What are U.S. Possessions Corporation Returns? In general, to have qualified for the possessions tax credit, a corporation must have been a domestic corporation (organized under the laws of one of the fifty states), and have filed Form 5712, Election to be Treated as a Possessions Corporation under Section 936. Once filed, this election remained in effect for 10 years, unless the taxpayer obtained permission for a revocation from the Internal Revenue Service. Two gross income tests must also have been satisfied. First, the possessions corporation must have derived 80 percent or more of its gross income from sources in a U.S. possession for the corporation’s applicable period, which was generally the shorter of 36 months or the period when the corporation actively conducted a trade or business in a U.S. possession. The second test required the corporation to derive at least 75 percent of its gross income from the active conduct of a trade or business in a U.S. possession. If these gross income tests were satisfied, a U.S. possessions corporation was able to claim the possessions tax credit for that portion of income earned from qualified sources in U.S. possessions. In general, the Possessions Tax Credit was repealed effective for taxable years beginning after December 31, 2005. Thus, no data are available after that date. Metadata by Year of Study 2005
