Form 1120+ 1990) Page 5
Schedule G | Deductions Allocated or Apportioned to Foreign Trade Income (See instructions for limitations on
deductions before completing lines 1 through 14.)

(a) Using Administrative | (b) Not Using Administrative
Pricing Rules Pricing Rules
1 Foreign direct costs:
a Section 924(e)(1) (advertising and salespromotion). . . . . .. .. . Lda
b Section 924(e)(2) (certain processing andarrangingcosts). . . . . . . . LIb
¢ Section 924(e)(3) (certain transportation costs) . . sone . Lie
d Section 924(e)(4) (certain determination and transmittal costs) 2... . Lad
e Section 924(e)(5) (assumption of creditrisk) . . . . . 2... . . . [de
f Addlineslathroughle. 2... 2. ee ee be
2 Advertising . . 2
3 Interest . 3
4 Depreciation from Form 4562 (less denrecition claimed elsewhere on this
return) (attach Form 4562) . te . .. L4
5 Salaries and wages Se ee woe ee ee EB
6 Rents. ee ee ES
7 Sales commissions 7
8 Warehousing Co toe ee EB
9 Freight... ee:
10 Compensation of officers Se ee ee LO
11 Baddebts(seeinstructionsy . . . . .............4f11
12 Pension, profit-sharing,etc., plans... . . .. . we, a2
13 Employee benefit programs. . . . . . es Bo ©
14 Other (list): >
14
15. Total (add tines 1f through 14) . oe . . . . L415
16a Exemption percentage from line 3d,ScheduleE . . . . ..... . . {26a % TL,
b Exemption percentage from line 2d,ScheduleE . . . . . . , [6b %
17 Deductions relating to exempt foreign trade income—Line 15 (column (a times
line 16a and line 15 (column (b))timesline16b . . . 17
18 Total deductions relating to nonexempt foreign trade income—Line 15 less line
17. (Enter here and on line 14, columns (a) and (b), Schedule B.)_ 18
Tax Computation (See instructions.)
1 Check if you are a member of a controlled group (see section 927(d)(4)) Soe ee >

2 Ifthe box on line 1 is checked:
a Enter your portion of the $50,000 amount and $25,000 amount (in that order) in each taxable income

bracket:
1
ols LJ wls |_| V/
b Enter your share of the additional 5% tax (not to exceed $11,750) . . . ls
3 Income tax (see instructions to figure the tax). Check this box if the FSC is a qualified personal service
corporation (see instructions) » rn Soe ee .. . Ls
4 Foreign tax credit (see instructions—attachForm1118) . . . . . . . hone an -L4
5 Line3lessline4 . 2... 2 we Se Soe ee |
6 Personal holding company tax (attach Schedule PH (Form 1120)) . . . 2... 2 1... 6
7a Alternative minimum tax (see instructions—attach Form 4626). . . . . . . 2... Ta
b Environmental tax (see instructions—attach Form 4626). . . 2 2...
8 Total tax—Adg lines 5 through 7b. Enter here andonlinel, pagel . ._. we -. | 8

“U.S. Government Printing Otfice: 1990 — 265-258


Form 1120-FSC (1990)

Page 4

Percentages To Be Used in Figuring Exempt Foreign Trade Income—Sections 923(a)(2) and (3),

and 291(a)(4)

Note: /f all shareholders of the FSC are C corporations, enter .30000 on line 2d and .65217 on line 3d and skip all other lines.
/f all shareholders are other than C corporations, enter .32000 on line 2d and .69565 on line 3d and skip all other lines,

1 Percentage (express as decimal to 5 places) of voting stock owned by shareholders that are C corporations
2 Exemption for foreign trade income determined without regard to administrative pricing rules:

a Difference between section 923(a)(2) and section 291(a)(4)(A) percentage 2a +02000
b Section 923(a)(2) percentage 2b «32000
c Line 2a times line 1. a | 2c |
d Exemption percentage—Line 2b less line 2c. Enter here and on line 9b, b, Schedule E B; and on line 16,

