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                                                                                                              Department of the Treasury
                                                                                                              Internal Revenue Service
2023

Instructions for Form 1120

U.S. Corporation Income Tax Return

Section references are to the Internal Revenue Code unless 
otherwise noted.                                                               Future Developments
Contents                                                                  Page For the latest information about developments related to Form 
Future Developments         . . . . . . . . . . . . . . . . . . . . . . . . 1  1120 and its instructions, such as legislation enacted after they 
                                                                               were published, go to IRS.gov/Form1120.
What’s New    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Photographs of Missing Children . . . . . . . . . . . . . . . .             1
                                                                               What’s New
The Taxpayer Advocate Service . . . . . . . . . . . . . . . . .             2
Direct Deposit of Refund . . . . . . . . . . . . . . . . . . . . . .        2  Increase in penalty for failure to file.  For tax returns required 
                                                                               to be filed in 2024, the minimum penalty for failure to file a return 
How To Make a Contribution To Reduce Debt Held                                 that is more than 60 days late has increased to the smaller of the 
by the Public         . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  tax due or $485. See Late filing of return, later.
How To Get Forms and Publications . . . . . . . . . . . . . .               2
                                                                               Electronically filed returns.  The electronic-filing threshold for 
General Instructions      . . . . . . . . . . . . . . . . . . . . . . . . . 2  corporate returns required to be filed on or after January 1, 2024, 
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2  has decreased to 10 or more returns. See Electronic Filing, later.
Who Must File     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  Deduction for certain energy efficient commercial building 
When To File    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  property.  For tax years beginning in 2023, corporations filing 
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4  Form 1120 and claiming the energy efficient commercial 
                                                                               buildings deduction should report the deduction on line 25. See 
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4  the instructions for line 25.
Paid Preparer Authorization . . . . . . . . . . . . . . . . . . . .         4
                                                                               Expiration of 100% business meal expense deduction.            The 
Assembling the Return         . . . . . . . . . . . . . . . . . . . . . . . 5  temporary 100% business meal expenses deduction for food 
Tax Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5  and beverages provided by a restaurant does not apply to 
Estimated Tax Payments . . . . . . . . . . . . . . . . . . . . . .          5  amounts paid or incurred after 2022.
Interest and Penalties      . . . . . . . . . . . . . . . . . . . . . . . . 6  Corporate alternative minimum tax (CAMT).         For tax years 
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . .        6  beginning after 2022, certain corporations must determine 
                                                                               whether they are subject to the new CAMT and calculate CAMT 
Accounting Period       . . . . . . . . . . . . . . . . . . . . . . . . . . 7  if applicable. See the instructions for Schedule J, line 3. Also, 
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . . .           7  see new Schedule K, Question 29.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7  Elective payment election.   Applicable entities and electing 
Other Forms and Statements That May Be                                         taxpayers can elect to treat certain credits as elective payments. 
Required        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7  Resulting overpayment may result in refunds. See the 
Specific Instructions     . . . . . . . . . . . . . . . . . . . . . . . . . 8  instructions for Schedule J, Part II, line 22. Also, see the 
                                                                               Instructions for Form 3800.
Period Covered      . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Name and Address . . . . . . . . . . . . . . . . . . . . . . . . . .        8  Relief from additions to tax for underpayments applicable 
                                                                               to the new corporate alternative minimum tax.     For tax year 
Identifying Information . . . . . . . . . . . . . . . . . . . . . . . .     8  2023, the IRS will waive the penalty for failure to make estimated 
Employer Identification Number (EIN) . . . . . . . . . . . . .              9  tax payments for taxes attributable to a CAMT liability. Affected 
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9  corporations must still file the 2023 Form 2220, even if they owe 
Initial Return, Final Return, Name Change, or                                  no estimated tax penalty. However, affected corporations may 
                                                                               exclude the CAMT tax liability when calculating the required 
Address Change            . . . . . . . . . . . . . . . . . . . . . . . . . 9  annual payment on Form 2220. Affected corporations must also 
Income  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10 include an amount of estimated tax penalty on line 34 of Form 
Deductions    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11 1120 (or other appropriate line of the corporation's income tax 
Schedule C. Dividends, Inclusions, and Special                                 return), even if that amount is zero. Failure to follow these 
Deductions          . . . . . . . . . . . . . . . . . . . . . . . . . . .   18 instructions could result in affected corporations receiving a 
                                                                               penalty notice that will require an abatement request to apply the 
Schedule J. Tax Computation and Payment                     . . . . . . .   20 relief provided by Notice 2023-42. See Notice 2023-42, 2023-26 
Schedule K. Other Information . . . . . . . . . . . . . . . . .             22 I.R.B. 1085, available at IRS.gov/irb/
Schedule L. Balance Sheets per Books                  . . . . . . . . . .   26 2023-26_IRB#NOT-2023-42. Also, see the instructions for 
                                                                               line 34.
Schedule M-1. Reconciliation of Income (Loss) per 
Books With Income per Return                    . . . . . . . . . . . . .   27 Photographs of
Schedule M-2. Analysis of Unappropriated 
Retained Earnings per Books                   . . . . . . . . . . . . . .   27 Missing Children
Principal Business Activity Codes             . . . . . . . . . . . . . .   29 The Internal Revenue Service is a proud partner with the 
                                                                               National Center for Missing & Exploited Children® (NCMEC). 
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Photographs of missing children selected by the Center may 

Jan 17, 2024                                                              Cat. No. 11455T

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appear in instructions on pages that would otherwise be blank. • Search publications online by topic or keyword;
You can help bring these children home by looking at the • View Internal Revenue Bulletins (IRBs) published in recent
photographs and calling 1-800-THE-LOST (1-800-843-5678) if years; and
you recognize a child. • Sign up to receive local and national tax news by email.
The Taxpayer Advocate Service Tax forms and publications. The corporation can view, print,
or download all of the forms and publications it may need on
The Taxpayer Advocate Service (TAS) is an independent IRS.gov/FormsPubs. Otherwise, the corporation can go to
organization within the IRS that helps taxpayers and protects IRS.gov/OrderForms to place an order and have forms mailed to
taxpayer rights. TAS's job is to ensure that every taxpayer is it.
treated fairly and knows and understands their rights under the
Taxpayer Bill of Rights.
As a taxpayer, the corporation has rights that the IRS must General Instructions
abide by in its dealings with the corporation. TAS can help the
corporation if: Purpose of Form
• A problem is causing financial difficulty for the business; Use Form 1120, U.S. Corporation Income Tax Return, to report
• The business is facing an immediate threat of adverse action; the income, gains, losses, deductions, credits, and to figure the
or income tax liability of a corporation.
• The corporation has tried repeatedly to contact the IRS but no
one has responded, or the IRS hasn't responded by the date Who Must File
promised. Unless exempt under section 501, all domestic corporations
TAS has offices in every state, the District of Columbia, and (including corporations in bankruptcy) must file an income tax
Puerto Rico. Local advocates' numbers are in their local return whether or not they have taxable income. Domestic
directories and at TaxpayerAdvocate.IRS.gov. The corporation corporations must file Form 1120, unless they are required, or
can also call TAS at 877-777-4778. elect to file a special return. See Special Returns for Certain
Organizations, later.
TAS also works to resolve large-scale or systemic problems Entities electing to be taxed as corporations. A domestic
that affect many taxpayers. If the corporation knows of one of entity electing to be classified as an association taxable as a
these broad issues, please report it to TAS through the Systemic corporation must file Form 1120, unless it is required to or elects
Advocacy Management System at IRS.gov/SAMS. to file a special return listed under Special Returns for Certain
For more information, go to IRS.gov/Advocate. Organizations. The entity must also file Form 8832, Entity
Classification Election, and attach a copy of Form 8832 to Form
Direct Deposit of Refund 1120 (or the applicable return) for the year of the election. For
To request a direct deposit of the corporation's income tax refund more information, see Form 8832 and its instructions.
into an account at a U.S. bank or other financial institution, attach Limited liability companies (LLC). If an entity with more than
Form 8050, Direct Deposit of Corporate Tax Refund. See the one owner was formed as an LLC under state law, it is generally
instructions for line 37. treated as a partnership for federal income tax purposes and
files Form 1065, U.S. Return of Partnership Income. Generally, a
How To Make a Contribution To single-member LLC is disregarded as an entity separate from its
Reduce Debt Held by the Public owner and reports its income and deductions on its owner's
federal income tax return. The LLC can file a Form 1120 only if it
To help reduce debt held by the public, make a check payable to has filed Form 8832 to elect to be treated as an association
“Bureau of the Fiscal Service.” Send it to: taxable as a corporation. For more information about LLCs, see
Bureau of the Fiscal Service Pub. 3402, Taxation of Limited Liability Companies.
Attn: Dept G Corporations engaged in farming. A corporation (other than
P.O. Box 2188 a corporation that is a subchapter T cooperative) that engages in
Parkersburg, WV 26106-2188 farming should use Form 1120 to report the income (loss) from
such activities. Enter the income and deductions of the
Or, enclose the check with the corporation's income tax return. In corporation according to the instructions for lines 1 through 10
the memo section of the check, make a note that it is a gift to and 12 through 29.
reduce the debt held by the public. For information on how to Ownership interest in a Financial Asset Securitization In-
make this type of contribution online, go to vestment Trust (FASIT). Special rules apply to a FASIT in
www.treasurydirect.gov and click on “How to Make a existence on October 22, 2004, to the extent that regular
Contribution to Reduce the Debt.” interests issued by the FASIT before October 22, 2004, continue
Do not add the contributions to any tax the corporation may to remain outstanding in accordance with their original terms.
owe. See the instructions for line 35 for details on how to pay any If a corporation holds an ownership interest in a FASIT to
tax the corporation owes. Contributions to reduce debt held by which these special rules apply, it must report all items of
the public are deductible subject to the rules and limitations for income, gain, deductions, losses, and credits on the
charitable contributions. corporation's income tax return (except as provided in section
860H). Show a breakdown of the items on an attached
How To Get Forms statement. For more information, see sections 860H and 860L
(repealed with certain exceptions).
and Publications
Foreign-owned domestic disregarded entities. If a foreign
Internet. You can access the IRS website 24 hours a day, 7 person, including a foreign corporation, wholly owns a domestic
days a week, at IRS.gov to: disregarded entity (DE), the domestic DE is treated as a
• Download forms, instructions, and publications; domestic corporation separate from its owner (the foreign
• Order IRS products online; corporation) for the limited purposes of the requirements under
• Research your tax questions online;

2 Instructions for Form 1120

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section 6038A that apply to 25% foreign-owned domestic 
corporations. While a DE is not required to file a U.S. income tax               Regulated investment company                             1120-RIC
return, a DE covered by these rules is required to file a pro forma              (section 851)
Form 1120 with Form 5472 attached by the due date (including                     S corporation (section 1361)                                 1120-S
extensions) of the return. See the Instructions for Form 5472 for 
additional information and coordination with Form 5472 reporting                 Settlement fund                                          1120-SF
by the domestic DE.                                                              (section 468B)
Qualified opportunity fund.           To certify as a qualified 
opportunity fund (QOF), the corporation must file Form 1120 and 
attach Form 8996, even if the corporation had no income or                       Electronic Filing
expenses to report. See Schedule K, Question 25, later. Also,                    Corporations can generally electronically file (e-file) Form 1120, 
see the Instructions for Form 8996.                                              related forms, schedules, and attachments; Form 7004 
                                                                                 (automatic extension of time to file); and Forms 940, 941, and 
Qualified opportunity investment.          If the corporation held a             944 (employment tax returns). If there is a balance due, the 
qualified investment in a QOF at any time during the year, the                   corporation can authorize an electronic funds withdrawal while 
corporation must file its return with Form 8997 attached. See the                e-filing. Form 1099 and other information returns can also be 
instructions for Form 8997.                                                      electronically filed. The option to e-file does not, however, apply 
                                                                                 to certain returns.
Special Returns for
Certain Organizations                                                               For returns filed on or after January 1, 2024, corporations that 
                                                                                 file 10 or more returns are required to e-file Form 1120. See 
                                                                                 Regulations section 301.6011-5. However, these corporations 
Instead of filing Form 1120, certain organizations, as shown below, file special can request a waiver of the electronic filing requirements.
returns.
     If the organization is a:                                  File Form           For more information on e-filing, see E-file for Business and 
                 ▼                                                   ▼           Self-employed Taxpayers on IRS.gov.

Exempt organization with unrelated                              990-T            Exclusions From Electronic Filing
trade or business income
                                                                                 Waivers. The IRS may waive the electronic filing rules if the 
Religious or apostolic organization                             1065             corporation demonstrates that a hardship would result if it were 
exempt under section 501(d)                                                      required to file its return electronically. A corporation interested in 
                                                                                 requesting a waiver of the mandatory electronic filing 
Entity formed as a limited liability                                             requirement must file a written request, and request one in the 
company under state law and treated                             1065             manner prescribed by the IRS. All written requests for waivers 
as a partnership for federal income tax 
purposes                                                                         should be mailed to:
                                                                                    Internal Revenue Service
(including a farmers' cooperative)
Subchapter T cooperative association                            1120-C              Ogden Submission Processing Center
                                                                                    Attn: Form 1120 e-file Waiver Request
Entity that elects to be treated as a real                                          Mail Stop 1057
estate mortgage investment conduit                              1066                Ogden, UT 84201
(REMIC) under section 860D
                                                                                 If using a delivery service, requests for waivers should be mailed 
sales corporation (section 992)
Interest charge domestic international         1120-IC-DISC                      to:
Foreign corporation (other than life or                                             Internal Revenue Service
property and casualty insurance                                 1120-F              Ogden Submission Processing Center
company filing Form 1120-L or Form                                                  Attn: Form 1120 e-file Waiver Request
1120-PC)                                                                            Mail Stop 1057
Foreign sales corporation (section 922)                         1120-FSC            1973 N. Rulon White Blvd.
                                                                                    Ogden, UT 84404
Condominium management, 
residential real estate management, or                                           Waiver requests can also be faxed to 877-477-0575. Contact the 
timeshare association that elects to be                         1120-H           e-Help Desk at 866-255-0654 for questions regarding the waiver 
treated as a homeowners association                                              procedures or process.
under section 528
                                                                                 Exemptions.     The IRS may provide exemptions from the 
Life insurance company                                          1120-L           requirements to electronically file. If using the technology 
(section 801)                                                                    required to electronically file conflicts with religious beliefs, the 
                                                                                 corporation is exempt from the requirement. Clearly indicate the 
Fund set up to pay for nuclear                                  1120-ND          exemption on the corporation’s return. Write "Religious 
decommissioning costs (section 468A)
                                                                                 Exemption" at the top of Form 1120. File the corporation's return 
Property and casualty insurance                                                  at the applicable IRS address. See Where To File, later. For 
company                                                         1120-PC          more information see Notice 2024-18.
(section 831)
                                                                                 When To File
Political organization                                          1120-POL         Generally, a corporation must file its income tax return by the 
(section 527)
                                                                                 15th day of the 4th month after the end of its tax year. A new 
Real estate investment trust (section                           1120-REIT        corporation filing a short-period return must generally file by the 
856)                                                                             15th day of the 4th month after the short period ends. A 
Instructions for Form 1120                                                                                                                             3

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Where To File
File the corporation's return at the applicable IRS address listed below.

If the corporation's principal business,        And the total assets at the end of 
office, or agency is located in:                the tax year are:                  Use the following address:
Connecticut, Delaware, District of Columbia,       Less than $10 million and       Department of the Treasury
Georgia, Illinois, Indiana, Kentucky, Maine,       Schedule M-3 is not filed       Internal Revenue Service Center
Maryland, Massachusetts, Michigan, New                                             Kansas City, MO 64999-0012 
Hampshire, New Jersey, New York, North             $10 million or more, or         Department of the Treasury
Carolina, Ohio, Pennsylvania, Rhode Island,        less than $10 million and       Internal Revenue Service Center
South Carolina, Tennessee, Vermont, Virginia,      Schedule M-3 is filed           Ogden, UT 84201-0012
West Virginia, Wisconsin
Alabama, Alaska, Arizona, Arkansas, California, 
Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, 
                                                                                   Department of the Treasury
Louisiana, Minnesota, Mississippi, Missouri, 
                                                         Any amount                Internal Revenue Service Center
Montana, Nebraska, Nevada, New Mexico, 
                                                                                   Ogden, UT 84201-0012
North Dakota, Oklahoma, Oregon, South 
Dakota, Texas, Utah, Washington, Wyoming
A foreign country or U.S. territory                                                Internal Revenue Service Center
                                                         Any amount                P.O. Box 409101
                                                                                   Ogden, UT 84409
A group of corporations with members located in more than one service center area will often keep all the books and records at the principal office of 
the managing corporation. In this case, the tax returns of the corporations may be filed with the service center for the area in which the principal 
office of the managing corporation is located.

corporation that has dissolved must generally file by the 15th day   the corporate officer. Returns and forms signed by a receiver or 
of the 4th month after the date it dissolved.                        trustee in bankruptcy on behalf of a corporation must be 
   However, a corporation with a fiscal tax year ending June 30      accompanied by a copy of the order or instructions of the court 
must file by the 15th day of the 3rd month after the end of its tax  authorizing signing of the return or form.
year. A corporation with a short tax year ending anytime in June     Paid Preparer Use Only section.   If an employee of the 
will be treated as if the short year ended on June 30, and must      corporation completes Form 1120, the paid preparer section 
file by the 15th day of the 3rd month after the end of its tax year. should remain blank. Anyone who prepares Form 1120 but does 
   If the due date falls on a Saturday, Sunday, or legal holiday,    not charge the corporation should not complete that section. 
the corporation can file on the next business day.                   Generally, anyone who is paid to prepare the return must sign 
                                                                     and complete the section.
Private Delivery Services                                                The paid preparer must complete the required preparer 
Corporations can use certain private delivery services (PDS)         information and:
designated by the IRS to meet the “timely mailing as timely filing”  •   Sign the return in the space provided for the preparer's 
rule for tax returns. Go to IRS.gov/PDS.                             signature,
   The PDS can tell you how to get written proof of the mailing      •   Include their Preparer Tax Identification Number (PTIN), and
date.                                                                •   Give a copy of the return to the taxpayer.
   For the IRS mailing address to use if you’re using a PDS, go              A paid preparer may sign original or amended returns by 
to IRS.gov/PDSstreetAddresses.                                           TIP rubber stamp, mechanical device, or computer software 
                                                                             program.
        Private delivery services can't deliver items to P.O. 
   !    boxes. You must use the U.S. Postal Service to mail any      Paid Preparer Authorization
CAUTION item to an IRS P.O. box address.
                                                                     If the corporation wants to allow the IRS to discuss its 2023 tax 
                                                                     return with the paid preparer who signed it, check the “Yes” box 
Extension of Time To File                                            in the signature area of the return. This authorization applies only 
File Form 7004, Application for Automatic Extension of Time To       to the individual whose signature appears in the “Paid Preparer 
File Certain Business Income Tax, Information, and Other             Use Only” section of the return. It does not apply to the firm, if 
Returns, to request an extension of time to file. Generally, the     any, shown in that section.
corporation must file Form 7004 by the regular due date of the 
return. See the Instructions for Form 7004.                              If the “Yes” box is checked, the corporation is authorizing the 
                                                                     IRS to call the paid preparer to answer any questions that may 
Who Must Sign                                                        arise during the processing of its return. The corporation is also 
                                                                     authorizing the paid preparer to:
The return must be signed and dated by:
•  The president, vice president, treasurer, assistant treasurer,    •   Give the IRS any information that is missing from the return;
chief accounting officer; or                                         •   Call the IRS for information about the processing of the return 
                                                                     or the status of any related refund or payment(s); and
•  Any other corporate officer (such as tax officer) authorized to 
sign.                                                                •   Respond to certain IRS notices about math errors, offsets, 
                                                                     and return preparation.
   If a return is filed on behalf of a corporation by a receiver, 
trustee, or assignee, the fiduciary must sign the return, instead of 

