time on or after the first day of the taxable year covered byt this
return (section 545(c)(3)(B)) -

(b) Pro-rata reduction with respect to disposition of certain Property during the tax-
able year (section 545(c)(6)) . Foe ee :

11 Line 9 less line 10 . soe woe . . - . . .
12 Less: Amounts included in line 11 which ceased to be outstanding during the taxable year other than as a result of

a payment or set-aside (attach statement) :
13 Qualified indebtedness before payments and set-asides (line 11 less line 12).

14 Amounts used or irrevocably set aside (including amounts which were treated as nondeductible by reason of the elec- |
tion provided in section 545(c)(4)) during the taxable year to pay or retire amount shown on line 13... . . |

15 Qualified indebtedness as of end of taxable year (line 13 less line 14)