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Deferred DISC Income - How Does It Work? | TaxConnections
This is one of the most misunderstood provisions in the IC-DISC area. An IC-DISC shareholder is required to pay an interest charge to the IRS on the tax liability related to the deferred DISC income, so this concept is important and, as stated above, greatly misunderstood. The three most misunderstood concepts are i) what is “deferred DISC income at the end of the computation year”, ii) how are the IC-DISC earnings and profits distributed, and iii) in what order are DISC earnings distributed?