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Form 1120-FI: 1120-F (Schedule I)
IRS Form 1120-F is used to report the amount of interest expense allocable to effectively connected income (ECI) and the deductible amount of such allocation for the tax year under section 882(c).
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IRS Form 1120-FI - 1120-F (Schedule I)
IRS Form 1120-F is used to report the amount of interest expense allocable to effectively connected income (ECI) and the deductible amount of such allocation for the tax year under section 882(c).
Risk Radar
Scan points- 1Do not mix filing methods; the chosen Step 3 method must be mutually exclusive for the tax year.
- 2Completing lines 16a through 20 if using the AUSBL method, as these steps are mutually exclusive.
- 3Failing to report the summary amounts requested on lines 21 through 25 for all corporations required to file Schedule I.
- 4Including interest expense directly allocable under Regulations section 1.882-5(a)(1)(ii) in reported allocations.
- 5Entering an incorrect portion of U.S.-booked liabilities when filling out Line 9, column (b).
Plain English
This form helps foreign corporations calculate how much of their total interest expense can be legally attributed to income earned within the United States. This calculation determines the specific, allowable deduction for tax purposes.
Submission Date
- Filing date: 2026-01-07 10:10:41
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when all foreign corporations have interest expense allocable to effectively connected income (ECI) under section 882(c).
- Do not use it when the allocation is otherwise deferred or permanently disallowed under other sections of the Internal Revenue Code, such as sections 163(e), 163(j), 263A, 265(a), and 267(a)(3).
- Check Form 1120-F instead when completing the full corporate return that incorporates this schedule's data.
Form selector
Use this form or another form?
Need to report U.S.-booked liabilities under Regulations section 1.882-5(d)(2)
Schedule L reports the set(s) of books that give rise to these liabilities and are also required by foreign banks on Schedule M-3.
✓ Verify the specific requirement for using Schedule L vs. reporting worldwide assets.
Need to report assets/liabilities not giving rise to effectively connected income (ECI)
The set(s) of books reflecting non-ECI assets and liabilities are used to complete Form 1120-F, Schedule L.
✓ Confirm if reporting worldwide assets on Schedule L is appropriate instead.
Need to report the required summary amounts for all corporations filing this schedule
All corporations required to file Schedule I must report the summary amounts requested on lines 21 through 25 of Form 1120-F.
✓ Ensure that the selected method (Adjusted U.S. booked liabilities or Separate currency pools) is used for the corresponding lines.
Deadline or filing window
Not stated in the official source.
Checklist
What you need before filling it out
Purpose of Schedule I (Form 1120-F)
Report amount of interest expense allocable to ECI and deductible amount under section 882(c) · Instructions p.1
Required filers
All foreign corporations with interest expense allocable to ECI under section 882(c) · Instructions p.1
Reporting on Form 1120-F, Section III, Part II
Line 7b must receive interest expense from Schedule I, line 24g; Line 7c must receive allocation under Regulations section 1.882-5 reportable on Schedule I, line 23 · Instructions p.2 / Form p.1
U.S. Assets Reporting
Enter U.S. dollar value of average U.S. assets in the appropriate column (a) through (d) or attached sheets · Instructions p.8 / Form p.1
Method Selection
Complete lines 1–15 and 21–25 for Adjusted U.S. booked liabilities OR complete lines 1–9 and 16a–25 for Separate currency pools · Instructions p.3 / Form p.1
Before you submit
- 1Confirm the calculation method: Determine if the Adjusted U.S. booked liabilities or the Separate currency pools method applies, and complete only the corresponding set of lines.
- 2For U.S. Assets reported in more than four currencies not subject to a 3% election, attach separate sheets using the required format for additional currencies.
- 3On line 20, column (d), calculate the total results by summing all separate currency allocations from attached sheets and line 19 totals.
- 4Enter U.S. dollar values for average U.S. assets in lines 1 through 15 (or appropriate lines if using Separate currency pools).
- 5Record the allocation amount on Schedule I, line 23.
- 6Report the final interest expense from Schedule I, line 24g to Form 1120-F, Section III, Part II, line 7b.
- 7Report the allocation under Regulations section 1.882-5 reportable on Schedule I, line 23 to Form 1120-F, Section III, Part II, line 7c.
How to file this form
- 1Determine if the foreign corporation has interest expense allocable to ECI under section 882(c) and select the appropriate calculation method for completing Schedule I.
- 2Calculate all separate currency allocations and report the total results on line 20, column (d), ensuring any attached sheets are included in this calculation.
- 3Complete the necessary reporting fields: record the allocation amount on Schedule I, line 23, and document interest expense on line 24g.
- 4Transfer key figures to Form 1120-F, Section III, Part II (specifically line 7b for interest expense from line 24g, and line 7c for the allocation amount).
- 5Attach Schedule I (Form 1120-F) to Form 1120-F and retain all copies of the filed return for recordkeeping.
Known limitations
- 1A foreign corporation does not need to file Schedule I (Form 1120-F) if it has no trade or business within the United States.
- 2A foreign corporation is exempt from filing Schedule I (Form 1120-F) if it has no worldwide interest expense for the tax year to allocate under Regulations section 1.882-5.