4                                                                                                      Instructions for Form 1120

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The corporation is not authorizing the paid preparer to receive and corporate income tax). Generally, electronic funds transfers
any refund check, bind the corporation to anything (including any are made using the Electronic Federal Tax Payment System
additional tax liability), or otherwise represent the corporation (EFTPS). However, if the corporation does not want to use
before the IRS. EFTPS, it can arrange for its tax professional, financial
institution, payroll service, or other trusted third party to make
The authorization will automatically end no later than the due deposits on its behalf. Also, it may arrange for its financial
date (excluding extensions) for filing the corporation's 2024 tax institution to submit a same-day payment (discussed below) on
return. If the corporation wants to expand the paid preparer's its behalf. EFTPS is a free service provided by the Department of
authorization or revoke the authorization before it ends, see Pub. the Treasury. Services provided by a tax professional, financial
947, Practice Before the IRS and Power of Attorney. institution, payroll service, or other third party may have a fee.
Assembling the Return To get more information about EFTPS or to enroll in EFTPS,
To ensure that the corporation's tax return is correctly processed, visit EFTPS.gov or call 800-555-4477. To contact EFTPS using
attach all schedules and other forms after page 6 of Form 1120 the Telecommunications Relay Services (TRS), for people who
in the following order. are deaf, hard of hearing, or have a speech disability, dial 711
and provide the TRS assistant the 800-555-4477 number above
1. Schedule N (Form 1120). or 800-733-4829.
2. Schedule D (Form 1120).
Depositing on time. For any deposit made by EFTPS to be on
3. Form 4797. time, the corporation must submit the deposit by 8 p.m. Eastern
4. Form 8949. time the day before the date the deposit is due. If the corporation
5. Form 8996. uses a third party to make deposits on its behalf, they may have
different cutoff times.
6. Form 4626.
7. Form 8050. Same-day wire payment option. If the corporation fails to
submit a deposit transaction on EFTPS by 8 p.m. Eastern time
8. Form 1125-A. the day before the date a deposit is due, it can still make its
9. Form 4136. deposit on time by using the Federal Tax Collection Service
10. Form 8978. (FTCS). To use the same-day wire payment method, the
corporation will need to make arrangements with its financial
11. Form 965-B. institution ahead of time regarding availability, deadlines, and
12. Form 8941. costs. Financial institutions may charge a fee for payments made
13. Form 3800. this way. To learn more about the information the corporation will
14. Form 8997. need to provide to its financial institution to make a same-day
wire payment, go to IRS.gov/SameDayWire.
15. Form 6252.
16. Form 8936, Schedule A. Estimated Tax Payments
17. Additional schedules in alphabetical order.
18. Additional forms in numerical order. Generally, the following rules apply to the corporation's
payments of estimated tax.
19. Supporting statements and attachments. The corporation must make installment payments of
•
Complete every applicable entry space on Form 1120. Do not estimated tax if it expects its total tax for the year (less applicable
enter “See Attached” or “Available Upon Request” instead of credits) to be $500 or more.
completing the entry spaces. If more space is needed on the • The installments are due by the 15th day of the 4th, 6th, 9th,
forms or schedules, attach separate sheets using the same size and 12th months of the tax year. If any date falls on a Saturday,
and format as the printed forms. Sunday, or legal holiday, the installment is due on the next
regular business day.
If there are supporting statements and attachments, arrange • The corporation must use electronic funds transfer to make
them in the same order as the schedules or forms they support installment payments of estimated tax.
and attach them last. Show the totals on the printed forms. Enter • If, after the corporation figures and deposits estimated tax, it
the corporation's name and EIN on each supporting statement or finds that its tax liability for the year will be more or less than
attachment. originally estimated, it may have to refigure its required
installments. If earlier installments were underpaid, the
Note. If the corporation had tax withheld under Chapter 3 or 4 of corporation may owe a penalty. See Estimated tax penalty
the Internal Revenue Code and received a Form 1042-S, Form below.
8805, or Form 8288-A showing the amount of income tax • If the corporation overpaid estimated tax, it may be able to get
withheld, attach such form(s) to the corporation’s income tax a quick refund by filing Form 4466, Corporation Application for
return to claim a withholding credit. The corporation should Quick Refund of Overpayment of Estimated Tax. See the
report the tax withheld on Schedule J, Part II, line 20z. See the instructions for Schedule J, Part II, line 15.
instructions for Schedule J, Part II, Line 20z.
See section 6655 and Pub. 542, Corporations, for more
Tax Payments information on how to figure estimated taxes.
Generally, the corporation must pay any tax due in full no later Estimated tax penalty. A corporation that does not make
than the due date for filing its tax return (not including estimated tax payments when due may be subject to an
extensions). See the instructions for line 35. If the due date falls underpayment penalty for the period of underpayment.
on a Saturday, Sunday, or legal holiday, the payment is due on Generally, a corporation is subject to the penalty if its tax liability
the next day that isn't a Saturday, Sunday, or legal holiday. is $500 or more and it did not timely pay at least the smaller of:
• Its tax liability for the current year, or
Electronic Deposit Requirement Its prior year's tax.
•
Corporations must use electronic funds transfer to make all
federal tax deposits (such as deposits of employment, excise,
Instructions for Form 1120 5

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Use Form 2220, Underpayment of Estimated Tax by cases, the method used must clearly show taxable income.
Corporations, to see if the corporation owes a penalty and to Permissible methods include cash, accrual, or any other method
figure the amount of the penalty. If Form 2220 is completed, authorized by the Internal Revenue Code.
enter the penalty on line 34. See the instructions for line 34. Also
see Relief from additions to tax for underpayments applicable to Generally, the following rules apply. For more information, see
the new corporate alternative minimum tax (CAMT), earlier. Pub. 538, Accounting Periods and Methods.
• A corporation, or a partnership that has a corporation as a
Interest and Penalties partner, cannot use the cash method of accounting unless it is a
small business taxpayer (defined later). A tax shelter (defined in
If the corporation receives a notice about penalties after section 448(d)(3)) may never use the cash method. See sections
! it files its return, send the IRS an explanation and we will 448(a)(1) through (a)(3). However, see Nonaccrual experience
CAUTION determine if the corporation meets reasonable-cause method for service providers in the instructions for line 1a.
criteria. Do not attach an explanation when the corporation's • Unless it is a small business taxpayer (defined below), a
return is filed. corporation must use an accrual method for sales and
purchases of inventory items. See the instructions for Form
Interest. Interest is charged on taxes paid late even if an 1125-A.
extension of time to file is granted. Interest is also charged on • A corporation engaged in farming must use an accrual
penalties imposed for failure to file, negligence, fraud, substantial method. For exceptions, see section 447 and Pub. 225.
valuation misstatements, substantial understatements of tax, • Special rules apply to long-term contracts. See section 460.
and reportable transaction understatements from the due date • Dealers in securities must use the mark-to-market accounting
(including extensions) to the date of payment. The interest method. Dealers in commodities and traders in securities and
charge is figured at a rate determined under section 6621. commodities can elect to use the mark-to-market accounting
Late filing of return. A corporation that does not file its tax method. See section 475.
return by the due date, including extensions, may be penalized Small business taxpayer. For tax years beginning in 2023, a
5% of the unpaid tax for each month or part of a month the return corporation qualifies as a small business taxpayer if (a) it has
is late, up to a maximum of 25% of the unpaid tax. The minimum average annual gross receipts of $29 million or less for the 3
penalty for a tax return required to be filed in 2024 that is more prior tax years, and (b) it is not a tax shelter (as defined in
than 60 days late is the smaller of the tax due or $485. The section 448(d)(3)).
penalty will not be imposed if the corporation can show that the A small business taxpayer can account for inventory by (a)
failure to file on time was due to reasonable cause. See Caution, treating the inventory as non-incidental materials and supplies,
earlier. or (b) conforming to its treatment of inventory in an applicable
Late payment of tax. A corporation that does not pay the tax financial statement (as defined in section 451(b)(3)). If it does
when due may generally be penalized / of 1% of the unpaid tax 1 2 not have an applicable financial statement, it can use the method
for each month or part of a month the tax is not paid, up to a of accounting used in its books and records prepared according
maximum of 25% of the unpaid tax. See Caution, earlier. to its accounting procedures.
Trust fund recovery penalty. This penalty may apply if certain Change in accounting method. Generally, the corporation
excise, income, social security, and Medicare taxes that must be must get IRS consent to change either an overall method of
collected or withheld are not collected or withheld, or these taxes accounting or the accounting treatment of any material item for
are not paid. These taxes are generally reported on: income tax purposes. To obtain consent, the corporation must
• Form 720, Quarterly Federal Excise Tax Return; generally file Form 3115, Application for Change in Accounting
• Form 941, Employer's QUARTERLY Federal Tax Return; Method, during the tax year for which the change is requested.
• Form 943, Employer's Annual Federal Tax Return for See the Instructions for Form 3115 and Pub. 538 for more
Agricultural Employees; information and exceptions. Also see the Instructions for Form
• Form 944, Employer's ANNUAL Federal Tax Return; or 3115 for procedures that may apply for obtaining automatic
• Form 945, Annual Return of Withheld Federal Income Tax. consent to change certain methods of accounting,
The trust fund recovery penalty may be imposed on all non-automatic change procedures, and reduced Form 3115
persons who are determined by the IRS to have been filing requirements.
responsible for collecting, accounting for, or paying over these Section 481(a) adjustment. If the corporation's taxable
taxes, and who acted willfully in not doing so. The penalty is income for the current tax year is figured under a method of
equal to the full amount of the unpaid trust fund tax. See the accounting different from the method used in the preceding tax
Instructions for Form 720, Pub. 15 (Circular E), Employer's Tax year, the corporation may have to make an adjustment under
Guide, or Pub. 51 (Circular A), Agricultural Employer's Tax section 481(a) to prevent amounts of income or expense from
Guide, for details, including the definition of responsible persons. being duplicated or omitted. The section 481(a) adjustment
period is generally 1 year for a net negative adjustment and 4
Note. The trust fund recovery penalty will not apply to any years for a net positive adjustment. For an eligible terminated S
amount of trust fund taxes an employer holds back in anticipation corporation, the section 481(a) adjustment period is generally 6
of the credit for qualified sick and family leave wages or the years for a negative or positive adjustment that is attributable to
employee retention credit that they are entitled to. See Pub. 15 or the S corporation's revocation of its election under section
Pub. 51 for more information. 1362(a) after December 21, 2017, and before December 22,
2019. See section 481(d). Also, see the Instructions for Form
Other penalties. Other penalties can be imposed for 3115.
negligence, substantial understatement of tax, reportable
transaction understatements, and fraud. See sections 6662, Exceptions to the general section 481(a) adjustment period
6662A, and 6663. may apply. Also, in some cases, a corporation can elect to
modify the section 481(a) adjustment period. The corporation
may have to complete the appropriate lines of Form 3115 to
Accounting Methods make an election. See the Instructions for Form 3115 for more
information and exceptions.
Figure taxable income using the method of accounting regularly
used in keeping the corporation's books and records. In all

6 Instructions for Form 1120

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If the net section 481(a) adjustment is positive, report the 2. Any transaction offered under conditions of confidentiality
ratable portion on Form 1120, line 10, as other income. If the net for which the corporation (or a related party) paid an advisor a
section 481(a) adjustment is negative, report the ratable portion fee of at least $250,000.
on line 26 as a deduction. 3. Certain transactions for which the corporation (or a
related party) has contractual protection against disallowance of
Accounting Period the tax benefits.
A corporation must figure its taxable income on the basis of a tax 4. Certain transactions resulting in a loss of at least $10
year. A tax year is the annual accounting period a corporation million in any single year or $20 million in any combination of
uses to keep its records and report its income and expenses. years.
Generally, corporations can use a calendar year or a fiscal year.
Personal service corporations, however, must use a calendar 5. Any transaction identified by the IRS by notice, regulation,
year unless they meet one of the exceptions discussed later or other published guidance as a “transaction of interest.”
under Personal Service Corporation. For more information, see Regulations section 1.6011-4.
Change of tax year. Generally, a corporation, including a Also, see the Instructions for Form 8886.
personal service corporation, must get the consent of the IRS Penalties. The corporation may have to pay a penalty if it is
before changing its tax year by filing Form 1128, Application To required to disclose a reportable transaction under section 6011
Adopt, Change, or Retain a Tax Year. However, exceptions may and fails to properly complete and file Form 8886. Penalties may
apply. See the Instructions for Form 1128 and Pub. 538 for more also apply under section 6707A if the corporation fails to file
information. Form 8886 with its corporate return, fails to provide a copy of
Form 8886 to the Office of Tax Shelter Analysis (OTSA), or files a
Rounding Off to form that fails to include all the information required (or includes
incorrect information). Other penalties, such as an
Whole Dollars accuracy-related penalty under section 6662A, may also apply.
The corporation may enter decimal points and cents when See the Instructions for Form 8886 for details on these and other
completing its return. However, the corporation should round off penalties.
cents to whole dollars on its return, forms, and schedules to
make completing its return easier. The corporation must either Reportable transactions by material advisors. Material
round off all amounts on its return to whole dollars, or use cents advisors to any reportable transaction must disclose certain
for all amounts. To round, drop amounts under 50 cents and information about the reportable transaction by filing Form 8918
increase amounts from 50 to 99 cents to the next dollar. For with the IRS. For details, see the Instructions for Form 8918.
example, $8.40 rounds to $8 and $8.50 rounds to $9. Transfers to a corporation controlled by the transferor.
Every significant transferor (as defined in Regulations section
If two or more amounts must be added to figure the amount to
1.351-3(d)(1)) that receives stock of a corporation in exchange
enter on a line, include cents when adding the amounts and
for property in a nonrecognition event must include the
round off only the total.
statement required by Regulations section 1.351-3(a) on or with
Recordkeeping the transferor's tax return for the tax year of the exchange. The
transferee corporation must include the statement required by
Keep the corporation's records for as long as they may be Regulations section 1.351-3(b) on or with its return for the tax
needed for the administration of any provision of the Internal year of the exchange, unless all the required information is
Revenue Code. Usually, records that support an item of income, included in any statement(s) provided by a significant transferor
deduction, or credit on the return must be kept for 3 years from that is attached to the same return for the same section 351
the date the return is due or filed, whichever is later. Keep exchange. If the transferor or transferee corporation is a
records that verify the corporation's basis in property for as long controlled foreign corporation (CFC), each U.S. shareholder
as they are needed to figure the basis of the original or (within the meaning of section 951(b)) must include the required
replacement property. statement on or with its return.
The corporation should keep copies of all filed returns. They Distributions under section 355. Every corporation that
help in preparing future and amended returns and in the makes a distribution of stock or securities of a controlled
calculation of earnings and profits. corporation, as described in section 355 (or so much of section
356 as it relates to section 355), must include the statement
Other Forms and Statements That required by Regulations section 1.355-5(a) on or with its return
May Be Required for the year of the distribution. A significant distributee (as
defined in Regulations section 1.355-5(c)) that receives stock or
Amended return. Use Form 1120-X, Amended U.S. securities of a controlled corporation must include the statement
Corporation Income Tax Return, to correct a previously filed required by Regulations section 1.355-5(b) on or with its return
Form 1120. for the year of receipt. If the distributing or distributee corporation
Reportable transaction disclosure statement. Disclose is a CFC, each U.S. shareholder (within the meaning of section
information for each reportable transaction in which the 951(b)) must include the statement on or with its return.
corporation participated. Form 8886, Reportable Transaction Dual consolidated losses. If a domestic corporation incurs a
Disclosure Statement, must be filed for each tax year that the dual consolidated loss (as defined in Regulations section
federal income tax liability of the corporation is affected by its 1.1503(d)-1(b)(5)), the corporation (or consolidated group) may
participation in the transaction. The following are reportable need to attach a domestic use agreement and/or an annual
transactions. certification, as provided in Regulations section 1.1503(d)-6(d)
1. Any listed transaction, which is a transaction that is the and (g).
same as or substantially similar to one of the types of Election to reduce basis under section 362(e)(2)(C). If
transactions that the IRS has determined to be a tax avoidance property is transferred to a corporation subject to section 362(e)
transaction and identified by notice, regulation, or other (2), the transferor and the transferee corporation may elect,
published guidance as a listed transaction. under section 362(e)(2)(C), to reduce the transferor's basis in
the stock received instead of reducing the transferee

Instructions for Form 1120 7

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corporation's basis in the property transferred. Once made, the      file in addition to the forms and statements discussed throughout 
election is irrevocable. For more information, see section 362(e)    these instructions.
(2) and Regulations section 1.362-4. If an election is made, a 
statement must be filed in accordance with Regulations section 
1.362-4(d)(3).                                                       Specific Instructions
Annual information reporting by specified domestic enti-
ties under section 6038D.     Certain domestic corporations that     Period Covered
are formed or availed of to hold specified foreign financial assets  File the 2023 return for calendar year 2023 and fiscal years that 
(“specified domestic entities”) must file Form 8938. Form 8938       begin in 2023 and end in 2024. For a fiscal or short tax year 
must be filed each year the value of the corporation's specified     return, fill in the tax year space at the top of the form.
foreign financial assets is more than $50,000 on the last day of       The 2023 Form 1120 can also be used if:
the tax year or more than $75,000 at any time during the tax         • The corporation has a tax year of less than 12 months that 
year. For more information on domestic corporations that are         begins and ends in 2024, and
specified domestic entities and the types of foreign financial       • The 2024 Form 1120 is not available at the time the 
assets that must be reported, see the Instructions for Form 8938,    corporation is required to file its return.
generally, and in particular, Who Must File Specified Domestic ,     The corporation must show its 2024 tax year on the 2023 Form 
Entity Specified Foreign Financial Assets Interests in Specified , , 1120 and take into account any tax law changes that are 
Foreign Financial Assets Assets Not Required To Be Reported,     ,   effective for tax years beginning after December 31, 2023.
and Exceptions to Reporting.
  In addition, a domestic corporation required to file Form 8938     Name and Address
with its Form 1120 for the tax year should check “Yes” to            Enter the corporation's true name (as set forth in the charter or 
Schedule N (Form 1120), Question 8, and also include that            other legal document creating it), address, and EIN on the 
schedule with its Form 1120.                                         appropriate lines. Enter the address of the corporation's principal 
Form 8975. Certain U.S. persons that are the ultimate parent         office or place of business. Include the suite, room, or other unit 
entity of a U.S. multinational enterprise group with annual          number after the street address. If the post office does not 
revenue for the preceding reporting period of $850 million or        deliver mail to the street address and the corporation has a P.O. 
more are required to file Form 8975, Country-by-Country Report.      box, show the box number instead.
Form 8975 and Schedule A (Form 8975) must be filed with the 
income tax return of the ultimate parent entity of a U.S.            Note.  Do not use the address of the registered agent for the 
multinational enterprise group for the tax year in or within which   state in which the corporation is incorporated. For example, if a 
the reporting period covered by Form 8975 ends. For more             business is incorporated in Delaware or Nevada and the 
information, see Form 8975, Schedule A (Form 8975) and the           corporation's principal office is located in Little Rock, Arkansas, 
Instructions for Form 8975, and Schedule A (Form 8975).              the corporation should enter the Little Rock address.
Paycheck Protection Program (PPP) loans.   A corporation               If the corporation receives its mail in care of a third party 
that had tax-exempt income resulting from the forgiveness of a       (such as an accountant or an attorney), enter on the street 
PPP loan should attach a statement to its return reporting each      address line “C/O” followed by the third party's name and street 
tax year for which the corporation is applying Rev. Proc.            address or P.O. box.
2021-48, sections 3.01(1), (2), or (3). Any statement for the          If the corporation has a foreign address, include the city or 
current tax year should include the following information, for       town, state or province, country, and foreign postal code. Do not 
each PPP loan:                                                       abbreviate the country name. Follow the country's practice for 
  1. The corporation's name, address, and EIN;                       entering the name of the state or province and postal code.
  2. A statement that the corporation is applying or applied 
section 3.01(1), (2), or (3) of Rev. Proc. 2021-48, and for what     Item A. Identifying Information
tax year, as applicable;
  3. The amount of tax-exempt income from forgiveness of the         Consolidated Return
PPP loan that the corporation is treating as received or accrued     Corporations filing a consolidated return must check Item A, 
and for which tax year; and                                          box 1a, and attach Form 851, Affiliations Schedule, and other 
                                                                     supporting statements to the return. Also, for the first year a 
  4. Whether forgiveness of the PPP loan has been granted as         subsidiary corporation is being included in a consolidated return, 
of the date the return is filed.                                     attach Form 1122 to the parent's consolidated return. Attach a 
  A corporation that reported tax-exempt income from the             separate Form 1122 for each new subsidiary being included in 
forgiveness of a PPP loan on its 2020 return, the timing of which    the consolidated return.
corresponds to one of the options presented in Rev. Proc. 
2021-48, need not file an amended return solely to attach the          File supporting statements for each corporation included in 
statement that is described in these instructions.                   the consolidated return. Do not use Form 1120 as a supporting 
                                                                     statement. On the supporting statement, use columns to show 
  If a corporation treats tax-exempt income resulting from a         the following, both before and after adjustments.
PPP loan as received or accrued prior to when forgiveness of the 
PPP loan is granted and the amount of forgiveness granted is           1. Items of gross income and deductions.
less than the amount of tax-exempt income that was previously          2. A computation of taxable income.
treated as received or accrued, the corporation should make a          3. Balance sheets, as of the beginning and end of the tax 
prior-period adjustment on Schedule M-2 for the tax year in          year.
which the corporation receives notice that the PPP loan was not        4. A reconciliation of income per books with income per 
fully forgiven. See the instructions for Schedule M-2 for more       return.
details.
                                                                       5. A reconciliation of retained earnings.
Other forms and statements.      See Pub. 542, Corporations, for 
a list of other forms and statements a corporation may need to         Enter on Form 1120 the totals for each item of income, gain, 
                                                                     loss, expense, or deduction, net of eliminating entries for 

