Schedule K—Other Information

The following instructions apply to questions 1 through 15. Complete all items that apply.

Question 3 Check the “Yes” box if the RIC is a subsidiary in a parent-subsidiary controlled group. This applies even if the RIC is a subsidiary member of one group and the parent corporation of another.

If the RIC is an “excluded member” of a controlled group (see section 1563(b)(2)), it is still considered a member of a controlled group for this purpose.

Question 5 Check the “Yes” box if one foreign person owned at least 25% of (a) the total voting power of all classes of stock of

• A foreign citizen or nonresident alien,

• An individual who is a citizen or resident of a U.S. territory (but who is not a U.S. citizen or resident),

• A foreign partnership,

• A foreign corporation,

• Any foreign estate or trust within the meaning of section 7701(a)(31), and

• A foreign government (or one of its agencies or instrumentalities) to the extent that it is engaged in the conduct of a commercial activity, as described in section

Owner’s country. For individuals, the term “owner’s country” means the country of residence. For all others, it is the country where incorporated, organized, created, or administered.

Requirement to file Form 5472. If the RIC checked “Yes,” it may have to file Form 5472, Information Return of a 25% Foreign Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. Generally, a 25% foreign-owned corporation that had a reportable transaction with a foreign or domestic related party during the tax year must file Form 5472. See Form 5472 for filing instructions.

Item 8

Tax-exempt interest. Show any tax-exempt interest received or accrued. Include any exempt-interest dividends received as a shareholder in a mutual fund or other RIC.

18 Instructions for Form 1120-RIC (2025)

Item 10

Election under section 853(a). A RIC may make an irrevocable election under section 853(a) to allow its shareholders to apply their share of the foreign taxes paid by the RIC either as a credit or a deduction. If the RIC makes this election, the amount of foreign taxes it paid during the tax year may not be taken as a credit or a deduction on Form 1120-RIC, but may be claimed on Form 1120-RIC, Schedule A, line 5, as an addition to the dividends-paid deduction.

Eligibility. To qualify to make the election, the RIC must meet the following requirements.

• More than 50% of the value of the RIC’s total assets at the end of the tax year must consist of stock or securities in foreign corporations.

• The RIC must meet the holding period requirements of section 901(k) with respect to its common and preferred stock. If the RIC fails to meet these holding period requirements, the election that allows a RIC to pass through to its shareholders the foreign tax credits for foreign taxes paid by the RIC is disallowed. Although the foreign taxes paid may not be taken as a credit by either the RIC or the shareholder, they may still be deductible by the RIC.

Election under section 852(g). In the case of a qualified “fund of funds” structure, a RIC may elect to allow shareholders the foreign tax credit without regard to the requirement that more than 50% of the value of its assets consist of stock or securities in foreign corporations. See section 852(g) for more information.

Reporting requirements. To make a valid election under section 853 or 852(g), in addition to timely filing Form 1120-RIC and checking the box for Schedule K, item 10a or b, the RIC must file a statement of election, which includes the information listed under Regulations section 1.853-4(c). The information must be provided on or with a Form 1118, Foreign Tax Credit, attached to the RIC’s timely filed tax return.

For more information, see Regulations section 1.853-4. Notification to shareholders. If the RIC makes the election, it must furnish to its shareholders a written statement reporting the shareholder’s portion of (1) foreign taxes paid by the RIC to foreign countries and territories of the United States, and (2) the dividend that represents income derived from:

• Sources within countries described in section 901(j), and

• Other foreign-source income.

Item 11

Election under section 853A. A RIC can elect to pass through credits from tax credit bonds to its shareholders. If the RIC makes the election, include the interest income from the tax credit bonds on Part I, line 2. Also, increase the dividends paid deduction by the amount of the credits distributed to shareholders. If the RIC makes the election, it is not allowed to take any credits related to the qualified tax credit bonds.

For more information, see section 853A. Notification to shareholders. If the RIC makes the election to apply section 853A, it must furnish to its

shareholders a written statement reporting the shareholder’s proportionate share of (1) credits from tax credit bonds, and (2) gross income in respect of such credits.

Question 13, Business Interest Expense Election The limitation on business interest expense applies to every taxpayer with a trade or business, unless the taxpayer meets certain specified exceptions. A taxpayer may elect out of the limitation for certain businesses otherwise subject to the business interest expense limitation.

Certain real property trades or businesses and farming businesses qualify to make an election not to limit business interest expense. This is an irrevocable election. If you make this election, you are required to use the alternative depreciation system to depreciate any property with a recovery period of 10 years or more. Also, you are not entitled to the special depreciation allowance for that property. For a taxpayer with more than one qualifying business, the election is made with respect to each business.

Check “Yes” if the taxpayer has an election in effect to exclude a real property trade or business or a farming business from section 163(j). For more information, see section 163(j) and the Instructions for Form 8990.

Question 14, Conditions for Filing Form 8990 Generally, a RIC must file Form 8990 to claim a deduction for business interest. In addition, Form 8990 must be filed by any RIC that owns an interest in a partnership with current year, or prior year carryover, excess business interest expense allocated from the partnership. A RIC must also file a Form 8990 if the RIC paid section 163(j) interest dividends for the tax year.

Exclusions from filing. A RIC is not required to file Form 8990 if the RIC is a small business taxpayer that does not have excess business interest expense from a partnership and did not pay section 163(j) interest dividends for the tax year. A RIC is also not required to file Form 8990 if the RIC only has business interest expense from these excepted trades or businesses:

• An electing real property trade or business,

• An electing farming business, or

• Certain utility businesses.

Small business taxpayer. A small business taxpayer is not subject to the business interest expense limitation and is not required to file Form 8990. A small business taxpayer is a taxpayer that (a) is not a tax shelter (as defined in section 448(d)(3)), and (b) meets the gross receipts test of section 448(c), discussed next.

Gross receipts test. For 2025, a taxpayer meets the gross receipts test if the taxpayer has average annual gross receipts of $31 million or less for the 3 prior tax years. A taxpayer’s average annual gross receipts for the 3 prior tax years is determined by adding the gross receipts for the 3 prior tax years and dividing the total by 3.

Gross receipts include the aggregate gross receipts from all persons treated as a single employer, such as a controlled group of corporations, commonly controlled

Instructions for Form 1120-RIC (2025) 19

partnerships, or proprietorships, and affiliated service groups. See section 448(c) and the Instructions for Form 8990 for additional information.

Question 15 If a RIC intends to self-certify as a QOF, the RIC must file Form 1120-RIC and attach Form 8996, even if the RIC had no income or expenses to report. If the RIC is attaching Form 8996, check the “Yes” box for question 15. On the line following the dollar sign, enter the amount from Form 8996, line 15.

The penalty reported on this line from Form 8996, line 15, is not due with the filing of this form. The IRS will separately send to you a notice setting forth the due date for the penalty payment and where that payment should be sent.

Question 16 If the RIC is a member of a controlled group, check the “Yes” box. Complete and attach Schedule O (Form 1120), Consent Plan and Apportionment Schedule for a Controlled Group. See Schedule O (Form 1120) and its instructions for more information.