Schedule G.). aoe 2d

3 Exemption percentage for foreign trade i income determined under ‘administrative pricing rules:

a Difference between section $23(0X3) fraction and section 291¢6X4XB) fraction 16/23 ~ 15/23 « =

1/23) expressed as a decimal . [3a 04348
b Section 923(a)(3) fraction (16/23) expressed as a decimal . 3b -69565
¢ Line 3a times line 1. a 3c
d Exemption percentage—Line 3b less line o 3c. (Enter here and on n line 9a, "Schedule B: and ¢ on tine

16a,ScheduleG.). . . . 3d

Schedule F J Nonexempt Forelgn Trade Income and Nonforeign Trade income
Part |I—Nonexempt Foreign Trade Income
(a) Using Administrative | (b) Not Using Administrative

1 Enter the remaining 50% of total receipts attributable to the sale, exchange, or other Pricing Rules

Pricing Rules

disposition of military property and related services. Note: The first 50% of these
receipts was reported on lines 1 and 3a of Schedule B an

International boycott income (see instructions) .

Illegal bribes and other payments (see! instructions)
Add lines 1, 2, and 3 oe

Enter cost of goods sold and other expenses related to: above i income (see instructions) .

Auanhwn

Nonexempt foreign trade income—Line 4 less line 5. (Enter here and on line 12,
columns (a) and (b), Schedule B.) . +

Part i—Nonforeign Trade Tncome

7 Small FSCs—If line 6f of Schedule B exceeds line 6e of Schedule B, enter the excess. + Cinelude the

deduction for cost of goods sold attributable to the excess on line 18 below.) 74
8 Interest income . 8
9 Dividend income (attach schedule—see instructions) 9
10 Carrying charges 10
11 Royalties . il
12 Other investment income . . 12
13 erie excluded under section » 92409 0 on basis of use, subsidized rect and receipts | from related 13
14 Income from excluded property under sections 927(a)(2) and (3) . : : 14
15 Income from transactions that did not qualify as foreign trade income because the “economic process
requirements” (see General Instruction C3 for definition) were not met . ree oF ©)
16 Other income 16
17 Total—Add lines 7 through 16 . 17
18 Enter deductions allocated or apportioned to line 17 income (attach schedule—see instructions) 18
19 Taxable nonforeign trade income—Line 17 less line 18. (Enter here and on line 17, Schedule B.) 19



Form 1120-FSC (1990)
[Schedule t MEDERERIES

Beginning

of tax year End of tax year

Assets
1 Cash .
2a Trade notes and accounts s receivable.
b Commissions receivable .

@)

) te)

¢ Less allowance for bad debts
Inventories .
U.S. government obligations
Tax-exempt securities (see instructions)
Other current assets (attach schedule) .
Loans to stockholders
Mortgage and real estate loans
Other investments (attach schedule).
10a Buildings and other depreciable assets.

b Less accumulated depreciation
11a Depletable assets .

b Less accumulated depletion
12 Land (net of any amortization) .
13a Intangible assets (amortizable only) .

wrnNoaunw

b Less accumulated amortization
Other assets (attach schedule).
Total assets .
Liabilities and Stockholders’ Faulty,
Accounts payable .
Mtges., notes, bonds payable in less than Lyear
Transfer prices payable .
Other current liabilities (attach schedule)
Loans from stockholders. .
Miges., notes, bonds payable in I year or more.
Other liabilities (attach schedule) .
Capital stock we
Paid-in or capital surplus
Retained earnings—Appropriated (attach schedule)
26 Retained earnings—Unappropriated

27 Less cost of treasury stock . .
28 Total liabilities and stockholders’ equi

14
15

16
17
18
19
20
21
22
23
24
25

¢ ) ¢

d Reconciliation of Income per Books With Income per Return

@

Net income per books

Federal income tax :

Excess of capital losses over capital gains
Income subject to tax not recorded on
books this year (itemize): __ .

Pwne

5 Expenses recorded on books this year
not deducted on this return (itemize):

a Depreciation . . . $

b Deductions attributable to
exempt foreign trade income $ __

¢ Travel and entertainment $

6 stotal of lines 1 through 5

7 Income recorded on books this year
not included on this return (itemize):

a Tax-exempt interest. .$__._..-.2-..

b Exempt foreign trade
income. .