8                                                                                                     Instructions for Form 1120

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intercompany transactions between corporations within the               the tax year, or (b) are not required to file Schedule M-3 (Form 
consolidated group. Attach consolidated balance sheets and a            1120) and voluntarily file Schedule M-3 (Form 1120), must either 
reconciliation of consolidated retained earnings.                       (i) complete Schedule M-3 (Form 1120) entirely, or (ii) complete 
                                                                        Schedule M-3 (Form 1120) through Part I, and complete Form 
        The corporation does not have to provide the information 
                                                                        1120, Schedule M-1, instead of completing Parts II and III of 
TIP     requested in (3), (4), and (5), above, if its total receipts 
                                                                        Schedule M-3 (Form 1120). If the corporation chooses to 
        (line 1a plus lines 4 through 10 on page 1 of the return) 
                                                                        complete Schedule M-1 instead of completing Parts II and III of 
and its total assets at the end of the tax year (Schedule L, 
                                                                        Schedule M-3, the amount on Schedule M-1, line 1, must equal 
line 15(d)) are less than $250,000. See Schedule K, Question 
                                                                        the amount on Schedule M-3, Part I, line 11. See the Instructions 
13.
                                                                        for Schedule M-3 (Form 1120) for more details. Also, see the 
                                                                        instructions for Schedule M-1, later.
  For more information on consolidated returns, see the 
regulations under section 1502.                                           If you are filing Schedule M-3, check Item A, box 4, to indicate 
                                                                        that Schedule M-3 is attached.
Life-Nonlife Consolidated Return
If Item A, box 1a, is checked and the corporation is the common         Item B. Employer Identification 
parent of a consolidated group that includes a life insurance           Number (EIN)
company, also check box 1b. See Regulations section 
1.1502-47(m) for the requirements for filing a consolidated tax         Enter the corporation's EIN. If the corporation does not have an 
return for a life-nonlife consolidated group.                           EIN, it must apply for one. An EIN can be applied for:
                                                                        • Online—Go to IRS.gov/EIN. The EIN is issued immediately 
Personal Holding Company                                                once the application information is validated.
                                                                        • By faxing or mailing Form SS-4, Application for Employer 
A personal holding company must check Item A, box 2, and                Identification Number.
attach Schedule PH (Form 1120), U.S. Personal Holding 
Company (PHC) Tax. See the Instructions for Schedule PH                         Corporations located in the United States or U.S. 
(Form 1120) for details.                                                  !     territories can use the online application. Foreign 
                                                                        CAUTION corporations should call 267-941-1099 (not a toll free 
Personal Service Corporation                                            number) for more information on obtaining an EIN. See the 
If the corporation is a personal service corporation, check Item        Instructions for Form SS-4.
A, box 3. A personal service corporation is a corporation whose 
principal activity for the testing period is the performance of         EIN applied for, but not received.   If the corporation has not 
personal services. The testing period for a tax year is generally       received its EIN by the time the return is due, enter “Applied For” 
the prior tax year unless the corporation has just been formed.         and the date the corporation applied in the space for the EIN. 
Personal services include any activity performed in the fields of       However, if the corporation is filing its return electronically, an 
accounting, actuarial science, architecture, consulting,                EIN is required at the time the return is filed. An exception 
engineering, health, law, and the performing arts. The services         applies to subsidiaries of corporations whose returns are filed 
must be substantially performed by employee-owners.                     with the parent's electronically filed consolidated Form 1120. 
                                                                        These subsidiaries should enter “Applied For” in the space for 
  A personal service corporation must use a calendar tax year           the EIN on their returns. The subsidiaries' returns are identified 
unless:                                                                 under the parent corporation's EIN.
• It elects to use a 52-53-week tax year that ends with reference 
to the calendar year or tax year elected under section 444;               For more information, see the Instructions for Form SS-4.
• It can establish a business purpose for a different tax year and 
obtains the approval of the IRS (see the Instructions for Form          Item D. Total Assets
1128 and Pub. 538); or                                                  Enter the corporation's total assets (as determined by the 
• It elects under section 444 to have a tax year other than a           accounting method regularly used in keeping the corporation's 
calendar year. To make the election, use Form 8716, Election To         books and records) at the end of the tax year. If there are no 
Have a Tax Year Other Than a Required Tax Year.                         assets at the end of the tax year, enter -0-.
  If a corporation makes the section 444 election, its deduction          If the corporation is required to complete Schedule L, enter 
for certain amounts paid to employee-owners may be limited.             the total assets from Schedule L, line 15, column (d), on page 1, 
See Schedule H (Form 1120), Section 280H Limitations for a              Item D. If filing a consolidated return, report total consolidated 
Personal Service Corporation (PSC), to figure the maximum               assets for all corporations joining in the return.
deduction.
                                                                        Item E. Initial Return, Final Return, 
  If a section 444 election is terminated and the termination 
results in a short tax year, type or print at the top of the first page Name Change, or Address Change
of Form 1120 for the short tax year “SECTION 444 ELECTION               • If this is the corporation's first return, check the “Initial return” 
TERMINATED.”                                                            box.
                                                                        • If this is the corporation's final return and it will no longer exist, 
Schedule M-3 (Form 1120)                                                check the “Final return” box.
A corporation with total assets (nonconsolidated or consolidated        • If the corporation changed its name since it last filed a return, 
for all corporations included within a consolidated tax group) of       check the “Name change” box. Generally, a corporation must 
$10 million or more on the last day of the tax year must file           also have amended its articles of incorporation and filed the 
Schedule M-3 (Form 1120) instead of Schedule M-1. A                     amendment with the state in which it was incorporated.
corporation filing Form 1120 that is not required to file               • If the corporation has changed its address since it last filed a 
Schedule M-3 may voluntarily file Schedule M-3 instead of               return (including a change to an “in care of” address), check the 
Schedule M-1.                                                           “Address change” box.
  Corporations that (a) are required to file Schedule M-3 (Form         Note. If a change in address or responsible party occurs after 
1120) and have less than $50 million total assets at the end of         the return is filed, use Form 8822-B, Change of Address or 
Instructions for Form 1120                                                                                                                      9

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Responsible Party— Business, to notify the IRS. See the • The services are in the fields of health, law, engineering,
instructions for Form 8822-B for details. architecture, accounting, actuarial science, performing arts, or
consulting; or
• The corporation meets the section 448(c) gross receipts test
Income for all prior years.
Except as otherwise provided in the Internal Revenue Code, This provision does not apply to any amount if interest is
gross income includes all income from whatever source derived. required to be paid on the amount or if there is any penalty for
Exception for income from qualifying shipping activities. failure to timely pay the amount. See Regulations section
Gross income does not include income from qualifying shipping 1.448-3 for more information on the nonaccrual experience
activities if the corporation makes an election under section 1354 method, including information on safe harbor methods.
to be taxed on its notional shipping income (as defined in section For information on a book safe harbor method of accounting
1353) at the highest corporate tax rate. If the election is made, for corporations that use the nonaccrual experience method of
the corporation generally may not claim any loss, deduction, or accounting, see Rev. Proc. 2011-46, 2011-42 I.R.B. 518
credit with respect to qualifying shipping activities. A corporation available at IRS.gov/irb/2011-42_IRB#RP-2011-46, or any
making this election may also elect to defer gain on the successor. Also, see the Instructions for Form 3115 for
disposition of a qualifying vessel. procedures to obtain automatic consent to change to this
Use Form 8902, Alternative Tax on Qualifying Shipping method or make certain changes within this method.
Activities, to figure the tax. Include the alternative tax on Corporations that qualify to use the nonaccrual experience
Schedule J, Part I, line 9e. method should attach a statement to its return showing total
gross receipts, the amount not accrued because of the
Line 1. Gross Receipts or Sales application of section 448(d)(5), and the net amount accrued.
Line 1a. Gross receipts or sales. Enter on line 1a gross Enter the net amount on line 1a.
receipts or sales from all business operations, except for Line 1b. Returns and allowances. Enter cash and credit
amounts that must be reported on lines 4 through 10. refunds the corporation made to customers for returned
Special rules apply to certain income, as discussed below. merchandise, rebates, and other allowances made on gross
Advance payments. In general, advance payments must be receipts or sales.
included in income in the year of receipt. For exceptions to this
general rule for corporations that use the accrual method of Line 2. Cost of Goods Sold
accounting, see the following. Complete and attach Form 1125-A, Cost of Goods Sold, if
• To report income from long-term contracts, see section 460. applicable. Enter on Form 1120, line 2, the amount from Form
• For rules that allow a limited deferral of advance payments 1125-A, line 8. See Form 1125-A and its instructions.
beyond the current tax year, see section 451(c). Also, see
Regulations sections 1.451-8(c), (d), and (e). For applicability Line 4. Dividends and Inclusions
dates, see Regulations section 1.451-8(h). See the instructions for Schedule C, later. Complete Schedule C
• For information on adopting or changing to a permissible and enter on line 4 the amount from Schedule C, line 23, column
method for reporting advance payments for services and certain (a).
goods by an accrual method corporation, see the Instructions for
Form 3115. Line 5. Interest
Installment sales. Generally, the installment method cannot Enter taxable interest on U.S. obligations and on loans, notes,
be used for dealer dispositions of property. A “dealer disposition” mortgages, bonds, bank deposits, corporate bonds, tax refunds,
is any disposition of (a) personal property by a person who etc. Do not offset interest expense against interest income.
regularly sells or otherwise disposes of personal property of the Special rules apply to interest income from certain
same type on the installment plan, or (b) real property held for below-market-rate loans. See section 7872 for details.
sale to customers in the ordinary course of the taxpayer's trade
or business. Note. Report tax-exempt interest on Schedule K, item 9. Also, if
The restrictions on using the installment method do not apply required, include the same amount on Schedule M-1, line 7, or
to the following. Schedule M-3 (Form 1120), Part II, line 13, if applicable.
• Dispositions of property used or produced in the trade or
business of farming. Line 6. Gross Rents
• Certain dispositions of timeshares and residential lots Enter the gross amount received for the rental of property.
reported under the installment method for which the corporation Deduct expenses such as repairs, interest, taxes, and
elects to pay interest under section 453(I)(3). depreciation on the proper lines for deductions. A rental activity
Enter on line 1a (and carry to line 3) the gross profit on held by a closely held corporation or a personal service
collections from these installment sales. Attach a statement corporation may be subject to the passive activity loss rules. See
showing the following information for the current and the 3 Passive activity limitations, later.
preceding years: (a) gross sales, (b) cost of goods sold, (c)
gross profits, (d) percentage of gross profits to gross sales, (e) Line 10. Other Income
amount collected, and (f) gross profit on the amount collected. Enter any other taxable income not reported on lines 1 through
For sales of timeshares and residential lots reported under 9. List the type and amount of income on an attached statement.
the installment method, if the corporation elects to pay interest If the corporation has only one item of other income, describe it
under section 453(I)(3), the corporation's income tax is in parentheses on line 10.
increased by the interest payable under section 453(l)(3). Report
this addition to the tax on Schedule J, Part I, line 9g. Examples of other income to report on line 10 include the
following.
Nonaccrual experience method for service providers. Recoveries of bad debts deducted in prior years under the
Accrual method corporations are not required to accrue certain •
specific charge-off method.
amounts to be received from the performance of services that, Any amount includible in income from Form 6478, Biofuel
based on their experience, will not be collected, if: •
Producer Credit.

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• Any amount includible in income from Form 8864, Biodiesel, qualified leave wages were paid, which might, under certain
Renewable Diesel, or Sustainable Aviation Fuels Credit. circumstances, not occur until a quarter after September 30,
• Refunds of taxes deducted in prior years to the extent they 2021, including quarters in 2023.
reduced the amount of tax imposed. See section 111 and the
related regulations. Do not offset current-year taxes against tax
refunds. Deductions
• Ordinary income from trade or business activities of a
partnership (from Schedule K-1 (Form 1065)). Do not offset Limitations on Deductions
ordinary losses against ordinary income. Instead, include the Uniform capitalization rules. The uniform capitalization rules
losses on line 26. Show the partnership's name, address, and of section 263A require corporations to capitalize certain costs to
EIN on a separate statement attached to this return. If the inventory or other property. Corporations subject to the section
amount entered is from more than one partnership, identify the 263A uniform capitalization rules are required to capitalize:
amount from each partnership.
• The transferred loss amount identified as “Section 91 1. Direct costs of assets produced or acquired for resale,
Transferred Loss Amount,” which is required to be recognized and
when substantially all the assets of a foreign branch are 2. Certain indirect costs (including taxes) that are properly
transferred to a specified 10% owned foreign corporation (as allocable to property produced or property acquired for resale.
defined in section 245A(b)) with respect to which the corporation The corporation cannot deduct the costs required to be
was a U.S. shareholder immediately after the transfer. See capitalized under section 263A until it sells, uses, or otherwise
section 91. disposes of the property (to which the costs relate). The
• Any LIFO recapture amount under section 1363(d). The corporation recovers these costs through depreciation,
corporation may have to include a LIFO recapture amount in amortization, or cost of goods sold.
income if it:
1. Used the LIFO inventory method for its last tax year A small business taxpayer (defined earlier) is not required to
before the first tax year for which it elected to become an S capitalize costs under section 263A. A small business taxpayer
corporation, or that wants to discontinue capitalizing costs under section 263A
2. Transferred LIFO inventory assets to an S corporation in a must change its method of accounting. See section 263A(i) and
nonrecognition transaction in which those assets were Regulations section 1.263A-1(j). Also, see the Instructions for
transferred basis property. Form 3115.
The LIFO recapture amount is the amount by which the C For more information on the uniform capitalization rules, see
corporation's inventory under the FIFO method exceeds the Pub. 538. Also, see Regulations sections 1.263A-1 through
inventory amount under the LIFO method at the close of the 1.263A-3. See section 263A(d), Regulations section 1.263A-4,
corporation's last tax year as a C corporation (or for the year of and Pub. 225 for rules for property produced in a farming
the transfer, if (2) above applies). Also, see the instructions for business.
Schedule J, Part I, line 11. Transactions between related taxpayers. Generally, an
• The ratable portion of any net positive section 481(a) accrual basis taxpayer can only deduct business expenses and
adjustment. See Section 481(a) adjustment, earlier. interest owed to a related party in the year the payment is
• Part or all of the proceeds received from certain included in the income of the related party. See sections 163(e)
corporate-owned life insurance contracts issued after August 17, (3) and 267(a)(2) for limitations on deductions for unpaid interest
2006. Corporations that own one or more employer-owned life and expenses.
insurance contracts issued after this date must file Form 8925,
Report of Employer-Owned Life Insurance Contracts. See Form Limitations on business interest expense. Business interest
8925. expense may be limited. See section 163(j) and Form 8990.
• Income from cancellation of debt (COD) from the repurchase Also, see Limitation on deduction in the instructions for line 18
of a debt instrument for less than its adjusted issue price. and Schedule K, Question 23 and Question 24, later.
• The corporation's share of the following income from Form Section 291 limitations. Corporations may be required to
8621, Information Return by a Shareholder of a Passive Foreign adjust deductions for depletion of iron ore and coal, intangible
Investment Company or Qualified Electing Fund. drilling and exploration and development costs, certain
1. Ordinary earnings of a qualified electing fund. deductions for financial institutions, and the amortizable basis of
pollution control facilities. See section 291 to determine the
2. Gain or loss from marking passive foreign investment amount of the adjustment.
company (PFIC) stock to market.
3. Gain or loss from sale or other disposition of section 1296 Election to deduct business start-up and organizational
stock. costs. A corporation can elect to deduct a limited amount of
start-up and organizational costs it paid or incurred. Any
4. Excess distributions from a section 1291 fund allocated to remaining costs must generally be amortized over a 180-month
the current year and pre-PFIC years, if any. period. See sections 195 and 248 and the related regulations.
See Form 8621 and the Instructions for Form 8621 for details. Time for making an election. The corporation generally
• Any payroll tax credit taken by an employer on its 2023 elects to deduct start-up or organizational costs by claiming the
employment tax returns (Forms 941, 943, and 944) for qualified deduction on its income tax return filed by the due date
paid sick and qualified paid family leave under FFCRA and ARP (including extensions) for the tax year in which the active trade or
(both the nonrefundable and refundable portions). The business begins. For more details, see the Instructions for Form
corporation must include the full amount of the credit for qualified 4562.
sick and family leave wages in gross income for the tax year that If the corporation timely filed its return for the year without
includes the last day of any calendar quarter in which the credit making an election, it can still make an election by filing an
is allowed. amended return within 6 months of the due date of the return
(excluding extensions). Clearly indicate the election on the
Note. A credit is available only if the leave was taken after amended return and enter “Filed pursuant to section
March 31, 2020, and before October 1, 2021, and only after the 301.9100-2” at the top of the amended return. File the amended
Instructions for Form 1120 11

