Menu

Search

Knowledge Base


15631: IRC 965 - Transition Tax Statement


1040 Individual

How do I make entries related to IRC section 965 in Drake Tax? 

Those who are required to report section 965 amounts must do so using an IRC 965 Transition Tax Statement, by completing the 965 screen. This screen available for Forms 1040, 1065, 1120, and 1120-S.

Those who may be required to report section 965 amounts:

  • A person who is a U.S. shareholder of a deferred foreign income corporation (DFIC),
  • A direct or indirect partner in a domestic partnership that is a U.S. shareholder of a DFIC,
  • A shareholder in an S corporation that is a U.S. shareholder of a DFIC, or
  • An owner or beneficiary of another domestic pass-through entity that is a U.S. shareholder of a DFIC. 

Note: In a 1040, complete the return without making entries on lines 1 through 7 of the transition statement and view the return. The amount on line 63 of Form 1040 must be entered on the line Taxpayer's net tax liability for the taxable year without 965 related amounts before any other entries are made on screen 965

Available elections are also shown on screen 965 below the transition tax form. These are required entries meaning that you must choose either Yes or No in the drop down for each election before leaving the screen. Specific elections vary by return type.

A section 965 election can be made on an extended return or a previously accepted return can be amended using Form 1040-X.

See the following for more information and additional requirements: 


Also In This Category


On a scale of 1-5, please rate the helpfulness of this article


Not Helpful
Very Helpful
Optionally provide private feedback to help us improve this article...

Thank you for your feedback!


Details
Article has been viewed 6.4K times.
Last Modified: Last Month
Article not rated yet.
Options