8 Deductions on this return not charged
against book income this year (itemize):
aDepreciation. . . .$

9 Totalof lines 7 and 8

10 Taxable income (line 6 less line %

Analysis of Unappropri

jated Retained Earn!

ings per Books (line 26 above)

1 Balance at beginning of year
2 Net income per books
3 Other increases (itemize):

4 Total oflines 1, 2, and 3

5 Distributions: a Cash .

b Stock .

¢ Property .
6 Other decreases (itemize!

7 Total of lines 5a through 6

8 Balance at end of year (line 4 less line 7)



ron 1120-FSC | U.S. Income Tax Return of a Foreign Sales Corporation — | 2¥2N.2545.0935_

> See separate instructions.
Department of the Treasury > Please type or print. ; 1990
Internal Revenue Service For calendar year 1990 or other tax year beginning ___ 1990 and ending ld,
A Date of incorporation Name D Country or U.S. possession of incor-

poration (See instructions.)

B Osta of FSC or Smal! FSC Number, street, and room or suite no. (see instructions) E Employer Identification number
election

ction made; | City or town, state, ZIP code, or country F Total assets (See instructions.)

© Check type of

Orsc ©) smairse \

$

’G Refer to the last page of the instructions and enter the principal:
(1) Business code number > (2) Business activity > (3) Product or service >

H Compiete the following for the shareholder (individual, corporation, partnership, trust, or estate) who at the beginning of the FSC tax year was the principal shareholder. If two
or more shareholders owned equal amounts of stock, enter the information for the shareholder that has the same tax year as the tax year of the corporation.

(2) Name (2) Identifying number
(8) Address (4) Total assets (corporations only)
$
(5) Percentage of voting stock owned | (6) Tax year end (month and year) | (7) Service Center where return was (or will be) filed (@) Foreign owner?
Cl yes [1 no

Note: /f the FSC is a member of a controlled group of corporations as defined in section 927(dX‘4) and the principal shareholder for which information is provided in tems H(1)
through H(8) above is not the common parent of the group, complete items H(9) through H(15) below for the common parent of the group. (See instructions.)

(9) Name of common parent (10) Identifying number (11) Service Canter where return was (or will be) filed
(12) Address
(13) Percentage of voting stock owned (14) Tax year end (month and year) (15) Total assets (consolidated, if applicable)
$ |
1 Enter the amount of tax-exempt interest income received or accrued during the taxyear _.. .$ I

J Administrative Pricing Rules:
(1) Check the appropriate box(es) to indicate the pricing rule(s) used in determining the taxable income on transactions resulting in foreign trading gross receipts:
(#) [1 1.83% ot foreign trading gross receipts (b) [1] 23% of combined taxable income (¢) } Marginal costing (© 1 Section 482 methos

(2) Check here if the FSC and the related supplier(s) have met the payment arrangement requirements of Temporary Regulations section 1.925(a)-
11(b)2X(ii) and are thereby electing under that Regulations section to have met the requirements for use of the administrative pricing rules .

Tax Due or Overpayment

1 Totaltax(ScheduleJ,line8) 2. 6 we —
2 Payments:

a 1989 overpayment creditedto1990 . . | 2a

b 1990 estimated tax payments . . . 2b

¢ Less 1990 refund applied for on Form 4466 2c |C Yaar

e Tax deposited with Form 7004. . toe ee ee pO

f Credit for Federal tax on fuels (attach Form 4136) . woe 2. LSE

U.S. income tax paid or withheld at source (attach Form 10428) . toe [eg

h Total payments—Add lines 2d through 2g . . . .. . .p2h
3 Enter any penalty for underpayment of estimated tax—check oO it Form 2220 is attached. ee LB
4 Tax due—If the total of lines 1 and 3 is larger than line 2h, enter amount owed . re a)
5 Overpayment—lf line 2h is larger than the total of lines 1 and 3, enter amount overpaid foe on
6 Enter amount of line 5 you want:_a Credited to 1991 estimated tax > | b Refunded >

Under penalties of perjury, I declare that Ihave examined this return, including accomipanying schedules and statements, and to the best of my knowledge and
Please belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign
Here » Signature of officer Date » Titie
. Preparer’s Date Preparer's social security no.
i » Check a
Use Only sclterapioyscy ow > E.LNo.>
and address ZIP code >

For Paperwork Reduction Act Notice, see separate Instructions. Form 1120-FSC (1990)


Form 1120-FSC (1990) Page 2
Cost of Goods Sold Related to Foreign Trading Gross Receipts (See instructions.)