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return at the same address the corporation filed its original If the corporation has any of the credits listed above, figure
return. The election applies when figuring taxable income for the the current-year credit before figuring the deduction for expenses
current tax year and all subsequent years. on which the credit is based. If the corporation capitalized any
The corporation can choose to forgo the elections above by costs on which it figured the credit, it may need to reduce the
affirmatively electing to capitalize its start-up or organizational amount capitalized by the credit attributable to these costs.
costs on its income tax return filed by the due date (including See the instructions for the form used to figure the applicable
extensions) for the tax year in which the active trade or business credit for more details.
begins.
Limitations on deductions related to property leased to
Note. The election to either amortize or capitalize start-up costs tax-exempt entities. If a corporation leases property to a
is irrevocable and applies to all start-up costs that are related to governmental or other tax-exempt entity, the corporation cannot
the trade or business. claim deductions related to the property to the extent that they
exceed the corporation's income from the lease payments. This
Report the deductible amount of start-up and organizational disallowed tax-exempt use loss can be carried over to the next
costs and any amortization on line 26. For amortization that tax year and treated as a deduction with respect to the property
begins during the current tax year, complete and attach Form for that tax year. See section 470(d) for exceptions.
4562, Depreciation and Amortization.
Limitation on tax benefits for remuneration under the Pa-
Passive activity limitations. Limitations on passive activity tient Protection and Affordable Care Act. The $1 million
losses and credits under section 469 apply to personal service compensation limit is reduced to $500,000 for remuneration for
corporations (defined earlier) and closely held corporations services provided by individuals for or on behalf of certain health
(defined later). insurance providers. The $500,000 limitation applies to
Generally, the two kinds of passive activities are: remuneration that is deductible in the tax year during which the
• Trade or business activities in which the corporation did not services were performed and remuneration for services during
materially participate for the tax year; and the year that is deductible in a future tax year (called "deferred
• Rental activities, regardless of its participation. deduction remuneration"). The $500,000 limitation is reduced by
For exceptions, see Form 8810, Corporate Passive Activity Loss any amounts disallowed as excess parachute payments. See
and Credit Limitations. section 162(m)(6) and Regulations section 1.162-31 for
Corporations subject to the passive activity limitations must definitions and other special rules.
complete Form 8810 to compute their allowable passive activity
loss and credit. Before completing Form 8810, see Temporary Line 12. Compensation of Officers
Regulations section 1.163-8T, which provides rules for allocating Enter deductible officers' compensation on line 12. Do not
interest expense among activities. If a passive activity is also include compensation deductible elsewhere on the return, such
subject to the at-risk rules of section 465 or the tax-exempt use as amounts included in cost of goods sold, elective contributions
loss rules of section 470, those rules apply before the passive to a section 401(k) cash or deferred arrangement, or amounts
loss rules. contributed under a salary reduction SEP agreement or a
For more information, see section 469, the related SIMPLE IRA plan.
regulations, and Pub. 925, Passive Activity and At-Risk Rules. If the corporation's total receipts (line 1a, plus lines 4 through
Closely held corporations. A corporation is a closely held 10) are $500,000 or more, complete Form 1125-E,
corporation if: Compensation of Officers. Enter on Form 1120, line 12, the
• At any time during the last half of the tax year more than 50% amount from Form 1125-E, line 4.
in value of its outstanding stock is directly or indirectly owned by
or for not more than five individuals, and Line 13. Salaries and Wages
• The corporation is not a personal service corporation. Enter the total salaries and wages paid for the tax year. Do not
Certain organizations are treated as individuals for purposes include salaries and wages deductible elsewhere on the return,
of this test. See section 542(a)(2). For rules for determining such as amounts included in officers' compensation, cost of
stock ownership, see section 544 (as modified by section 465(a) goods sold, elective contributions to a section 401(k) cash or
(3)). deferred arrangement, or amounts contributed under a salary
Reducing certain expenses for which credits are allowable. reduction SEP agreement or a SIMPLE IRA plan.
If the corporation claims certain credits, it may need to reduce If the corporation provided taxable fringe benefits to its
the otherwise allowable deductions for expenses used to figure employees, such as personal use of a car, do not deduct as
the credit. This applies to credits such as the following. wages the amount allocated for depreciation and other expenses
• Work opportunity credit (Form 5884). claimed on lines 20 and 26.
• Credit for increasing research activities (Form 6765).
• Orphan drug credit (Form 8820). If the corporation claims a credit for any wages paid or
• Disabled access credit (Form 8826). ! incurred, it may need to reduce any corresponding
• Empowerment zone employment credit (Form 8844). CAUTION deduction for officers' compensation and salaries and
• Credit for employer social security and Medicare taxes paid wages. See Reducing certain expenses for which credits are
on certain employee tips (Form 8846). allowable, earlier.
• Credit for small employer pension plan start-up costs (Form
8881). Line 14. Repairs and Maintenance
• Credit for employer-provided childcare facilities and services Enter the cost of repairs and maintenance not claimed
(Form 8882). elsewhere on the return, such as labor and supplies, that are not
• Low sulfur diesel fuel production credit (Form 8896). payments to produce or improve real or tangible personal
• Credit for employer differential wage payments (Form 8932). property. See Regulations section 1.263(a)-1. For example,
• Credit for small employer health insurance premiums (Form amounts are paid for improvements if they are for betterments to
8941). the property, restorations of the property (such as the
• Employer credit for paid family and medical leave (Form replacements of major components or substantial structural
8994). parts), or if they adapt the property to a new or different use.

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Amounts paid to produce or improve property must be property (these taxes must be treated as a part of the cost of the
capitalized. See Regulations sections 1.263(a)-2 and (a)-3. acquired property or, in the case of a disposition, as a reduction
The corporation can deduct repair and maintenance in the amount realized on the disposition).
expenses only to the extent they relate to a trade or business • Taxes assessed against local benefits that increase the value
activity. See Regulations section 1.162-4. The corporation may of the property assessed (such as for paving, etc.).
elect to capitalize certain repair and maintenance costs • Taxes deducted elsewhere on the return, such as those
consistent with its books and records. See Regulations section reflected in cost of goods sold.
1.263(a)-3(n) for information on how to make the election. See section 164(d) for information on apportionment of taxes
on real property between seller and purchaser.
Line 15. Bad Debts
Do not reduce the corporation's deduction for social
Enter the total debts that became worthless in whole or in part ! security and Medicare taxes by the nonrefundable and
during the tax year. A small bank or thrift institution using the CAUTION refundable portions of any FFCRA and ARP credits for
reserve method of section 585 should attach a statement qualified sick and family leave wages claimed on its employment
showing how it figured the current year's provision. A corporation tax returns. Instead, report this amount as income on line 10.
that uses the cash method of accounting cannot claim a bad
debt deduction unless the amount was previously included in
income. Line 18. Interest
Line 16. Rents Note. Do not offset interest income against interest expense.
If the corporation rented or leased a vehicle, enter the total The corporation must make an interest allocation if the
annual rent or lease expense paid or incurred during the year. proceeds of a loan were used for more than one purpose (for
Also, complete Part V of Form 4562. If the corporation leased a example, to purchase a portfolio investment and to acquire an
vehicle for a term of 30 days or more, the deduction for vehicle interest in a passive activity). See Temporary Regulations
lease expense may have to be reduced by an amount includible section 1.163-8T for the interest allocation rules.
in income called the inclusion amount. The corporation may Mutual savings banks, building and loan associations, and
have an inclusion amount if: cooperative banks can deduct the amounts paid or credited to
the accounts of depositors as dividends, interest, or earnings.
And the vehicle's FMV on See section 591.
the first day of the lease
The lease term began: exceeded: Do not deduct the following interest.
• Interest on indebtedness incurred or continued to purchase or
Cars (excluding trucks and vans) carry obligations if the interest is wholly exempt from income tax.
After 12/31/22 but before 1/1/24. . . . . . $60,000 See section 265(b) for special rules and exceptions for financial
institutions. Also, see section 265(b)(7) for a de minimis
After 12/31/21 but before 1/1/23. . . . . . $56,000 exception for financial institutions for certain tax-exempt bonds
After 12/31/20 but before 1/1/22. . . . . . $51,000 issued in 2009 and 2010.
After 12/31/17 but before 1/1/21. . . . . . $50,000 • For cash basis taxpayers, prepaid interest allocable to years
following the current tax year. For example, a cash basis
After 12/31/12 but before 1/1/18. . . . . . $19,000 calendar year taxpayer who in 2023 prepaid interest allocable to
Trucks and vans any period after 2023 can deduct only the amount allocable to
2023.
After 12/31/22 but before 1/1/24. . . . . . $60,000 • Interest and carrying charges on straddles. Generally, these
After 12/31/21 but before 1/1/23. . . . . . $56,000 amounts must be capitalized. See section 263(g).
After 12/31/20 but before 1/1/22. . . . . . $51,000 • Interest on debt allocable to the production of designated
property by a corporation for its own use or for sale. The
After 12/31/17 but before 1/1/21. . . . . . $50,000 corporation must capitalize this interest. Also, capitalize any
After 12/31/13 but before 1/1/18. . . . . . $19,500 interest on debt allocable to an asset used to produce the
property. See section 263A(f) and Regulations sections
After 12/31/09 but before 1/1/14. . . . . . $19,000 1.263A-8 through 1.263A-15 for definitions and more
information.
• Interest paid or incurred on any portion of an underpayment of
tax that is attributable to an understatement arising from an
undisclosed listed transaction or an undisclosed reportable
avoidance transaction (other than a listed transaction) entered
See Pub. 463, Travel, Gift, and Car Expenses, for instructions into in tax years beginning after October 22, 2004.
on figuring the inclusion amount. Special rules apply to:
• Forgone interest on certain below-market-rate loans (see
Note. The inclusion amount for lease terms beginning in 2024 section 7872).
will be published in the Internal Revenue Bulletin in early 2024. • Original issue discount (OID) on certain high yield discount
obligations. See section 163(e)(5) to determine the amount of
Line 17. Taxes and Licenses the deduction for OID that is deferred and the amount that is
Enter taxes paid or accrued during the tax year, but do not disallowed on a high yield discount obligation. The rules under
include the following. section 163(e)(5) do not apply to certain high yield discount
• Federal income taxes. obligations issued after August 31, 2008, and before January 1,
• Foreign or U.S. territory income taxes if a foreign tax credit is 2011. See section 163(e)(5)(F).
claimed. • Interest which is allocable to unborrowed policy cash values of
• Taxes not imposed on the corporation. life insurance, endowment, or annuity contracts issued after
• Taxes, including state or local sales taxes, that are paid or June 8, 1997. See section 264(f). Attach a statement showing
incurred in connection with an acquisition or disposition of the computation of the deduction.
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Limitation on deduction. Under section 163(j), business “100%” for “10%” ) over all other allowable charitable
interest expense is generally limited to the sum of business contributions. Any excess qualified conservation contributions
interest income, 30% of the adjusted taxable income, and floor can be carried over to the next 15 years, subject to the 100%
plan financing interest. The amount of any business interest limitation. See sections 170(b)(2)(B) and (C).
expense that is not allowed as a deduction for the tax year is Cash contributions. For contributions of cash, check, or other
carried forward to the following year. If section 163(j) applies, use monetary gifts (regardless of the amount), the corporation must
Form 8990 to figure the amount of business interest expense the maintain a bank record, or a receipt, letter, or other written
corporation can deduct for the current tax year and the amount communication from the donee organization indicating the name
that can be carried forward to the next year. See the Instructions of the organization, the date of the contribution, and the amount
for Form 8990. Also see Schedule K, Question 23 and Question of the contribution.
24, later.
Contributions of $250 or more. A corporation can deduct a
Line 19. Charitable Contributions contribution of $250 or more only if it gets a written
acknowledgment from the donee organization that shows the
Enter contributions or gifts actually paid within the tax year to or amount of cash contributed, describes any property contributed
for the use of charitable and governmental organizations (but not its value), and either gives a description and a good faith
described in section 170(c) and any unused contributions estimate of the value of any goods or services provided in return
carried over from prior years. Special rules and limits apply to for the contribution or states that no goods or services were
contributions to organizations conducting lobbying activities. See provided in return for the contribution. The acknowledgment
section 170(f)(9). must be obtained by the due date (including extensions) of the
Corporations reporting taxable income on the accrual method corporation's return, or, if earlier, the date the return is filed. Do
can elect to treat as paid during the tax year any contributions not attach the acknowledgment to the tax return, but keep it with
paid by the due date for filing the corporation’s tax return (not the corporation's records.
including extensions), if the contributions were authorized by the Contributions of property other than cash. If a corporation
board of directors during the tax year. Attach a declaration to the (other than a closely held or personal service corporation)
return stating that the resolution authorizing the contributions contributes property other than cash and claims over a $500
was adopted by the board of directors during the tax year. The deduction for the property, it must attach a statement to the
declaration must include the date the resolution was adopted. return describing the kind of property contributed and the
See section 170(a)(2)(B). method used to determine its FMV. Closely held corporations
Limitation on deduction. Generally, the total amount claimed and personal service corporations must complete Form 8283,
cannot be more than 10% of taxable income (line 30) computed Noncash Charitable Contributions, and attach it to their returns.
without regard to the following. All other corporations must generally complete and attach Form
• Any deduction for contributions. 8283 to their returns for contributions of property (other than
• The special deductions on line 29b. money) if the total claimed deduction for all property contributed
• The limitation under section 249 on the deduction for bond was more than $5,000. Special rules apply to the contribution of
premium. certain property. See the Instructions for Form 8283.
• Any net operating loss (NOL) carryback to the tax year under Qualified conservation contributions. Special rules apply
section 172. to qualified conservation contributions, including contributions of
• Any capital loss carryback to the tax year under section certain easements on buildings located in a registered historic
1212(a)(1). district. See section 170(h) and Pub. 526, Charitable
• Deduction for income attributable to domestic production Contributions.
activities of specified agricultural or horticultural cooperatives. Other special rules. The corporation must reduce its
Carryover. Charitable contributions over the 10% limitation deduction for contributions of certain ordinary income and
cannot be deducted for the tax year but can be carried over to capital gain property. See section 170(e).
the next 5 tax years. See the exception below for farmers and A larger deduction is allowed for certain contributions
ranchers and certain Native Corporations. including:
Special rules apply if the corporation has an NOL carryover to • Inventory and other property to certain organizations for use in
the tax year. In figuring the charitable contributions deduction for the care of the ill, needy, or infants (see section 170(e)(3)),
the current tax year, the 10% limit is applied using the taxable including qualified contributions of “apparently wholesome food”;
income after taking into account any deduction for the NOL. and
• Scientific equipment used for research to institutions of higher
To figure the amount of any remaining NOL carryover to later learning or to certain scientific research organizations (other than
years, taxable income must be modified (see section 172(b)). To by personal holding companies and service organizations). See
the extent that contributions are used to reduce taxable income section 170(e)(4).
for this purpose and increase an NOL carryover, a contributions
carryover is not allowed. See section 170(d)(2)(B). For more information on charitable contributions, including
substantiation and recordkeeping requirements, see section 170
Suspension of 10% limitation for farmers and ranchers and and the related regulations and Pub. 526. For other special rules
certain Native Corporations. Certain corporations can deduct that apply to corporations, see Pub. 542.
contributions of qualified conservation property without regard to
the general 10% limit. This applies to: Line 20. Depreciation
• A qualified farmer or rancher (as defined in section 170(b)(1)
(E)(v)) that does not have publicly traded stock; and Include on line 20 depreciation and the cost of certain property
• A Native Corporation (as defined in section 170(b)(2)(C)(iii)) that the corporation elected to expense under section 179 from
that contributes property which was land conveyed under the Form 4562. Include amounts not claimed on Form 1125-A or
Alaska Native Claims Settlement Act. elsewhere on the return. See Form 4562 and the Instructions for
Form 4562.
The total amount of the contribution claimed for the qualified
conservation property cannot exceed 100% of the excess of the
corporation's taxable income (as computed above substituting

