Part II
Qualification Requirements
Chapter 2
FORMING A DISC
There are nine basic requirements for DISC status. If all nine
requirements are satisfied, a major portion of the corporation's
earnings is eligible for long-term tax deferral under the DISC
program. On the other hand, failure to satisfy one or more of
these requirements causes a loss of DISC status for the taxable
year. The nine requirements are readily satisfied in most situations,
but the rules contain intricate specifications to deal with complex
fact patterns.
The nine basic requirements
are:
1.United States corporate status;1
2.a gross-receipts test;2
3.an assets test;3
4. at least $2,500 in capital;4
5. one class of stock;5
6. election of DISC status;6
1. §992(a)
(1);Reg. § 1.992-1 (a) (1).
2. §992(a)(I)(A);Reg.§1.992-1(a)(2).
3. § 992(a) (1) (8); Reg. § 1.992-1 (a) (3).
4. §992(a)(I)(C);Reg.§1.992-1(a)(4).
5. Id.
6. §992(a) (1) (D); Reg. § 1.992-1 (a) (5).
For
a copy of the entire article please contact:
ExportDISC Management Company
pursuant to Section 993(a)(1)(H) and Section 993(b)(2)
Robert Feinschreiber & Margaret Kent
1121 Crandon Blvd. F301
Key Biscayne, FL 33149
Primary Phone: 305.361.5800
or 305.505.9200
Fax: 305.365.2276
multijur@aol.com
www.ExportDISC.com
www.TransferPricingConsortium.com
www.TaxMalpractice.com
www.ProductionIncentive.com