(a) Using Administrative (b) Not Using Administrative
Pricing Rules Pricing Rules
1 Inventory at beginning of year. 1
2 Purchases . . 2
3 Costoflabor . . 3
4a Additional section 263A costs (ee instructions —attach schedule) . 4a
b Other costs (attach schedule). . . an ra O)
5 Total—Addlines 1through4b . . be am)
6 Inventory at end of year. . . coe ee 6
7 Cost of goods sold—Line 5 tess line 6. Enter here and on line 7 of
Schedule B. Small FSCs, see instructions.) eee ee LZ

8a Check all methods used for valuing closing inventory:
@ 1 Cost Gi) C1 Lower of cost or market as described in Regulations section 1.471-4 (see instructions)

(iii) ( writedown of “subnormal"” goods as described in Regulations section 1.471-2(c) (see instructions)

wy O Other (Specify method used and attach explanation.) >
b Check if the LIFO inventory method was adopted this tax year for any goods {if checked, attach Form 970) .
If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed under LIFO (ep yo
d Do the rules of section 263A (with respect to property produced or acquired for resale) applytothe FSC? . . . . . . LJ Yes LINo
e Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If “Yes,” attach explanation. . [_] Yes [_] No

Additlonal Information Required (continued from page 1)

Yes | No

Was the FSC at any time during the year engaged in a trade or business in the U.S.?
Is the FSC a foreign personal holding company or a personal holding company? (See instructions. ). .
During the tax year, did the FSC maintain any part of its accounting/tax records on a computerized system? .
FSC Qualification Requirements:
()) Enter the greatest number of shareholders the FSC had at any time during the tax year > _
(2) Did the FSC have any preferred stock outstanding at any time during the tax year?
(3) During the tax year, did the FSC maintain an office, in a “qualifying foreign country” or "u: 8 possession” "(see
instructions), in which a complete set of books and records (including invoices) for the FSC was maintained? .
(4) During the tax year, did the FSC maintain the records required under section 6001 at a location within the U.S.?
(5) At all times during the tax year, did the FSC have at least one non-U.S. resident on its board of directors?
(6) At any time during the tax year, was the FSC a member of a controlled group of corporations that included a DISC as a
member? . . es
O Foreign Management Tests. (These requirements do not apply to. small FSCs. ):
(1) Did all formally convened meetings of the board of directors and all formally convened meetings of the shareholders
take place outside the U.S.? oe
(2) Principal bank accounts:
(a) Were all dividends, legal and accounting fees, salaries of officers, and salaries or fees of members of the board of
directors disbursed from bank accounts maintained outside the U.S.? (If so, these accounts are considered to be the
FSC’s principal bank accounts.) . yi)
(b) At all times during the tax year, did the FSC maintain its principal bank accounts i ina a “qualifying foreign country” ae )
or “U.S. possession”? (See instructions.) . Be
Bank names > Account numbers >
P Foreign Economic Process Requirements. (These requirements do not apply to small FSCs.
(1) Check the appropriate box below to make an annual election to group the sales activities described under Regulations section
1.924(d)-1(c) on one of the following bases:
Cicustomer grouping © Cicontract grouping 1 product or product line grouping © C. product or product line subgroupings
(2) Check one or both boxes below to indicate how the FSC met the “foreign direct costs” requirement:
CO The FSC (or any person under contract with the FSC) met the 50% test of section 924(d)(1).
(1 The FSC (or any person under contract with the FSC) met the alternative 85% test of section 924(d)(2). Check to indicate the
paragraphs of section 924(e) with respect to which this alternative test was satisfied: (1)0 (2017 @0 @MO ©O
(3) Check the appropriate box below to make the annual election described in Regulations section 1.924(d)-1(e) to group foreign direct
costs on one of the following bases: Cicustomer grouping [J contract grouping [J product or product line grouping
Q Activities Relating to Disposition of Export Property:
(1) Check here if the FSC is electing under Regulations section 1.924(e)-1(e)(1) to bear the economic risk of nonpayment of certain commission contracts » [1]