- 3A foreign corporation may be exempt from filing Schedule I (Form 1120-F) if it conducts limited activities in the United States that the corporation determines do not generate ECI or a U.S. permanent establishment, and the corporation files a protective income tax return under Regulations section 1.882-4(a)(3)(vi).
Field map
Compact field-by-field guide
Entity Info
2 items
Full legal name of the corporation and its Employer Identification Number.
Current mailing address and date of incorporation.
Income
3 items
Total revenue from business operations before deducting costs.
Direct costs attributable to producing goods sold by the corporation.
Gross receipts minus cost of goods sold and returns/allowances.
Deductions
1 items
Sum of all business expenses including compensation, rent, interest, taxes, and depreciation.
Tax
2 items
Total income minus total deductions.
Tax calculated on taxable income using the applicable corporate tax rate, minus any credits.
Signatures
1 items
An authorized corporate officer must sign and date the return.
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Fillable formOpen in Editor->The source directs filers to IRS.gov/Form1120F for the latest information about Schedule I (Form 1120-F) and its instructions.
What changed or needs a fresh check
- Edition date — Not stated in the official source.
- Fee — Not stated in the official source.
- Mailing address — Not stated in the official source.
- Signature requirement — Not stated in the official source.
Quick Facts
Downloads
After you file
- 1The information reported on Schedule I (Form 1120-F) is needed to complete Form 1120-F, Section III (the determination of the branch-level interest tax under section 884(f)).
- 2Foreign corporations must also complete and attach Form 8833, Treaty-Based Return Position Disclosure.
- 3When reporting assets and liabilities on Schedule L, include the third party U.S. set(s) of books of the foreign corporation if those books give rise to income effectively connected with the corporation's trade or business within the United States and to U.S.-booked liabilities.
- 4The general rules for filing interest expense are found in Form 8990, unless an exception is met.
Sources
- SRCInstructions p.1 — Purpose of Schedule I (Form 1120-F) is to report the amount of interest expense allocable to effectively connected income (ECI) and the deductible amount of such allocation for the tax year under section 882(c).
- SRCInstructions p.1 — All foreign corporations that have interest expense allocable to ECI must complete Schedule I (Form 1120-F), regardless of whether the amount is deductible or otherwise deferred.
- SRCInstructions p.1 — A foreign corporation is not required to file Schedule I (Form 1120-F) if it does not have a trade or business within the United States, has no worldwide interest expense for the tax year to allocate under Regulations section 1.882-5, or conducts limited activities in the United States that meet specific criteria.
- SRCInstructions p.2 — Assets and liabilities reported on Schedule L are generally total assets and liabilities reflected on the set(s) of books giving rise to income effectively connected with the corporation's trade or business within the United States and to U.S.-booked liabilities.
- SRCInstructions p.3 — AUSBL method filers must complete lines 1 through 15 and lines 21 through 25, but not lines 16a through 20.
- SRCInstructions p.4 — The result on line 4, column (a) of Schedule I (Form 1120-F) constitutes the total net adjustment to the average book.
- SRCInstructions p.6 — All direct interest expense allocations to ECI are reported on line 22 of Schedule I (Form 1120-F).
- SRCForm p.1 — Column (b) for line 9 requires entering the total from Schedule P, line 8.
- SRCNot stated in the official source — filing deadline is ...
- SRCNot stated in the official source — tax rates are ...
Common confusion points
Does 'interest expense allocable to ECI' mean all of my interest costs?
No; Schedule I (Form 1120-F) reports only the amount of interest expense that can be allocated to effectively connected income (ECI).
Do I have to file even if I think my allocation won't be deductible this year?
Yes, all foreign corporations that have interest expense allocable to ECI must complete Schedule I (Form 1120-F), regardless of whether the amount is deductible or otherwise deferred.
Which method do I use for reporting assets and liabilities on Schedule L?
The choice depends on filing methods: AUSBL filers complete lines 1 through 15 and lines 21 through 25, while Separate Currency Pools method filers complete lines 1 through 9 and lines 16a through 25.
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Questions about IRS Form 1120-FI
What is IRS Form 1120-FI used for?
This form helps foreign corporations calculate how much of their total interest expense can be legally attributed to income earned within the United States. This calculation determines the specific, allowable deduction for tax purposes.
Who must file IRS Form 1120-FI?
All foreign corporations that have interest expense allocable to ECI under section 882(c) must complete Form 1120-F, Schedule I.
What information does IRS Form 1120-FI require?
The form collects details on the amount of interest expense allocation reportable on Schedule I, line 23. It also reports amounts subject to deferral and disallowance in columns (b), (c), and (e) of Schedule M-3 (Form 1120-F), Part III, line 26c.
How do I complete IRS Form 1120-FI?
Filers must first determine if they use the AUSBL or Separate currency pools method and complete all columns accordingly. The final summary amounts are reported on lines 21 through 25, which summarize interest expense allocation and deduction under Regulations section 1.882-5.
What happens if IRS Form 1120-FI is filed incorrectly?
The instructions do not specify a penalty for filing Form 1120-F, Schedule I incorrectly.
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