Larry Cooper · General ArticlesWhat are the Three Primary Requirements for IC-DISCs?
What is an IC-DISC?
An IC-DISC is a tax-exempt entity that pays no federal tax on commission income. An IC-DISC means a significant tax advantage by converting “ordinary income” taxed at 39.6% federal rate to maximum dividend rate of 23.8% (15.8% rate differential).
What are the requirements?
The property must be manufactured, produced, grown, or extracted in the U.S.
The export property must be held primarily for sale, lease, or rental for direct use, consumption, or disposition outside the U.S.
All export property may have no more than 50% of the value of the final costs attributable to foreign components. The fair market value of the foreign content is determined based on the dutiable value of the foreign components.
For more information on IC-DISC’s and their benefits, please contact Larry Cooper at (231) 726-5840 or lcooper@brickleydelong.com.