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Line 21. Depletion • Certain costs of a qualified film, television, or live theatrical
If the corporation has an economic interest in mineral property or production commencing before January 1, 2026 (after
standing timber, it can take a deduction for depletion. More than December 31, 2015, and before January 1, 2026, for a live
one person can have an economic interest in the same mineral theatrical production). This deduction does not apply to any
deposit or timber. In the case of leased property, the depletion portion of the aggregate cost of the production above $15
deduction is divided between the lessor and the lessee. million. There is a higher allowance for production in certain
areas. See section 181 and the related regulations.
See sections 613 and 613A for percentage depletion rates Note. Certain film, television, or live theatrical productions
applicable to natural deposits. Also, see section 291 for the acquired and placed in service after September 27, 2017 (for
limitation on the depletion deduction for iron ore and coal which a deduction would have been allowable under section 181
(including lignite). without regard to the dollar limitation), are qualified property
eligible for the special depreciation allowance under section
Attach Form T (Timber), Forest Activities Schedule, if a 168(k). See the Instructions for Form 4562.
deduction for depletion of timber is taken. • Certain business start-up and organizational costs (discussed
earlier, under Limitations on Deductions).
Foreign intangible drilling costs and foreign exploration and • Reforestation costs. The corporation can elect to deduct up to
development costs must either be added to the corporation's $10,000 of qualifying reforestation expenses for each qualified
basis for cost depletion purposes or be deducted ratably over a timber property. The corporation can elect to amortize over 84
10-year period. See sections 263(i), 616, and 617 for details. months any amount not deducted. See the Instructions for Form
T (Timber).
Line 23. Pension, Profit-Sharing, etc., Plans • Insurance premiums.
Enter the deduction for contributions to qualified pension, • Legal and professional fees.
profit-sharing, or other funded deferred compensation plans. • Supplies used and consumed in the business.
Employers who maintain such a plan must generally file one of • Travel, meals, and entertainment expenses. Special rules
the forms listed below unless exempt from filing under apply (discussed later).
regulations or other applicable guidance, even if the plan is not a • Utilities.
qualified plan under the Internal Revenue Code. The filing • Ordinary losses from trade or business activities of a
requirement applies even if the corporation does not claim a partnership (from Schedule K-1 (Form 1065)). Do not offset
deduction for the current tax year. There are penalties for failure ordinary income against ordinary losses. Instead, include the
to file these forms on time and for overstating the pension plan income on line 10. Show the partnership's name, address, and
deduction. See sections 6652(e) and 6662(f). Also, see the EIN on a separate statement attached to this return. If the
instructions for the applicable form. amount is from more than one partnership, identify the amount
Form 5500, Annual Return/Report of Employee Benefit Plan. from each partnership.
• Any extraterritorial income exclusion (from Form 8873).
Form 5500-SF, Short Form Annual Return/Report of Small • Any net negative section 481(a) adjustment, or in the case of
Employee Benefit Plan. File this form instead of Form 5500 an eligible terminated S corporation, the ratable portion of any
generally if there were under 100 participants at the beginning of negative section 481(a) adjustment. See Section 481(a)
the plan year. adjustment, earlier.
• Dividends paid in cash on stock held by an employee stock
Note. Form 5500 and Form 5500-SF must be filed electronically ownership plan.
under the computerized ERISA Filing Acceptance System However, a deduction may be taken for these dividends only if,
(EFAST2). For more information, see the EFAST2 website at according to the plan, the dividends are:
www.EFAST.dol.gov. 1. Paid in cash directly to the plan participants or
Form 5500-EZ, Annual Return of A One-Participant (Owners/ beneficiaries;
Partners and Their Spouses) Retirement Plan or A Foreign Plan. 2. Paid to the plan, which distributes them in cash to the
File this form for a plan that only covers the owner (or the owner plan participants or their beneficiaries no later than 90 days after
and spouse) or a foreign plan that is required to file an annual the end of the plan year in which the dividends are paid;
return and does not file the annual return electronically on Form
5500-SF. See the Instructions for Form 5500-EZ. 3. At the election of such participants or their beneficiaries
(a) payable as provided under (1) or (2) above, or (b) paid to the
Line 24. Employee Benefit Programs plan and reinvested in qualifying employer securities; or
Enter contributions to employee benefit programs not claimed 4. Used to make payments on a loan described in section
elsewhere on the return (for example, insurance or health and 404(a)(9).
welfare programs) that are not an incidental part of a pension, See section 404(k) for more details and the limitation on certain
profit-sharing, etc., plan included on line 23. dividends.
Line 25. Energy Efficient Commercial Buildings Do not deduct expenses such as the following.
Deduction • Amounts paid or incurred to, or at the direction of, a
government or governmental entity for the violation, or
Complete and attach Form 7205 if claiming the energy efficient investigation or inquiry into the potential violation, of a law.
commercial building deduction. See the Instructions for Form However, see Fines or similar penalties, later.
7205 for more information. Also, see section 179D. • Any amount that is allocable to a class of exempt income. See
section 265(b) for exceptions.
Line 26. Other Deductions • Lobbying expenses. However, see exceptions discussed later.
Attach a statement, listing by type and amount, all allowable • Amounts paid or incurred for any settlement, payout, or
deductions that are not deductible elsewhere on Form 1120. attorney fees related to sexual harassment or sexual abuse, if
Enter the total on line 26. such payments are subject to a nondisclosure agreement. See
section 162(q).
Examples of other deductions include the following.
• Amortization. See Part VI of Form 4562.
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Travel, meals, and entertainment. Subject to limitations and of, a government or governmental entity for violating any law, or
restrictions discussed below, a corporation can deduct ordinary for the investigation or inquiry into the potential violation of a law,
and necessary travel, meal, and non-entertainment expenses except:
paid or incurred in its trade or business. Generally, entertainment • Amounts that constitute restitution or remediation of property,
expenses, membership dues, and facilities used in connection • Amounts paid to come into compliance with the law,
with these activities cannot be deducted. In addition, no • Amounts paid or incurred as the result of orders or
deduction is generally allowed for qualified transportation fringe agreements in which no government or governmental entity is a
benefits. Special rules apply to deductions for gifts, luxury water party, and
travel, and convention expenses. See section 274 and Pub. 463, • Amounts paid or incurred for taxes due.
for details. No deduction is allowed unless the amounts are specifically
Travel. The corporation cannot deduct travel expenses of any identified in the order or agreement and the corporation
individual accompanying a corporate officer or employee, establishes that the amounts were paid for that purpose. Also,
including a spouse or dependent of the officer or employee, any amount paid or incurred as reimbursement to the
unless: government for the costs of any investigation or litigation are not
• That individual is an employee of the corporation, and eligible for the exceptions and are nondeductible. See section
• That individual’s travel is for a bona fide business purpose and 162(f).
would otherwise be deductible by that individual. Lobbying expenses. Generally, lobbying expenses are not
Meals. Generally, the corporation can deduct only 50% of the deductible. These expenses include:
amount otherwise allowable for non-entertainment-related meal • Amounts paid or incurred in connection with influencing
expenses paid or incurred in its trade or business. Meals not federal, state, or local legislation; or
separately stated from entertainment are generally not • Amounts paid or incurred in connection with any
deductible. In addition (subject to exceptions under section communication with certain federal executive branch officials in
274(k)(2)): an attempt to influence the official actions or positions of the
• Meals must not be lavish or extravagant, and officials. See Regulations section 1.162-29 for the definition of
• An employee of the corporation must be present at the meal. “influencing legislation.”
See section 274(n)(3) for a special rule that applies to Dues and other similar amounts paid to certain tax-exempt
expenses for meals consumed by individuals subject to the organizations may not be deductible. If certain in-house lobbying
hours of service limits of the Department of Transportation. expenditures do not exceed $2,000, they are deductible.
Qualified transportation fringes (QTFs). Generally, no
deduction is allowed under section 274(a)(4) for QTFs provided Line 28. Taxable Income Before NOL Deduction
by employers to their employees. QTFs are defined in section and Special Deductions
132(f)(1) and include:
• Transportation in a commuter highway vehicle between the At-risk rules. Generally, special at-risk rules under section 465
employee's residence and place of employment, apply to closely held corporations (see Passive activity
• Any transit pass, and limitations, earlier) engaged in any activity as a trade or business
• Qualified parking. or for the production of income. These corporations may have to
See section 274 and Pub. 15-B, Employers Tax Guide to adjust the amount on line 28. (See below.)
Fringe Benefits, for details. The at-risk rules do not apply to:
Membership dues. The corporation can deduct amounts • Holding real property placed in service by the taxpayer before
paid or incurred for membership dues in civic or public service 1987;
organizations, professional organizations (such as bar and • Equipment leasing under sections 465(c)(4), (5), and (6); or
medical associations), business leagues, trade associations, • Any qualifying business of a qualified corporation under
chambers of commerce, boards of trade, and real estate boards. section 465(c)(7).
However, no deduction is allowed if a principal purpose of the However, the at-risk rules do apply to the holding of mineral
organization is to entertain or provide entertainment facilities for property.
members or their guests. In addition, corporations cannot deduct
If the at-risk rules apply, adjust the amount on this line for any
membership dues in any club organized for business, pleasure,
section 465(d) losses. These losses are limited to the amount for
recreation, or other social purpose. This includes country clubs,
which the corporation is at risk for each separate activity at the
golf and athletic clubs, airline and hotel clubs, and clubs
close of the tax year. If the corporation is involved in one or more
operated to provide meals under conditions favorable to
activities, any of which incurs a loss for the year, report the
business discussion.
losses for each activity separately. Attach Form 6198, At-Risk
Entertainment facilities. Generally, the corporation cannot Limitations, showing the amount at risk and gross income and
deduct an expense paid or incurred for a facility (such as a yacht deductions for the activities with the losses.
or hunting lodge) used for an activity usually considered
entertainment, amusement, or recreation. If the corporation sells or otherwise disposes of an asset or its
Amounts treated as compensation. Generally, the interest (either total or partial) in an activity to which the at-risk
corporation may be able to deduct otherwise nondeductible rules apply, determine the net profit or loss from the activity by
entertainment, amusement, or recreation expenses if the combining the gain or loss on the sale or disposition with the
amounts are treated as compensation to the recipient and profit or loss from the activity. If the corporation has a net loss, it
reported on Form W-2 for an employee or on Form 1099-NEC for may be limited because of the at-risk rules.
an independent contractor. Treat any loss from an activity not allowed for the tax year as a
However, if the recipient is an officer, director, beneficial deduction allocable to the activity in the next tax year.
owner (directly or indirectly), or other “specified individual” (as
defined in section 274(e)(2)(B) and Regulations section Line 29a. Net Operating Loss Deduction
1.274-9(b)), special rules apply. A corporation can use the NOL incurred in one tax year to
reduce its taxable income in another tax year. Enter on line 29a
Fines or similar penalties. Generally, no deduction is allowed the total NOL carryovers from other tax years, but do not enter
for fines or similar penalties paid or incurred to, or at the direction more than the corporation's taxable income (after special

16 Instructions for Form 1120

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deductions). Attach a statement showing the computation of the 2. 80% of the excess, if any, of taxable income determined
NOL deduction. Complete item 12 on Schedule K. without any NOL deduction, section 199A deduction, or section
250 deduction, over any NOL carryover to the tax year from tax
The following special rules apply. years beginning before January 1, 2018.
• If an ownership change (described in section 382(g)) occurs,
the amount of the taxable income of a loss corporation that may An exception applies for NOLs of insurance companies other
be offset by the pre-change NOL carryovers may be limited. See than life insurance companies. The 80% taxable income limit
section 382 and the related regulations. A loss corporation must does not apply to these entities. See sections 172(b) and (f).
include the information statement as provided in Regulations
section 1.382-11(a) with its income tax return for each tax year Merchant Marine capital construction fund. To take a
that it is a loss corporation in which an ownership shift, equity deduction for amounts contributed to a capital construction fund
structure shift, or other transaction described in Temporary (CCF), reduce the amount that would otherwise be entered on
Regulations section 1.382-2T(a)(2)(i) occurs. If the corporation line 30 by the amount of the deduction. On the dotted line next to
makes the closing-of-the-books election, see Regulations the entry space, enter “CCF” and the amount of the deduction.
section 1.382-6(b). For more information, see section 7518.

The limitations under section 382 do not apply to certain Line 32
ownership changes after February 17, 2009, made pursuant to a
restructuring plan under the Emergency Economic Stabilization Reserved for future use.
Act of 2008. See section 382(n).
Line 34. Estimated Tax Penalty
For guidance in applying section 382 to loss corporations Generally, the corporation does not have to file Form 2220
whose instruments were acquired by Treasury under certain because the IRS can figure the penalty amount, if any, and bill
programs under the Emergency Economic Stabilization Act of the corporation. However, even if the corporation does not owe
2008, see Notice 2010-2, 2010-2 I.R.B. 251. the penalty, it must complete and attach Form 2220 if:
• If a corporation acquires control of another corporation (or The annualized income or adjusted method is used, or
acquires its assets in a reorganization), the amount of •
pre-acquisition losses that may offset recognized built-in gain • The corporation is a large corporation (as defined in the
Instructions for Form 2220) computing its first required
may be limited (see section 384). installment based on the prior year's tax.
• If a corporation elects the alternative tax on qualifying
shipping activities under section 1354, no deduction is allowed If Form 2220 is attached, check the box on line 34, and enter
for an NOL attributable to the qualifying shipping activities to the any penalty on this line.
extent that the loss is carried forward from a tax year preceding
the first tax year for which the alternative tax election was made. If the corporation's tax liability includes a CAMT liability,
See section 1358(b)(2). ! the corporation must complete and attach Form 2220.
CAUTION The affected corporation must also include an amount of
For more details on the NOL deduction, see section 172 and estimated tax penalty on Form 1120, line 34, even if that amount
the Instructions for Form 1139. is zero. Failure to follow these instructions could result in the
corporation receiving a penalty notice that will require an
Line 29b. Special Deductions abatement request to apply any penalty relief. See Notice
See the instructions for Schedule C. 2023-42.

Line 30. Taxable Income Line 35. Amount Owed
Minimum taxable income. The corporation's taxable income If the corporation cannot pay the full amount of tax owed, it can
cannot be less than the largest of the following amounts. apply for an installment agreement online. The corporation can
• The inversion gain of the corporation for the tax year, if the apply for an installment agreement online if:
corporation is an expatriated entity or a partner in an expatriated • It cannot pay the full amount shown on line 35,
entity. See section 7874(a). • The total amount owed is $25,000 or less, and
• The sum of the corporation's excess inclusions from its • The corporation can pay the liability in full in 24 months.
residual interest in a REMIC from Schedules Q (Form 1066), To apply using the Online Payment Agreement Application, go to
line 2c, and the corporation's taxable income determined solely IRS.gov/OPA.
with respect to its ownership and high-yield interests in FASITs. Under an installment agreement, the corporation can pay
See sections 860E(a) and 860J (repealed). what it owes in monthly installments. There are certain
Net operating loss (NOL). If line 30 (figured without regard to conditions that must be met to enter into and maintain an
the items listed above under minimum taxable income) is zero or installment agreement, such as paying the liability within 24
less, the corporation may have an NOL that can be carried back months and making all required deposits and timely filing tax
or forward as a deduction to other tax years. returns during the length of the agreement.
Only farming losses and losses of an insurance company If the installment agreement is accepted, the corporation will
(other than a life insurance company) can be carried back. The be charged a fee and it will be subject to penalties and interest
carryback period for these losses is 2 years. For NOLs that can on the amount of tax not paid by the due date of the return.
be carried back, the corporation can elect to waive the carryback
period and instead carry the NOL forward to future tax years. Line 37
See the instructions for Schedule K, Item 11 for information Enter the amount of any overpayment that should be refunded or
on making the election to waive the carryback period. See the applied to next year's estimated tax.
Instructions for Form 1139 for other special rules and elections.
The NOL deduction for tax year 2023 cannot exceed the Note. This election to apply some or all of the overpayment
aggregate amount of NOLs arising in tax years beginning before amount to the corporation's 2024 estimated tax cannot be
January 1, 2018, carried to such year plus the lesser of: changed at a later date.
1. The aggregate amount of NOLs arising in tax years Direct deposit of refund. If the corporation wants its refund
beginning after December 31, 2017, carried to such tax year; or directly deposited into its checking or savings account at any
Instructions for Form 1120 17

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U.S. bank or other financial institution instead of having a check Line 3, Columns (b) and (c)
sent to the corporation, complete Form 8050, Direct Deposit of Dividends received on certain debt-financed stock acquired after
Corporate Tax Refund, and attach it to the corporation's tax July 18, 1984, are not entitled to the full 50% or 65%
return. dividends-received deduction under section 243 or 245(a). The
50% or 65% deduction is reduced by a percentage that is related
Schedule C. Dividends, Inclusions, to the amount of debt incurred to acquire the stock. See section
246A. Also, see section 245(a) before making this computation
and Special Deductions for an additional limitation that applies to certain dividends
For purposes of the 20% ownership test on lines 1 through 7, the received from foreign corporations. Attach a statement to Form
percentage of stock owned by the corporation is based on voting 1120 showing how the amount on line 3, column (c), was figured.
power and value of the stock. Preferred stock described in
section 1504(a)(4) is not taken into account. Line 4, Column (a)
Consolidated returns. Corporations filing a consolidated Enter dividends received on preferred stock of a
return should see Regulations sections 1.1502-13, 1.1502-26, less-than-20%-owned public utility that is subject to income tax
and 1.1502-27 before completing Schedule C. and is allowed the 23.3% deduction provided in sections 244
and 247 (as affected by P.L.113-295, Div. A, section 221(a)(41)
Corporations filing a consolidated return must not report as (A), Dec. 19, 2014, 128 Stat. 4043) for dividends paid.
dividends on Schedule C any amounts received from
corporations within the consolidated group. Such dividends are Line 5, Column (a)
eliminated in consolidation rather than offset by the
dividends-received deduction. Enter dividends received on preferred stock of a
20%-or-more-owned public utility that is subject to income tax
Line 1, Column (a) and is allowed the 26.7% deduction provided in sections 244
and 247 (as affected by P.L.113-295, Div. A, section 221(a)(41)
Enter dividends (except those received on certain debt-financed (A), Dec. 19, 2014, 128 Stat. 4043) for dividends paid.
stock acquired after July 18, 1984—see section 246A) that are:
• Received from less-than-20%-owned domestic corporations Line 6, Column (a)
subject to income tax, and
• Qualified for the 50% deduction under section 243(a)(1). Enter the U.S.-source portion of dividends that:
• Are received from less-than-20%-owned foreign corporations,
Also, include on line 1 the following. and
• Taxable distributions from an IC-DISC or former DISC that are • Qualify for the 50% deduction under section 245(a). To qualify
designated as eligible for the 50% deduction and certain for the 50% deduction, the corporation must own at least 10% of
dividends of Federal Home Loan Banks. See section 246(a)(2). the stock of the foreign corporation by vote and value.
• Dividends (except those received on certain debt-financed
stock acquired after July 18, 1984) from a regulated investment Also, include dividends received from a
company (RIC). The amount of dividends eligible for the less-than-20%-owned FSC that:
dividends-received deduction under section 243 is limited by • Are attributable to income treated as effectively connected
section 854(b). The corporation should receive a notice from the with the conduct of a trade or business within the United States
RIC specifying the amount of dividends that qualify for the (excluding foreign trade income), and
deduction. • Qualify for the 50% deduction under section 245(c)(1)(B).

Report so-called dividends or earnings received from mutual Line 7, Column (a)
savings banks, etc., as interest. Do not treat them as dividends. Enter the U.S.-source portion of dividends that:
• Are received from 20%-or-more-owned foreign corporations,
Line 2, Column (a) and
Enter on line 2: • Qualify for the 65% deduction under sections 243 and 245(a).
• Dividends (except those received on certain debt-financed
stock acquired after July 18, 1984) that are received from Also, include dividends received from a 20%-or-more-owned
20%-or-more-owned domestic corporations subject to income FSC that:
tax and that are subject to the 65% deduction under section • Are attributable to income treated as effectively connected
243(c), and with the conduct of a trade or business within the United States
• Taxable distributions from an IC-DISC or former DISC that are (excluding foreign trade income), and
considered eligible for the 65% deduction. • Qualify for the 65% deduction under section 245(c)(1)(B).

Line 3, Column (a) Line 8, Column (a)
Enter the following. Enter dividends received from wholly owned foreign subsidiaries
• Dividends received on certain debt-financed stock acquired that are eligible for the 100% deduction under section 245(b).
after July 18, 1984, from domestic and foreign corporations
subject to income tax that would otherwise be subject to the In general, the deduction under section 245(b) applies to
dividends-received deduction under section 243(a)(1), 243(c), or dividends paid out of the earnings and profits of a foreign
245(a). Generally, debt-financed stock is stock that the corporation for a tax year during which:
corporation acquired by incurring a debt (for example, it • All of its outstanding stock is directly or indirectly owned by
borrowed money to buy the stock). the domestic corporation receiving the dividends, and
• Dividends received from a RIC on debt-financed stock. The • All of its gross income from all sources is effectively
amount of dividends eligible for the dividends-received connected with the conduct of a trade or business within the
deduction is limited by section 854(b). The corporation should United States.
receive a notice from the RIC specifying the amount of dividends
that qualify for the deduction. Line 9, Column (c)
Generally, line 9, column (c), cannot exceed the amount from the
Worksheet for Schedule C, line 9. However, in a year in which an

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NOL occurs, this limitation does not apply even if the loss is section 245A deduction pursuant to Regulations section
created by the dividends-received deduction. See sections 1.245A-5(g)(2). Include such amounts on line 16c.)
172(d) and 246(b).
Line 16b, Column (a)
Line 10, Columns (a) and (c) Enter the total subpart F inclusions attributable to tiered hybrid
Small business investment companies operating under the Small dividends. This should equal the sum of the amounts reported by
Business Investment Act of 1958 must enter dividends that are the U.S. shareholder on Form(s) 5471, Schedule I, line 1b.
received from domestic corporations subject to income tax even
though a deduction is allowed for the entire amount of those Line 16c, Column (a)
dividends. To claim the 100% deduction on line 10, column (c), Enter all other amounts included in income under section 951.
the company must file with its return a statement that it was a This should equal the sum of the amounts reported by the U.S.
federal licensee under the Small Business Investment Act of shareholder on Form(s) 5471, Schedule I, lines 1(c) through
1958 at the time it received the dividends. 1(h), 2, and 4.

Line 11, Columns (a) and (c) Line 17, Column (a)
Enter only dividends that qualify under section 243(b) for the Enter amounts included in income under section 951A. See
100% dividends-received deduction described in section 243(a) Form 8992, Part II, line 5, and the Instructions for Form 8992.
(3). Corporations taking this deduction are subject to the Also, if applicable, attach Form(s) 5471.
provisions of section 1561.
Note. Consider the applicability of section 951A with respect to
The 100% deduction does not apply to affiliated group CFCs owned by domestic partnerships in which the corporation
members that are joining in the filing of a consolidated return. has an interest.