(2) If you checked the box in Item Q(1), enter the number of the method (from the five methods listed in Regulations section
1.924(e)-1(e)(1)) that describes how the risk is to be borne by the FSC >

zurex



Form 1120-FSC (1990)

Page 3

Taxable Income (or Loss)

Part |—Income Attributable to Foreign Trade Income

Type of Receipt (see instructions)

1 Sale, exchange, or other disposition of export property. (Include only 50% of f military

property sales. Include the other 50% on line 1, Schedule F.)
2 Lease or rental of export property for use outside the U.S.
3 Services related and subsidiary to:

a Sale, exchange, or other disposition of export property. (Include only 50% of services {
related to the sale or other disposition of id property. | Include the other 50% on

line 1, Schedule F.).
b Lease or rental of export property

4 Engineering or architectural services for construction projects outside the u. s.

5 Managerial services for an unrelated FSC or DISC. Geei instructions for determination

of qualifying amount.) -
6 Total Foreign Trading Gross Receipts:

a Add lines 1 through 5. (Small FSCs must complete iines 6b througe 6h.)

b Small FSC limitation (section 924(b)(2)(B)) . .
¢ Controlled group member's share of line 6b (see instructions) .

d Enter smaiter of: (a) number of of days in in tax year divided ad 365,
or (b) 1 (one) .

e Proration of limitation—Line 6b or line 6c (whichever "apes
times line 6d . : soe

f Enter total of columns (a) and (b), line 6a. (if commission
income is included on line 6a, see special computation rule in
instructions for line 6f.) cn see

g Small FSC foreign trading gross receipts that may be taken into
account in determining exempt foreign trade income (enter the
smaller of line 6e or 6f) oo

$5,000,000

100

{a) Using Administrative
Pricing Rules

{(b) Not Using Administrative
Pricing Rules

Note: /f line 6f exceeds line 6e, enter the excess on tine 7 of Schedule F. See

instructions for line 6h if commission income is involved.

h Allocate the amount from line 6g to columns (a) and (b)—See instructions .

7 Cost of goods sold (Schedule A, line 7) (Small FSCs, enter only the portion of cost of
goods sold that is attributable to the receipts on line 6h above.) Geel instructions for

Schedule A.) .

8 Foreign trade income-—Line bac or 6h (whichever applies) less line 7.

9a Exemption percentage from line 3d, Schedule E
b Exemption percentage from line 2d, Schedule E

10 Exempt foreign trade income—Multiply line 8 (column ¢ @) by line 93 and line 8

(column (b)) by line 9b.
11 Nonexempt foreign trade income—Line 8 less line 10 .
12 Enter nonexempt foreign trade income from line 6, Schedule F .
13 Add lines 11 and 12

14 Enter deductions from line 18, Schedule G, that are attributable to nonexempt foreign

trade income

15 _ Net income attributable to nonexempt ‘foreign trade income—Line 13 less line 14

Part 1I—Taxable Income (or Loss)

16 Taxable income attributable to foreign trade income—Enter total of columns (a) and (b), line 15, reduced by
any nontaxable income included in line 15, column (b). Attach a schedule that shows the computation of the

taxable portion of line 15, column (b) . :
17 Taxable nonforeign trade income from line 19, Schedule F F.

18 Taxable income (or loss) before net operating loss deduction and dividends- received ‘deduction—Add lines 16. and 17

19 Less: a Net operating loss deduction (see instructions—attach schedule) -
b Dividends-received deduction (see instructions—attach schedule) .

¢ Add lines 19aand19b .

20 = Taxable income (or loss)—Line 18 less line ‘ige (enter here and s see instructions for Schedule J for figuring

the tax on this income)