Form 8816 (Rev. 9-2018)
Part I. Special Loss Discount
Accident year. Enter the four-digit
accident year in the space provided at the
top of each column. For example, enter
accident year 2018 as 2018.
The computation for the SLDA in Part I,
lines 1, 2, and 3 is no longer applicable.
Part II. Special Loss Discount
Keep a separate SLDA for each accident
year for which an additional deduction
under section 847 is claimed. Do not net
amounts from one year against amounts
from another year.
Line 4. Enter the balance in the SLDA at
the beginning of the year for which this
return is filed.
Line 5. Section 847 has been repealed. No
entry is made on line 5.
Line 6. Enter on this line and on Form
1120-PC, Schedule A, line 12; Form
1120-L, page 1, line 6; or Form 1120, page
1, line 10, amounts that are required to be
removed from the SLDA and included in
income. Section 847 was repealed, so the
entire balance in the SLDA account is
included in income. Line 6 must equal line
4. See section 847(5) prior to its
amendment by the TCJA for details.
Line 7. Line 7 must be zero.
Part III. Special Estimated Tax
Use Part III to reconcile the corporation’s
SETPs for each tax year it has made a
section 847 election.
Section 847(8) (tax benefit determination)
requires that if a taxpayer carries back net
operating losses or capital losses that arise
in years after a year in which a section 847
deduction was claimed, the taxpayer must
recompute the tax benefit attributable to
the previously claimed section 847
deduction taking into account the loss
carrybacks. Tax benefits also include those
derived from filing a consolidated return
with another insurance company (without
regard to section 1503(c)).
Therefore, if this recomputation changes
the amount of the section 847 tax benefit,
the taxpayer must provide a computation
schedule and attach it to Form 8816.
Line 8. The amount entered on this line
should be the same as the ending balance
for this account for the year immediately
preceding this year. If the amounts are
different, attach an explanation.
Line 9. Section 847 has been repealed. No
entry is made on line 9.
Line 10. Prior section 847 payments
transferred to the current year are no
longer applicable since section 847 has
been repealed. No entry is made on line 10.
Line 11. Enter the total payments applied
to pay additional tax due as a result of
including in income amounts required by
the repeal of section 847. The total of the
amount(s) on line 11 must agree with the
amount on Form 1120-PC, page 1, line
15b, or Form 1120-L, page 1, line 28b. For
purposes of Form 1120, this amount is
included on Form 1120, Schedule J,
Part III, line 14.
Line 12. To the extent that an SETP is not
used to offset additional tax due (that is, to
the extent there is a balance on line 12),
that SETP shall be treated as an estimated
tax payment made under section 6655.
Enter these amounts on Form 1120-PC,
page 1, line 15c, or Form 1120-L, page 1,
line 28c. For purposes of Form 1120, this
amount is included on Form 1120,
Schedule J, Part III, line 14.
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confidential, as required by section 6103.
The time needed to complete and file
this form will vary depending on individual
circumstances. The estimated burden for
business taxpayers filing this form is
approved under OMB control number
1545-0123 and is included in the estimates
shown in the instructions for their business
income tax return.
If you have any comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler, we
would be happy to hear from you. See the
instructions for Form 1120-PC, Form 1120-L,
or Form 1120.