Line 12, Column (a) Line 18, Column (a)
Enter dividends from FSCs that are attributable to foreign trade Include gross-up for taxes deemed paid under section 960.
income and that are eligible for the 100% deduction provided in
section 245(c)(1)(A). Line 19, Column (a)
Line 13, Column (a) Enter taxable distributions from an IC-DISC or former DISC that
are designated as not eligible for a dividends-received
Enter the foreign-source portion of dividends that: deduction.
• Are received from specified 10%-owned foreign corporations
(as defined in section 245A(b)), including, for example, gain from No deduction is allowed under section 243 for a dividend from
the sale of stock of a foreign corporation that is treated as a an IC-DISC or former DISC (as defined in section 992(a)) to the
dividend under sections 1248(a) and (j); and extent the dividend:
• Qualify for the section 245A deduction. • Is paid out of the corporation's accumulated IC-DISC income
or previously taxed income, or
Line 14, Column (a) • Is a deemed distribution under section 995(b)(1).
Enter the foreign dividends not reportable on line 3, 6, 7, 8, 11,
12, or 13 of column (a). Line 20, Column (a)
Include the following.
Include on line 14 the foreign-source portion of any dividend 1. Dividends (other than capital gain distributions reported
that does not qualify for the section 245A deduction (for on Schedule D (Form 1120), Capital Gains and Losses, and
example, hybrid dividends within the meaning of section exempt-interest dividends) that are received from RICs and that
245A(e), ineligible amounts of dividends within the meaning of are not subject to the 50% deduction.
Regulations section 1.245A-5(b), dividends that fail to meet the
holding period requirement under section 246(c)(5), etc.). 2. Dividends from tax-exempt organizations.
3. Dividends (other than capital gain distributions) received
Also, include on line 14 the corporation's share of from a REIT that, for the tax year of the trust in which the
distributions from a section 1291 fund from Form 8621, to the dividends are paid, qualifies under sections 856 through 860.
extent that the amounts are taxed as dividends under section
301. See Form 8621 and the Instructions for Form 8621. 4. Dividends not eligible for a dividends-received deduction,
which include the following.
Attach a statement identifying the amount of each dividend a. Dividends received on any share of stock held for less
reported on line 14 and the provision pursuant to which a than 46 days during the 91-day period beginning 45 days before
deduction is not allowed with respect to such dividend. the ex-dividend date. When counting the number of days the
corporation held the stock, you cannot count certain days during
Line 15, Column (a) which the corporation's risk of loss was diminished. See section
Reserved for future use. 246(c)(4) and Regulations section 1.246-5 for more details.
b. Dividends received on any share of preferred stock which
Line 15, Column (c) are attributable to periods totaling more than 366 days if such
Reserved for future use. stock was held for less than 91 days during the 181-day period
that began 90 days before the ex-dividend date. When counting
Line 16a, Column (a) the number of days the corporation held the stock, you cannot
Enter the foreign-source portion of any subpart F inclusions count certain days during which the corporation's risk of loss was
attributable to the sale or exchange by a CFC of stock in another diminished. See section 246(c)(4) and Regulations section
foreign corporation described in section 964(e)(4). This should 1.246-5 for more details. Preferred dividends attributable to
equal the sum of the amounts reported by the U.S. shareholder periods totaling less than 367 days are subject to the 46-day
on Form(s) 5471, Schedule I, line 1a. (Do not include on line 16a holding period rule discussed above.
any portion of such subpart F inclusion that is not eligible for the
Instructions for Form 1120 19

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                      Worksheet for Schedule C, line 9                                                                                                  Keep for Your Records

   1.  Refigure Form 1120, page 1, line 28, without any adjustment under section 1059 and without any capital loss 
       carryback to the tax year under section 1212(a)(1) .           . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1.  
   2.  Complete lines 10, 11, 12, and 13, column (c), and enter the total here .                . . . . . . . . . . . . . . . . . . . . . . . . . . .   2.  
   3.  Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3.  
   4.  Multiply line 3 by 65% (0.65) .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.  
   5.  Add lines 2, 5, 7, and 8, column (c), and the part of the deduction on line 3, column (c), that is attributable to 
       dividends from 20%-or-more-owned corporations .              . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5.  
   6.  Enter the smaller of line 4 or line 5. If line 5 is greater than line 4, stop here; enter the amount from line 6 on line 9, 
       column (c), and do not complete the rest of this worksheet .             . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6.  
   7.  Enter the total amount of dividends from 20%-or-more-owned corporations that are included on lines 2, 3, 5, 7, 
       and 8, column (a)  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.  
   8.  Subtract line 7 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.  
   9.  Multiply line 8 by 50% (0.50) .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9.  
   10. Subtract line 5 from line 9, column (c) .    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10.  
   11. Enter the smaller of line 9 or line 10 .   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11.  
   12. Dividends-received deduction after limitation (sec. 246(b)). Add lines 6 and 11. Enter the result here and on 
       line 9, column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.  

c. Dividends on any share of stock to the extent the                                              department. Enter the combined tax on line 1. Attach Form 
corporation is under an obligation (including a short sale) to                                    1120-L as a schedule (and identify it as such), together with the 
make related payments with respect to positions in substantially                                  annual statements and schedules required to be filed with Form 
similar or related property.                                                                      1120-L. See Regulations section 1.6012-2(c)(1)(ii).
5. Any other taxable dividend income not properly reported                                            Exception for insurance companies filing their federal 
elsewhere on Schedule C.                                                                          income tax returns electronically.                    If an insurance company 
                                                                                                  files its income tax return electronically, it should not include the 
If patronage dividends or per-unit retain allocations are                                         annual statements and schedules required to be filed with Form 
included on line 20, identify the total of these amounts in a                                     1120-L. However, such statements must be available at all times 
statement attached to Form 1120.                                                                  for inspection by the IRS and retained for so long as such 
                                                                                                  statements may be material in the administration of any Internal 
Line 21, Column (c)                                                                               Revenue law.
Section 247 (as affected by P.L.113-295, Div. A, section 221(a)                                   Deferred tax under section 1291.                      If the corporation was a 
(41)(A), Dec. 19, 2014, 128 Stat. 4043) allows public utilities a                                 shareholder in a PFIC and received an excess distribution or 
deduction of 40% of the smaller of (a) dividends paid on their                                    disposed of its investment in the PFIC during the year, it must 
preferred stock during the tax year, or (b) taxable income                                        include the increase in taxes due under section 1291(c)(2) (from 
computed without regard to this deduction. In a year in which an                                  Form 8621) in the total for line 1. On the dotted line next to line 1, 
NOL occurs, compute the deduction without regard to section                                       enter “Section 1291” and the amount.
247(a)(1)(B). 
                                                                                                        Do not include on line 1 any interest due under section 
Line 22, Column (c)                                                                               1291(c)(3). Instead, include the amount of interest owed on 
                                                                                                  Schedule J, Part I, line 9z.
Enter the section 250 deduction claimed for foreign-derived 
intangible income (FDII) and global intangible low-taxed income                                         For more information on reporting the deferred tax and 
(GILTI). This should equal the sum of the amounts on Form                                         interest, see the Instructions for Form 8621.
8993, Part III, lines 28 and 29.                                                                  Increase in tax attributable to partner's audit liability under 
                                                                                                  section 6226.             If the corporation is filing Form 8978, Partner’s 
Schedule J.                                                                                       Additional Reporting Year Tax, to report adjustments shown on 
                                                                                                  Form 8986, Push Out to Partners under IRC 6226(a)(2), they 
Tax Computation and Payment                                                                       received from partnerships that have been audited and have 
                                                                                                  elected to push out imputed underpayments to their partners, 
Part I—Tax Computation                                                                            include any increase in taxes due from Form 8978, line 14, in the 
                                                                                                  total for Form 1120, Schedule J, line 1. On the dotted line next to 
Line 1                                                                                            line 1, enter "FROM FORM 8978" and the amount. Attach Form 
                                                                                                  8978. If Form 8978, line 14, shows a decrease in tax, see the 
Multiply taxable income (page 1, line 30) by 21% (0.21). Enter                                    instructions for Schedule J, line 6.
this amount on line 1.
                                                                                                  Additional tax under section 197(f).                  A corporation that elects 
Mutual savings bank conducting life insurance business.                                           to recognize gain and pay tax on the sale of a section 197 
The tax under section 594 consists of the sum of (a) a partial tax                                intangible under the related person exception to the 
computed on Form 1120 on the taxable income of the bank,                                          anti-churning rules should include any additional tax due in the 
determined without regard to income or deductions allocable to                                    total for line 1. On the dotted line next to line 1, enter “Section 
the life insurance department, and (b) a partial tax on the taxable                               197” and the amount. See section 197(f)(9)(B)(ii).
income computed on Form 1120-L of the life insurance 

20                                                                                                                                                      Instructions for Form 1120

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Line 2 the end of the 5-year recapture period under section 50(a), enter
the increase in tax from Form 4255. See the Instructions for
If the corporation had gross receipts of at least $500 million in Form 4255.
any 1 of the 3 tax years preceding the current tax year, complete Line 9b. Recapture of low-income housing credit. If the
and attach Form 8991. Enter on line 2 the base erosion minimum corporation disposed of property (or there was a reduction in the
tax amount from Form 8991, Part IV, line 5e. See section 59A qualified basis of the property) for which it took the low-income
and the Instructions for Form 8991. Also, see Schedule K, housing credit, and the corporation did not follow the procedures
Question 22, later. that would have prevented recapture of the credit, it may owe a
tax. See Form 8611.
Line 3 Line 9c. Interest due under the look-back method—com-
pleted long-term contracts. If the corporation used the
Enter on line 3 the amount from Form 4626, Alternative Minimum percentage-of-completion method under section 460(b) for
Tax—Corporations, Part II, line 13, if applicable. See the certain long-term contracts, figure any interest due or to be
Instructions for Form 4626. refunded using the look-back method, described in section
460(b)(2). Use Form 8697 to figure any interest due or to be
Line 5 refunded. See the Instructions for Form 8697. Include any
interest due on line 9c.
Line 5a. To find out when a corporation can take the credit for
payment of income tax to a foreign country or U.S. territory, see Line 9d. Interest due under the look-back method—income
Form 1118, Foreign Tax Credit—Corporations. forecast method. If the corporation used the income forecast
method to depreciate property, it must figure any interest due or
Line 5b. Enter any qualified electric vehicle passive activity to be refunded using the look-back method, described in section
credits from prior years allowed for the current tax year from 167(g)(2). Use Form 8866 to figure any interest due or to be
Form 8834, Qualified Electric Vehicle Credit, line 7. Attach Form refunded. See the Instructions for Form 8866. Include any
8834. interest due on line 9d.
Line 5c. Use Form 3800 to claim any general business credits. Line 9e. Alternative tax on qualifying shipping activities.
Enter on line 5c the allowable credit from Form 3800, Part II, Enter any alternative tax on qualifying shipping activities from
line 38. See the Instructions for Form 3800. Form 8902.
Line 5d. Enter any allowable credit from Form 8827, Credit for Line 9f. Interest/tax due under section 453A(c). Include any
Prior Year Minimum Tax—Corporations. Complete and attach interest on deferred tax attributable to certain nondealer
Form 8827. installment obligations (section 453A(c)).
Line 5e. Enter the allowable credits from Form 8912, Credit to Line 9g. Interest/tax due under section 453(l). Include any
Holders of Tax Credit Bonds, line 12. interest on deferred tax attributable to dealer installment
obligations (section 453(l)).
Line 6 Line 9z. Other. Include on line 9z additional taxes and interest
such as the following. Attach a statement showing the
Add lines 5a through 5e. Enter the total on line 6. computation of each item included in the total for line 9z and
Decrease attributable to partner's audit liability under sec- identify the applicable Code section and the type of tax or
tion 6226. If the corporation is filing Form 8978 to report interest.
adjustments shown on Form 8986 they received from • Recapture of Indian employment credit. Generally, if an
partnerships that have been audited and have elected to push employer terminates the employment of a qualified employee
out imputed underpayments to their partners, include any less than 1 year after the date of initial employment, any Indian
decrease in taxes due (negative amount) from Form 8978, employment credit allowed for a prior tax year because of wages
line 14, in the total for Form 1120, Schedule J, line 6. On the paid or incurred to that employee must be recaptured. For
dotted line next to line 6, enter "FROM FORM 8978" and the details, see Form 8845 and section 45A.
amount. Attach Form 8978. If Form 8978, line 14, shows an • Recapture of new markets credit (see Form 8874 and Form
increase in tax, see the instructions for Schedule J, line 1. 8874-B, Notice of Recapture Event for New Markets Credit).
• Recapture of employer-provided childcare facilities and
services credit (see Form 8882).
Line 8 • Tax and interest on a nonqualified withdrawal from a capital
construction fund (section 7518(g)).
A corporation is taxed as a personal holding company under • Interest due on deferred gain (section 1260(b)).
section 542 if: • Interest due under section 1291(c)(3). See Form 8621 and the
• At least 60% of its adjusted ordinary gross income for the tax Instructions for Form 8621.
year is personal holding company income, and • Recapture of section 45Q carbon oxide sequestration credit
• At any time during the last half of the tax year more than 50% (see Form 8933, Part III, line 22).
in value of its outstanding stock is directly or indirectly owned by
five or fewer individuals.
Line 11
See Schedule PH (Form 1120) for definitions and details on
how to figure the tax. Include any deferred tax on the termination of a section 1294
election applicable to shareholders in a qualified electing fund in
the amount entered on line 11.
Line 9
Subtract the following amounts from the total for line 11.
Include any of the following taxes and interest.
• Deferred tax on the corporation's share of undistributed
Line 9a. Recapture of investment credit. If the corporation earnings of a qualified electing fund. See the Instructions for
disposed of investment credit property or changed its use before Form 8621.
Instructions for Form 1120 21

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• Deferred LIFO recapture tax (section 1363(d)). This tax is the investment company (RIC) or a real estate investment trust
part of the LIFO recapture tax that will be deferred and paid with (REIT) on undistributed long-term capital gains included in the
Form 1120-S in the future. To figure the deferred tax, first figure corporation's income. Attach Form 2439.
the total LIFO recapture tax. Follow the steps below to figure the
Line 20b. Credit for federal tax on fuels. Enter the total
total LIFO recapture tax and the deferred amount. Also, see
income tax credit claimed on Form 4136, Credit for Federal Tax
Line 10. Other Income, earlier.
Paid on Fuels. Attach Form 4136.
Step 1. Figure the tax on the corporation's income including Line 20c. Reserved for future use.
the LIFO recapture amount. Complete Schedule J, Part I, lines 1
through 10. Line 20z. Other. Include on line 20z any other refundable credit
the corporation is claiming, including the following. Attach a
Step 2. Using a separate worksheet, complete Schedule J statement listing the type of credit and the amount of the credit.
again, but do not include the LIFO recapture amount in the • Credit for tax withheld under Chapter 3 or 4 of the Internal
corporation's taxable income. Revenue Code that is shown on Form 1042-S, Form 8805, or
Form 8288-A. Attach the applicable form.
Step 3. Compare the tax in Step 2 to the tax in Step 1. The • Credit for tax on ozone-depleting chemicals. See section
difference between the two is the LIFO recapture tax. 4682(g)(2).
• Credit under section 960(c) (section 960(b) for pre-2018 tax
Step 4. Multiply the amount figured in Step 3 by 75% (0.75). years of foreign corporations). If an increase in the limitation
The result is the deferred LIFO recapture tax. under section 960(c) (section 960(b) (pre-2018)) exceeds the
total tax on Schedule J, Part I, line 11, for the tax year, the
How to report. Attach a statement showing the computation of amount of the excess is deemed an overpayment of tax for the
each item included in, or subtracted from, the total for line 11. On tax year. See section 960(c) (section 960(b) (pre-2018)) for more
the dotted line next to line 11, specify (a) the applicable Code information regarding the circumstances under which such an
section, (b) the type of tax, and (c) enter the amount of tax. For excess arises.
example, if the corporation is deferring a $100 LIFO recapture
tax, subtract this amount from the total on line 11, then enter
“Section 1363—Deferred Tax—$100” on the dotted line next to Line 22. Elective Payment Election Amount From
line 11. Form 3800
Part II—Payments and Refundable Credits Enter on line 22 the total net elective payment election amount
from Form 3800, Part III, line 6, column (i). See the Instructions
Line 12 for Form 3800.
Reserved for future use.
Schedule K.
Line 14 Other Information
Enter any estimated tax payments the corporation made for the Complete all items that apply to the corporation.
current tax year.
Question 2
Beneficiaries of trusts. If the corporation is the beneficiary of a See the list of Principal Business Activity Codes later in the
trust, and the trust makes a section 643(g) election to credit its instructions. Using the list of codes and activities, determine
estimated tax payments to its beneficiaries, include the from which activity the corporation derives the highest
corporation's share of the payment in the total for line 14. Enter percentage of its total receipts. Enter on lines 2a, 2b, and 2c the
“T” and the amount of the payment on the dotted line next to the principal business activity code number, the corporation's
entry space. business activity, and a description of the principal product or
service of the corporation. For nonstore retailers, select the PBA
Line 15 code by the primary product that your establishment sells. For
example, establishments primarily selling prescription and
If the corporation overpaid estimated tax, it may be able to get a non-prescription drugs, select PBA code 456110 Pharmacies &
quick refund by filing Form 4466. The overpayment must be at Drug Retailers.
least 10% of the corporation's expected income tax liability and
at least $500. File Form 4466 after the end of the corporation's Question 3
tax year, and no later than the due date for filing the corporation’s Check the “Yes” box for question 3 if:
tax return (not including extensions). Form 4466 must be filed • The corporation is a subsidiary in an affiliated group (defined
before the corporation files its tax return. See the instructions for below), but is not filing a consolidated return for the tax year with
Form 4466. that group; or
• The corporation is a subsidiary in a parent–subsidiary
Line 18 controlled group. For a definition of a parent–subsidiary
controlled group, see the Instructions for Schedule O (Form
If the corporation had federal income tax withheld from any 1120).
payments it received because, for example, it failed to give the
payer its correct EIN or was otherwise subjected to backup Any corporation that meets either of the requirements above
withholding, include the amount withheld in the total for line 18. should check the “Yes” box. This applies even if the corporation
is a subsidiary member of one group and the parent corporation
of another.
Line 20. Refundable Credits
Note. If the corporation is an “excluded member” of a controlled
Line 20a. Credit from Form 2439. Enter any credit from Form group (see definition in the Instructions for Schedule O (Form
2439, Notice to Shareholder of Undistributed Long-Term Capital
Gains, for the corporation's share of the tax paid by a regulated

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1120)), it is still considered a member of a controlled group for Question 5b
this purpose.
Affiliated group. An affiliated group is one or more chains of List each foreign or domestic partnership in which the
includible corporations (as defined in section 1504(b)) corporation, at the end of the tax year, owned directly an interest
connected through stock ownership with a common parent of 20% or more, or owned, directly or indirectly, an interest of
corporation. See section 1504(a). The common parent must be 50% or more in the profit, loss, or capital of the partnership. List
an includible corporation and the following requirements must be each trust in which the corporation, at the end of the tax year,
met. owned directly an interest of 20% or more, or owned, directly or
1. The common parent must own directly stock that indirectly, an interest of 50% or more in the trust beneficial
represents at least 80% of the total voting power and at least interest. Indicate the name, EIN (if any), country of organization,
80% of the total value of the stock of at least one of the other and the maximum percentage interest owned, directly or
includible corporations. indirectly, in the profit, loss, or capital of the partnership at the
end of the partnership tax year, or, for a trust, the percentage
2. Stock that represents at least 80% of the total voting interest owned in the trust beneficial interest. List a partnership
power and at least 80% of the total value of the stock of each of or trust owned through a disregarded entity rather than the
the other corporations (except for the common parent) must be disregarded entity.
owned directly by one or more of the other includible
corporations. Maximum percentage owned in partnership profit, loss, or
capital. For the purposes of question 5b, the term “maximum
For this purpose, the term “stock” generally does not include percentage owned” means the highest percentage of interest in
any stock that (a) is nonvoting, (b) is nonconvertible, (c) is limited a partnership's profit, loss, or capital as of the end of the
and preferred as to dividends and does not participate partnership's tax year, as determined under the partnership
significantly in corporate growth, and (d) has redemption and agreement, when taking into account the constructive ownership
liquidation rights that do not exceed the issue price of the stock rules, earlier. If the partnership agreement does not express the
(except for a reasonable redemption or liquidation premium). partner's share of profit, loss, and capital as fixed percentages,
See section 1504(a)(4). use a reasonable method in arriving at the percentage items for
the purposes of completing question 5b. Such method must be
consistent with the partnership agreement. The method used to
Question 4. Constructive Ownership of the compute a percentage share of profit, loss, and capital must be
Corporation applied consistently from year to year. Maintain records to
For purposes of question 4, the constructive ownership rules of support the determination of the share of profits, losses, and
section 267(c) (excluding section 267(c)(3)) apply to ownership capital.
of interests in corporate stock and ownership of interests in the Example. Corporation A owns, directly, a 50% interest in the
profit, loss, or capital of a partnership. If the corporation checked profit, loss, or capital of Partnership B. Corporation A also owns,
“Yes” to question 4a or 4b, complete and attach Schedule G directly, a 15% interest in the profit, loss, or capital of Partnership
(Form 1120), Information on Certain Persons Owning the C and owns, directly, 15% of the voting stock of Corporation D.
Corporation's Voting Stock. Partnership B owns, directly, a 70% interest in the profit, loss, or
capital of Partnership C and owns, directly, 70% of the voting
Question 5. Constructive Ownership of Other stock of Corporation D. Corporation A owns, indirectly, through
Entities Partnership B, a 35% interest (50% of 70%) in the profit, loss, or
capital of Partnership C and owns, indirectly, 35% of the voting
For purposes of determining the corporation's constructive stock of Corporation D. Corporation A owns, directly or indirectly,
ownership of other entities, the constructive ownership rules of a 50% interest in the profit, loss, or capital of Partnership C (15%
section 267(c) (excluding section 267(c)(3)) apply to ownership directly and 35% indirectly), and owns, directly or indirectly, 50%
of interests in partnerships and trusts as well as corporate stock. of the voting stock of Corporation D (15% directly and 35%
Generally, if an entity (a corporation, partnership, or trust) is indirectly).
owned, directly or indirectly, by or for another entity (corporation,
partnership, estate, or trust), the owned entity is considered to Corporation A reports in its answer to question 5a that it
be owned proportionately by or for the owners (shareholders, owns, directly or indirectly, 50% of the voting stock of
partners, or beneficiaries) of the owning entity. Corporation D. Corporation A reports in its answer to question 5b
that it owns, directly, an interest of 50% in the profit, loss, or
capital of Partnership B and owns, directly or indirectly, 50% of
Question 5a the profit, loss, or capital of Partnership C.

List each foreign or domestic corporation not included on Form Question 7
851, Affiliations Schedule, in which the corporation, at the end of
the tax year, owned directly 20% or more, or owned, directly or Check the “Yes” box if one foreign person owned at least 25% of
indirectly, 50% or more of the total voting power of all classes of the total voting power of all classes of stock of the corporation
stock entitled to vote. Indicate the name of the corporation, EIN entitled to vote or at least 25% of the total value of all classes of
(if any), country of incorporation, and the percentage interest stock of the corporation.
owned, directly or indirectly, in the total voting power. List the The constructive ownership rules of section 318 apply in
parent corporation of an affiliated group of corporations filing a determining if a corporation is foreign owned. See section
consolidated tax return rather than the subsidiary members 6038A(c)(5) and the related regulations.
except for subsidiary members in which an interest is owned,
directly or indirectly, independent of the interest owned, directly Enter on line 7a the percentage owned by the foreign person
or indirectly, in the parent corporation. List a corporation owned specified in question 7. On line 7b, enter the name of the owner’s
through a disregarded entity rather than the disregarded entity. country.
Note. If there is more than one 25%-or-more foreign owner,
complete question 7 for the foreign person with the highest
percentage of ownership.
Instructions for Form 1120 23

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Foreign person. The term “foreign person” means: • For 2023, the corporation's total assets equal or exceed $10
• An individual who is not a citizen or resident of the United million;
States; • The corporation or a related party issued audited financial
• An individual who is a citizen or resident of a U.S. territory who statements reporting all or a portion of the corporation's
is not otherwise a citizen or resident of the United States; operations for all or a portion of the corporation's tax year; and
• Any partnership, association, company, or corporation that is • The corporation has one or more tax positions that must be
not created or organized in the United States; reported on Schedule UTP.
• Any foreign estate or trust within the meaning of section Attach Schedule UTP to the corporation's income tax return.
7701(a)(31); or Do not file it separately. A taxpayer that files a protective Form
• A foreign government (or one of its agencies or 1120 must also file Schedule UTP if it satisfies the requirements
instrumentalities) to the extent that it is engaged in the conduct set forth above.
of a commercial activity, as described in
section 892. For details, see the Instructions for Schedule UTP.
However, the term "foreign person" does not include any
foreign person who consents to the filing of a joint U.S. income Questions 15a and 15b
tax return. If the corporation made any payment in 2023 that would require
Owner's country. For individuals, the term “owner's country” the corporation to file any Form(s) 1099, check the “Yes” box for
means the country of residence. For all others, it is the country question 15a and answer question 15b. Otherwise, check the
where incorporated, organized, created, or administered. “No” box for question 15a and skip question 15b. See Am I
Required to File a Form 1099 or Other Information Return? on
Requirement to file Form 5472. If the corporation checked IRS.gov.
“Yes,” it may have to file Form 5472, Information Return of a 25%
Foreign-Owned U.S. Corporation or a Foreign Corporation Question 19
Engaged in a U.S. Trade or Business. Generally, a 25% If the corporation made any payments in 2023 that would require
foreign-owned corporation that had a reportable transaction with the corporation to file any Forms 1042, Annual Withholding Tax
a foreign or domestic related party during the tax year must file Return for U.S. Source Income of Foreign Persons, and 1042-S,
Form 5472. See the Instructions for Form 5472, for filing Foreign Person's U.S. Source Income Subject to Withholding,
instructions and penalties for failure to file. check the “Yes” box. See the Instructions for Form 1042 and
Instructions for Form 1042-S for information regarding who is
Item 9 required to file Forms 1042 and 1042-S and what types of
Show any tax-exempt interest received or accrued. Include any payments are subject to reporting on Forms 1042 and 1042-S.
exempt-interest dividends received as a shareholder in a mutual
fund or other RIC. Also, if required, include the same amount on Question 21
Schedule M-1, line 7 (or Schedule M-3 (Form 1120), Part II, If the corporation paid or accrued (including through a
line 13, if applicable). partnership) any interest or royalty for which a deduction is not
allowed under section 267A, check "Yes" for question 21 and
Item 11 enter the total amount for which a deduction is not allowed.
Generally, if the corporation has an NOL for tax year 2023, it can
elect to waive the entire carryback period for the NOL and Payments to which section 267A applies. Interest or royalty
instead carry the NOL forward to future tax years. To do so, paid or accrued by a domestic corporation (including, in the case
check the box on line 11 and file the tax return by its due date, of a domestic corporation that is a partner in a partnership, the
including extensions. Do not attach the statement described in domestic corporation's allocable share of interest or royalty paid
Temporary Regulations section 301.9100-12T. Generally, once or accrued by the partnership) is subject to section 267A.
made, the election is irrevocable. Section 267A generally applies to interest or royalty paid or
accrued according to a hybrid arrangement (such as, for
If the corporation timely filed its return for the loss year without example, a payment according to a hybrid instrument, or a
making the election, it can make the election on an amended payment to a reverse hybrid), provided that the payment or
return filed within 6 months of the due date of the loss year return accrual is to a related party (or according to a structured
(excluding extensions). Attach the election to the amended arrangement). In addition, under an imported mismatch rule,
return and write "Filed pursuant to section 301.9100-2" on the section 267A generally applies to interest or royalties paid or
election statement. See the Instructions for Form 1139. accrued according to a non-hybrid arrangement where the
income attributable to that payment or accrual is directly or
Corporations filing a consolidated return that elect to waive indirectly offset by certain deductions involving hybridity incurred
the entire carryback period for the group must also attach the by a related party or according to a structured arrangement.
statement required by Regulations section 1.1502-21(b)(3) or However, section 267A does not apply if a de minimis exception
the election will not be valid. is satisfied. See Regulations section 1.267A-1(c). For purposes
of section 267A, interest and royalties are defined broadly. For
Item 12 additional information about arrangements subject to section
Enter the amount of the NOL carryover to the tax year from prior 267A, see Regulations sections 1.267A-2 and 1.267A-4. Also,
years, even if some of the loss is used to offset income on this see the anti-avoidance rule under Regulations section
return. The amount to enter is the total of all NOLs generated in 1.267A-5(b)(6).
prior years but not used to offset income (either as a carryback Extent to which deduction is disallowed. When section
or carryover) to a tax year prior to 2023. Do not reduce the 267A applies to interest or royalties paid or accrued pursuant to
amount by any NOL deduction reported on line 29a. a hybrid arrangement, it generally disallows a deduction for the
amount to the extent that, under the foreign tax law, there is not a
Question 14 corresponding income inclusion (including long-term deferral).
A corporation that files Form 1120 must file Schedule UTP (Form However, the deduction is not disallowed to the extent the
1120), Uncertain Tax Position Statement, with its 2023 income amount is directly or indirectly included in income in the United
tax return if: States, such as if the amount is taken into account with respect

24 Instructions for Form 1120

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to a U.S. shareholder under section 951(a) or section 951A. For partnerships, or proprietorships, and affiliated service groups.
additional information, see Regulations sections 1.267A-2 See section 448(c) and the Instructions for Form 8990 for
through 1.267A-4. For examples illustrating the application of additional information.
section 267A, see Regulations section 1.267A-6.
Question 25
Question 22 To certify as a QOF, the corporation must file Form 1120 and
If the corporation had gross receipts of at least $500 million in attach Form 8996, even if the corporation had no income or
any 1 of the 3 preceding tax years, complete and attach Form expenses to report. If the corporation is attaching Form 8996,
8991. For this purpose, the corporation's gross receipts include check the “Yes” box for question 25. On the line following the
the gross receipts of all persons aggregated with the dollar sign, enter the amount from Form 8996, line 15.
corporation, as specified in section 59A(e)(3). See the
Instructions for Form 8991 to determine if the corporation is The penalty reported on this line from Form 8996, line 15, is
subject to the base erosion minimum tax. not due with the filing of this form. The IRS will separately send
to you a notice setting forth the due date for the penalty payment
Question 23 and where that payment should be sent.

The limitation on business interest expense applies to every Question 26
taxpayer with a trade or business, unless the taxpayer meets
certain specified exceptions. A taxpayer may elect out of the Check the “Yes” box if:
limitation for certain businesses otherwise subject to the 1. On or after December 22, 2017, a foreign corporation
business interest expense limitation. See Question 24. Also, see directly or indirectly acquired substantially all of the properties
the Instructions for Form 8990. held directly or indirectly by the corporation; and
Certain real property trades or businesses and farming 2. The ownership percentage with respect to the acquisition
businesses qualify to make an election not to limit business was greater than 50% (by vote or by value).
interest expense. This is an irrevocable election. If you make this If “Yes” is checked, also enter in the space provided the
election, you are required to use the alternative depreciation ownership percentage both by vote and by value. If there are
system to depreciate any nonresidential real property, residential multiple acquisitions that must be reported, enter the ownership
rental property, and qualified improvement property for an for the most recent acquisition. Attach a statement reporting the
electing real property trade or business, and any property with a ownership percentage by vote and by value for the other
recovery period of 10 years or more for an electing farming acquisitions.
business. See section 168(g)(1)(F). Also, you are not entitled to
the special depreciation allowance for that property. For a Section 7874 applies in certain cases in which a foreign
taxpayer with more than one qualifying business, the election is corporation directly or indirectly acquires substantially all of the
made with respect to each business. properties of a domestic corporation. Generally, it applies when
three requirements are satisfied.
Check “Yes” if the corporation has an election in effect to
exclude a real property trade or business or a farming business 1. Pursuant to a plan or series of related transactions, a
from section 163(j). For more information, see the Instructions for foreign corporation must acquire directly or indirectly
Form 8990. substantially all of the properties held directly or indirectly by a
domestic corporation.
Question 24 2. After the acquisition, the ownership percentage (by vote
Generally, a taxpayer with a trade or business must file Form or value) must be at least 60%.
8990 to claim a deduction for business interest. In addition, Form 3. After the acquisition, the expanded affiliated group that
8990 must be filed by any taxpayer that owns an interest in a includes the foreign acquiring corporation must not have
partnership with current-year, or prior-year carryover, excess substantial business activities in the foreign country in which the
business interest expense allocated from the partnership. foreign acquiring corporation is created or organized.
Exclusions from filing. A taxpayer is not required to file Form When section 7874 applies, the tax treatment of the
8990 if the taxpayer is a small business taxpayer (defined below) acquisition depends on the ownership percentage. If the
and does not have excess business interest expense from a ownership percentage is at least 80%, then the foreign acquiring
partnership. A taxpayer also is not required to file Form 8990 if corporation is treated as a domestic corporation for all purposes
the taxpayer only has business interest expense from these of the Internal Revenue Code. See section 7874(b). If the
excepted trades or businesses: ownership percentage is at least 60% but less than 80%, then
• An electing real property trade or business, the foreign acquiring corporation is respected as a foreign
• An electing farming business, or corporation, but the domestic corporation and certain other
• Certain utility businesses. persons are subject to special rules that reduce the tax benefits
Small business taxpayer. A small business taxpayer is not of the acquisition. See section 7874(a).
subject to the business interest expense limitation and is not See the regulations under section 7874 for rules regarding
required to file Form 8990. A small business taxpayer is a the computation of the ownership percentage. See sections
taxpayer that (a) is not a tax shelter (as defined in section 448(d) 59A(d)(4), 965(l), 4501(d), and 4985 for additional rules
(3)), and (b) meets the gross receipts test of section 448(c), regarding the tax treatment of certain expatriated entities.
discussed next.
Gross receipts test. For 2023, a taxpayer meets the gross Question 27
receipts test if the taxpayer has average annual gross receipts of Digital assets are any digital representations of value that are
$29 million or less for the 3 prior tax years. A taxpayer's average recorded on a cryptographically secured distributed ledger or
annual gross receipts for the 3 prior tax years is determined by any similar technology. For example, digital assets include
adding the gross receipts for the 3 prior tax years and dividing non-fungible tokens (NFTs) and virtual currencies, such as
the total by 3. Gross receipts include the aggregate gross cryptocurrencies and stablecoins. If a particular asset has the
receipts from all persons treated as a single employer, such as a characteristics of a digital asset, it will be treated as a digital
controlled group of corporations, commonly controlled asset for federal income tax purposes.
Instructions for Form 1120 25

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  Check the “Yes” box if at any time during 2023 the corporation     the stock repurchase excise tax if, during the corporation's 
received (as a reward, award, or payment for property or             taxable year, (a) the corporation is publicly traded and 
services); or (b) sold, exchanged, or otherwise disposed of a        repurchased its stock (or a specified affiliate of the corporation 
digital asset (or any financial interest in any digital asset).      acquired the corporation's stock); (b) the corporation is a 
                                                                     specified affiliate of an applicable foreign corporation; or (c) the 
  For example, check “Yes” if at any time during 2023 the            corporation is an expatriated entity with respect to a covered 
corporation:                                                         surrogate foreign corporation.
• Received digital assets as payment for property or services 
provided;                                                            Do not complete a Form 7208 until the date specified in 
• Received digital assets as a result of a reward or award;          upcoming regulations under section 4501. For additional 
• Received new digital assets as a result of mining, staking, and    information, see section 4501 and Announcement 2023-18, 
similar activities;                                                  2023-30 I.R.B. 366, available at IRS.gov/irb/
• Received digital assets as a result of a hard fork;                2023-30_IRB#ANN-2023-18.
• Disposed of digital assets in exchange for property or 
services;                                                            Question 31
• Disposed of a digital asset in exchange or trade for another       If the answer to question 31 is “Yes,” attach a statement titled 
digital asset;                                                       “Schedule K Statement of Subchapter K Basis Adjustments” that 
• Sold a digital asset; or                                           includes the information required for each tax basis adjustment 
• Otherwise disposed of any other financial interest in a digital    described in (1) through (4) below. Provide the required 
asset.                                                               information for each partnership where 80 % or more of the 
The corporation has a financial interest in a digital asset if it is capital or profits of the partnership is owned, directly or indirectly, 
the owner of record of a digital asset, or has an ownership stake    by members of the corporation's controlled group of corporations 
in an account that holds one or more digital assets, including the   (as defined in section 1563). If there are unrelated third-party 
rights and obligations to acquire a financial interest, or owns a    minority partner interests in the partnership, the corporation is 
wallet that holds digital assets.                                    not required to include such partners' information on this 
  The following actions or transactions in 2023, alone, generally    statement.
do not require the corporation to check “Yes:"                       1. If the adjusted basis of a partner's partnership interest 
• Holding a digital asset in a wallet or account;                    differs from the partner's share of the partnership's adjusted 
• Transferring a digital asset from one wallet or account the        basis of partnership property by $10 million or more at the end of 
corporation owns or controls to another wallet or account that it    the tax year and at any other relevant date (for example, at the 
owns or controls; or                                                 time of a transfer of a partnership interest or the liquidation of a 
• Purchasing digital assets using U.S. or other real currency,       partnership) provide the partnership's name and TIN, partner's 
including through the use of electronic platforms such as PayPal     name and TIN, and the amount and allocation of such difference 
and Venmo.                                                           for each partner.
  Do not leave the question unanswered. The corporation must         2. If a partnership makes a basis adjustment of $10 million 
answer "Yes" or “No” by checking the appropriate box. For more       or more at the end of the tax year and at any other relevant date, 
information, go to IRS.gov/virtualcurrencyfaqs.                      pursuant to section 743 (including section 743(d)) upon the 
                                                                     transfer of a partnership interest in such partnership to a partner 
  If the corporation disposed of any digital asset which was         that is, directly or indirectly, a controlled group member, provide 
held as a capital asset, through a sale, trade, exchange,            the partnership's name and TIN, name and TIN of the transferor 
payment, or other transfer, use Form 8949 to calculate the           partner and transferee partner, and the amount and allocation of 
capital gain or loss and report that gain or loss on Schedule D      the basis adjustment.
(Form 1120). If the corporation received any digital asset as        3. If a partnership makes a basis adjustment that is $10 
compensation for services or disposed of any digital asset that      million or more at the end of the tax year and at any other 
was held for sale to customers in a trade or business, it must       relevant date made pursuant to section 734 (including section 
report the income as it would report other income of the same        734(d)) upon the distribution of property to a controlled group 
type.                                                                member (directly or indirectly), provide the name and TIN of 
                                                                     each partnership, the name and TIN of the controlled group 
Question 28                                                          member, and a schedule detailing the amount and allocation of 
If the corporation is a member of a controlled group, check the      the adjustment.
"Yes" box. Complete and attach Schedule O (Form 1120),               4. If a partnership distributed property, directly or indirectly, 
Consent Plan and Apportionment Schedule for a Controlled             to a controlled group member, and the controlled group 
Group. Component members of a controlled group must use              member's basis in the property under section 732(a) or (b) 
Schedule O to report the apportionment of certain tax benefits       differs from the partnership's basis in the property immediately 
between the members of the group. See Schedule O and the             before the distribution by $10 million or more at the end of the tax 
Instructions for Schedule O for more information.                    year and at any other relevant date, provide the partnership's 
                                                                     name and TIN, the name and TIN of the controlled group 
Question 29                                                          member, and the amount and allocation of the basis adjustment.
Check the appropriate boxes to indicate if the corporation is 
required to file Form 4626. If the corporation does not meet the 
requirements of the safe harbor method, as provided under            Schedule L.
section 59(k)(3)(A) and Notice 2023-7, 2023-3 I.R.B. 390, 
available at IRS.gov/irb/2023-03_IRB#NOT-2023-7, for the             Balance Sheets per Books
current year, Form 4626 must be completed and attached to the        The balance sheets should agree with the corporation's books 
corporation's return. See the instructions for Form 4626.            and records.
                                                                     Corporations with total receipts (page 1, line 1a plus lines 4 
Question 30                                                          through 10) and total assets at the end of the tax year less than 
Under section 4501, the corporation may be required to file Form     $250,000 are not required to complete Schedules L, M-1, and 
7208, Excise Tax on Repurchase of Corporate Stock, and pay           M-2 if the “Yes” box on Schedule K, question 13, is checked.

26                                                                                                    Instructions for Form 1120

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Corporations with total assets nonconsolidated (or complete Schedule M-1 instead of completing Parts II and III of
consolidated for all corporations included within the consolidated Schedule M-3, the amount on Schedule M-1, line 1, must equal
tax group) of $10 million or more on the last day of the tax year the amount on Schedule M-3, Part I, line 11. See the Instructions
must file Schedule M-3 (Form 1120) instead of Schedule M-1. for Schedule M-3 (Form 1120) for more information.
However, see the instructions for Schedule M-1 below. See the
separate Instructions for Schedule M-3 (Form 1120) for Line 5c
provisions that also affect Schedule L. Include any of the following applicable expenses.
If filing a consolidated return, report total consolidated assets, • Entertainment expenses not deductible under section 274(a).
liabilities, and shareholder's equity for all corporations joining in • Meal expenses not deductible under section 274(n).
the return. See Consolidated Return, earlier. • Qualified transportation fringes not deductible under section
274(a)(4).
Line 1 • Expenses for the use of an entertainment facility.
Include certificates of deposit as cash on this line. • The part of business gifts over $25.
• Expenses of an individual over $2,000, allocable to
Line 5 conventions on cruise ships.
• Employee achievement awards of nontangible or tangible
Include on this line: property over $400 ($1,600 if part of a qualified plan).
• State and local government obligations, the interest on which • The cost of skyboxes.
is excludable from gross income under section 103(a), and • Nondeductible club dues.
• Stock in a mutual fund or other RIC that distributed • The part of luxury water travel expenses not deductible under
exempt-interest dividends during the tax year of the corporation. section 274(m).
• Expenses for travel as a form of education.
Line 26 • Other nondeductible travel and entertainment expenses.
Some examples of adjustments to report on this line include:
• Unrealized gains and losses on securities held “available for Line 7
sale,” Report any tax-exempt interest received or accrued, including
• Foreign currency translation adjustments, any exempt-interest dividends received as a shareholder in a
• The excess of additional pension liability over unrecognized mutual fund or other RIC. Also, report this same amount on
prior service cost, Schedule K, item 9.
• Guarantees of employee stock (ESOP) debt, and
• Compensation related to employee stock award plans. The corporation should include tax-exempt income from
If the total adjustment to be entered on line 26 is a negative forgiven PPP loans on line 7 of Schedule M-1 (if it was included
amount, enter the amount in parentheses. on line 1 of the Schedule M-1), or on Part II, line 25 of
Schedule M-3 (Form 1120), column (c) as a negative number (if
it was included on line 25 in column (a) as Income per Income
Schedule M-1. Reconciliation of Statement).
Income (Loss) per Books With
Income per Return Schedule M-2. Analysis of
In completing Schedule M-1, the following apply. Unappropriated Retained Earnings
• Corporations with total receipts (page 1, line 1a plus lines 4
through 10) and total assets at the end of the tax year less than per Books
$250,000 are not required to complete Schedules L, M-1, and If the corporation treats tax-exempt income resulting from a PPP
M-2 if the “Yes” box on Schedule K, question 13, is checked. loan as received or accrued prior to when forgiveness of the PPP
• Corporations with total assets non-consolidated (or loan is granted and the amount of forgiveness granted is less
consolidated for all corporations included within the consolidated than the amount of tax-exempt income that was previously
tax group) of $10 million or more on the last day of the tax year treated as received or accrued, the corporation should include
must file Schedule M-3 (Form 1120) instead of Schedule M-1. the difference as a decrease in tax-exempt income on
• A corporation filing Form 1120 that is not required to file Schedule M-2, line 6, for the tax year in which the taxpayer
Schedule M-3 may voluntarily file Schedule M-3 instead of receives notice that the PPP loan was not fully forgiven. The
Schedule M-1. See the Instructions for Schedule M-3 (Form corporation should attach a statement to Schedule M-2 including
1120) for more information. the following information:
• Corporations that (a) are required to file Schedule M-3 (Form 1. The corporation's name, address, and EIN;
1120) and have less than $50 million total assets at the end of
the tax year, or (b) are not required to file Schedule M-3 (Form 2. A statement that the corporation is making adjustments in
1120) and voluntarily file Schedule M-3 (Form 1120), must either accordance with section 3.03 of Rev. Proc. 2021-48; and
(i) complete Schedule M-3 (Form 1120) entirely, or (ii) complete 3. The tax year for which tax-exempt income was originally
Schedule M-3 (Form 1120) through Part I, and complete Form reported, the amount of tax-exempt income that was originally
1120, Schedule M-1, instead of completing Parts II and III of reported for such tax year, and the amount of tax-exempt income
Schedule M-3 (Form 1120). If the corporation chooses to being adjusted on Schedule M-2.

Instructions for Form 1120 27

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Paperwork Reduction Act Notice. We ask for the information on these forms to carry out the Internal Revenue laws of the United
States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to
figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,
as required by section 6103.
Estimates of Taxpayer Burden. The following tables show burden estimates based on current statutory requirements as of
December 2023 for taxpayers filing 2023 Forms 1065, 1120, 1120-C, 1120-F, 1120-H, 1120-ND, 1120-S, 1120-SF, 1120-FSC, 1120-L,
1120-PC, 1066, 1120-REIT, 1120-RIC, 1120-POL, and related attachments. Time spent and out-of-pocket costs are presented
separately. Time burden is broken out by taxpayer activity, with reporting representing the largest component. Out-of-pocket costs
include any expenses incurred by taxpayers to prepare and submit their tax returns. Examples include tax return preparation and
submission fees, postage and photocopying costs, and tax preparation software costs. While these estimates don't include burden
associated with post-filing activities, IRS operational data indicate that electronically prepared and filed returns have fewer arithmetic
errors, implying lower post-filing burden.
Reported time and cost burdens are national averages and don't necessarily reflect a “typical” case. Most taxpayers experience
lower than average burden, with taxpayer burden varying considerably by taxpayer type.
The average burden for partnerships filing Forms 1065 and related attachments is about 60 hours and $5,000; the average burden
for corporations filing Form 1120 and associated forms is about 105 hours and $6,700; and the average burden for Forms 1066,
1120-REIT, 1120-RIC, 1120S, and all related attachments is 65 hours and $4,400. Within each of these estimates there is significant
variation in taxpayer activity. Tax preparation fees and other out-of-pocket costs vary extensively depending on the tax situation of the
taxpayer, the type of software or professional preparer used, and the geographic location. Third-party burden hours are not included in
these estimates.

Table 1 – Taxpayer Burden for Entities Taxed as Partnerships
Forms 1065, 1066, and all attachments
Primary Form Filed or Type of Total Number of Returns Average Time (hours) Average Cost ($) Average Monetized
Taxpayer (millions) Burden ($)
All Partnerships 5.3 60 5,000 8,700
Small 4.9 50 3,200 5,200
Large* 0.4 200 27,800 50,800
*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and
pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Table 2 – Taxpayer Burden for Entities Taxed as Taxable Corporations
Forms 1120, 1120-C, 1120-F, 1120-H, 1120-ND, 1120-SF, 1120-FSC, 1120-L, 1120-PC, 1120-POL, and all attachments
Primary Form Filed or Type of Total Number of Returns Average Time (hours) Average Cost ($) Average Monetized
Taxpayer (millions) Burden ($)
All Taxable Corporations 2.1 105 6,700 14,900
Small 2.0 55 3,600 6,200
Large* 0.1 830 53,800 149,000
*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and
pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Table 3 – Taxpayer Burden for Entities Taxed as Pass-Through Corporations
Forms 1120-REIT, 1120-RIC, 1120-S, and all attachments
Primary Form Filed or Type of Total Number of Returns Average Time (hours) Average Cost ($) Average Monetized
Taxpayer (millions) Burden ($)
All Pass-Through Corporations 5.8 65 4,400 7,500
Small 5.7 60 3,800 6,400
Large* 0.1 295 37,700 71,800
*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and
pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Comments. If you have comments concerning the accuracy of these time estimates or suggestions for making these forms simpler,
we would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to the Internal
Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send the tax form
to this address. Instead, see Where To File, earlier, near the beginning of the instructions.

28 Instructions for Form 1120

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Principal Business Activity Codes                                       Using the list of activities and codes below,          considered a manufacturer and must use one of the 
                                                                 determine from which activity the company derives the         manufacturing codes (311110–339900).
This list of principal business activities and their             largest percentage of its “total receipts.” Total receipts is       Once the principal business activity is determined, 
associated codes is designed to classify an enterprise           defined as the sum of gross receipts or sales (page 1,        entries must be made on Form 1120, Schedule K, lines 
by the type of activity in which it is engaged to facilitate     line 1a) plus all other income (page 1, lines 4 through       2a, 2b, and 2c. On line 2a, enter the six-digit code 
the administration of the Internal Revenue Code. These           10). If the company purchases raw materials and               selected from the list below. On line 2b, enter the 
principal business activity codes are based on the North         supplies them to a subcontractor to produce the finished      company's business activity. On line 2c, enter a brief 
American Industry Classification System.                         product, but retains title to the product, the company is     description of the principal product or service of the 
                                                                                                                               company.
Agriculture, Forestry, Fishing,           238290             Other Building Equipment           Plastics and Rubber Products             Furniture and Related Product 
                                                             Contractors                        Manufacturing                            Manufacturing
and Hunting                               238300             Building Finishing Contractors     326100 Plastics Product Mfg              337000   Furniture & Related Product 
Crop Production                                              (including drywall, insulation,    326200 Rubber Product Mfg                         Manufacturing
                                                             painting, wallcovering, flooring, 
111100 Oilseed & Grain Farming                               tile, & finished carpentry)        Nonmetallic Mineral Product              Miscellaneous Manufacturing
111210 Vegetable & Melon Farming          238900             Other Specialty Trade              Manufacturing                            339110   Medical Equipment & Supplies 
       (including potatoes & yams)                           Contractors (including site        327100 Clay Product & Refractory Mfg              Mfg
111300 Fruit & Tree Nut Farming                              preparation)                       327210 Glass & Glass Product Mfg         339900   Other Miscellaneous 
111400 Greenhouse, Nursery, &             Manufacturing                                         327300 Cement & Concrete Product Mfg              Manufacturing
       Floriculture Production                                                                  327400 Lime & Gypsum Product Mfg         Wholesale Trade
111900 Other Crop Farming (including      Food Manufacturing                                    327900 Other Nonmetallic Mineral         Merchant Wholesalers, Durable Goods
       tobacco, cotton, sugarcane, hay,   311110             Animal Food Mfg                           Product Mfg                       423100   Motor Vehicle & Motor Vehicle 
       peanut, sugar beet, & all other    311200             Grain & Oilseed Milling            Primary Metal Manufacturing                       Parts & Supplies
       crop farming)                      311300             Sugar & Confectionery Product      331110 Iron & Steel Mills & Ferroalloy   423200   Furniture & Home Furnishings
Animal Production                                            Mfg                                       Mfg                               423300   Lumber & Other Construction 
112111 Beef Cattle Ranching & Farming     311400             Fruit & Vegetable Preserving &     331200 Steel Product Mfg from                     Materials
112112 Cattle Feedlots                                       Specialty Food Mfg                        Purchased Steel                   423400   Professional & Commercial 
112120 Dairy Cattle & Milk Production     311500             Dairy Product Mfg                  331310 Alumina & Aluminum Production              Equipment & Supplies
112210 Hog & Pig Farming                  311610             Animal Slaughtering &                     & Processing                      423500   Metal & Mineral (except 
112300 Poultry & Egg Production                              Processing                         331400 Nonferrous Metal (except                   Petroleum)
112400 Sheep & Goat Farming               311710             Seafood Product Preparation &             Aluminum) Production &            423600   Household Appliances & 
112510 Aquaculture (including shellfish &                    Packaging                                 Processing                                 Electrical & Electronic Goods
       finfish farms & hatcheries)        311800             Bakeries, Tortilla & Dry Pasta Mfg 331500 Foundries                         423700   Hardware, Plumbing, & Heating 
112900 Other Animal Production            311900             Other Food Mfg (including          Fabricated Metal Product                          Equipment & Supplies
Forestry and Logging                                         coffee, tea, flavorings &          Manufacturing                            423800   Machinery, Equipment, & 
                                                             seasonings)                        332110 Forging & Stamping                         Supplies
113110 Timber Tract Operations            Beverage and Tobacco Product                          332210 Cutlery & Handtool Mfg            423910   Sporting & Recreational Goods & 
113210 Forest Nurseries & Gathering of    Manufacturing                                         332300 Architectural & Structural Metals          Supplies
       Forest Products                    312110             Soft Drink & Ice Mfg                      Mfg                               423920   Toy & Hobby Goods & Supplies
113310 Logging                            312120             Breweries                          332400 Boiler, Tank, & Shipping          423930   Recyclable Materials
Fishing, Hunting, and Trapping            312130             Wineries                                  Container Mfg                     423940   Jewelry, Watch, Precious Stone, 
114110 Fishing                            312140             Distilleries                       332510 Hardware Mfg                               & Precious Metals
114210 Hunting & Trapping                 312200             Tobacco Manufacturing              332610 Spring & Wire Product Mfg         423990   Other Miscellaneous Durable 
Support Activities for Agriculture and    Textile Mills and Textile Product Mills               332700 Machine Shops; Turned Product;             Goods
Forestry                                  313000             Textile Mills                             & Screw, Nut, & Bolt Mfg          Merchant Wholesalers, Nondurable 
115110 Support Activities for Crop        314000             Textile Product Mills              332810 Coating, Engraving, Heat          Goods
       Production (including cotton                                                                    Treating, & Allied Activities     424100   Paper & Paper Products
       ginning, soil preparation,         Apparel Manufacturing                                 332900 Other Fabricated Metal Product    424210   Drugs & Druggists' Sundries
       planting, & cultivating)           315100             Apparel Knitting Mills                    Mfg                               424300   Apparel, Piece Goods, & Notions
115210 Support Activities for Animal      315210             Cut & Sew Apparel Contractors      Machinery Manufacturing                  424400   Grocery & Related Products
       Production (including farriers)    315250             Cut & Sew Apparel Mfg (except      333100 Agriculture, Construction, &      424500   Farm Product Raw Materials
115310 Support Activities for Forestry                       Contractors)                              Mining Machinery Mfg
Mining                                    315990             Apparel Accessories & Other        333200 Industrial Machinery Mfg          424600   Chemical & Allied Products
                                                             Apparel Mfg                        333310 Commercial & Service Industry     424700   Petroleum & Petroleum Products
211120 Crude Petroleum Extraction         Leather and Allied Product                                   Machinery Mfg                     424800   Beer, Wine, & Distilled Alcoholic 
211130 Natural Gas Extraction             Manufacturing                                         333410 Ventilation, Heating,                      Beverages
212110 Coal Mining                        316110             Leather & Hide Tanning &                  Air-Conditioning, & Commercial    424910   Farm Supplies
212200 Metal Ore Mining                                      Finishing                                 Refrigeration Equipment Mfg       424920   Book, Periodical, & Newspapers
212310 Stone Mining & Quarrying           316210             Footwear Mfg (including rubber &   333510 Metalworking Machinery Mfg        424930   Flower, Nursery Stock, & Florists' 
212320 Sand, Gravel, Clay, & Ceramic &                       plastics)                          333610 Engine, Turbine & Power                    Supplies
       Refractory Minerals Mining &       316990             Other Leather & Allied Product            Transmission Equipment Mfg        424940   Tobacco Products & Electronic 
       Quarrying                                             Mfg                                333900 Other General Purpose                      Cigarettes
212390 Other Nonmetallic Mineral          Wood Product Manufacturing                                   Machinery Mfg                     424950   Paint, Varnish, & Supplies
       Mining & Quarrying                 321110             Sawmills & Wood Preservation       Computer and Electronic Product          424990   Other Miscellaneous Nondurable 
213110 Support Activities for Mining      321210             Veneer, Plywood, & Engineered      Manufacturing                                     Goods
                                                             Wood Product Mfg                   334110 Computer & Peripheral 
Utilities                                 321900             Other Wood Product Mfg                    Equipment Mfg                     Wholesale Trade Agents and Brokers
221100 Electric Power Generation,         Paper Manufacturing                                   334200 Communications Equipment Mfg      425120   Wholesale Trade Agents & 
                                                                                                                                                  Brokers
       Transmission & Distribution        322100             Pulp, Paper, & Paperboard Mills    334310 Audio & Video Equipment Mfg
221210 Natural Gas Distribution           322200             Converted Paper Product Mfg        334410 Semiconductor & Other             Retail Trade
221300 Water, Sewage & Other Systems      Printing and Related Support Activities                      Electronic Component Mfg          Motor Vehicle and Parts Dealers
221500 Combination Gas & Electric         323100             Printing & Related Support         334500 Navigational, Measuring,          441110   New Car Dealers
Construction                                                 Activities                                Electromedical, & Control         441120   Used Car Dealers
                                                                                                       Instruments Mfg
Construction of Buildings                 Manufacturing                                         334610 Manufacturing & Reproducing       441210   Recreational Vehicle Dealers
                                          Petroleum and Coal Products 
                                                                                                       Magnetic & Optical Media          441222   Boat Dealers
236110 Residential Building Construction  324110             Petroleum Refineries (including    Electrical Equipment, Appliance, and     441227   Motorcycle, ATV, & All Other 
236200 Nonresidential Building                               integrated)                        Component Manufacturing                           Motor Vehicle Dealers
       Construction                       324120             Asphalt Paving, Roofing, &         335100 Electric Lighting Equipment Mfg   441300   Automotive Parts, Accessories, & 
Heavy and Civil Engineering                                  Saturated Materials Mfg            335200 Household Appliance Mfg                    Tire Retailers
Construction                              324190             Other Petroleum & Coal Products    335310 Electrical Equipment Mfg          Furniture and Home Furnishings 
237100 Utility System Construction                           Mfg                                                                         Retailers
237210 Land Subdivision                   Chemical Manufacturing                                335900 Other Electrical Equipment &      449110   Furniture Retailers
237310 Highway, Street, & Bridge          325100             Basic Chemical Mfg                        Component Mfg                     449121   Floor Covering Retailers
       Construction                       325200             Resin, Synthetic Rubber, &         Transportation Equipment                 449122   Window Treatment Retailers
237990 Other Heavy & Civil Engineering                       Artificial & Synthetic Fibers &    Manufacturing
       Construction                                          Filaments Mfg                      336100 Motor Vehicle Mfg                 449129   All Other Home Furnishings 
Specialty Trade Contractors               325300             Pesticide, Fertilizer, & Other     336210 Motor Vehicle Body & Trailer Mfg           Retailers
238100 Foundation, Structure, & Building                     Agricultural Chemical Mfg          336300 Motor Vehicle Parts Mfg           Electronics and Appliance Retailers
       Exterior Contractors (including    325410             Pharmaceutical & Medicine Mfg      336410 Aerospace Product & Parts Mfg     449210   Electronics & Appliance Retailers 
                                                                                                                                                  (including Computers)
       framing carpentry, masonry,        325500             Paint, Coating, & Adhesive Mfg     336510 Railroad Rolling Stock Mfg        Building Material and Garden 
       glass, roofing, & siding)          325600             Soap, Cleaning Compound, &         336610 Ship & Boat Building              Equipment and Supplies Dealers
238210 Electrical Contractors                                Toilet Preparation Mfg             336990 Other Transportation Equipment    444110   Home Centers
238220 Plumbing, Heating, &               325900             Other Chemical Product &                  Mfg                               444120   Paint & Wallpaper Retailers
       Air-Conditioning Contractors                          Preparation Mfg
                                                                                                                                         444140   Hardware Retailers

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Principal Business Activity Codes (Continued)
444180 Other Building Material Dealers      485410 School & Employee Bus             523210    Securities & Commodity            541380  Testing Laboratories & Services
444200 Lawn & Garden Equipment &                   Transportation                              Exchanges                         Specialized Design Services
       Supplies Retailers                   485510 Charter Bus Industry              523900    Other Financial Investment        541400  Specialized Design Services 
Food and Beverage Retailers                 485990 Other Transit & Ground                      Activities (including portfolio           (including interior, industrial, 
445110 Supermarkets & Other Grocery                Passenger Transportation                    management & investment                   graphic, & fashion design)
       Retailers (except Convenience)       Pipeline Transportation                            advice)                           Computer Systems Design and Related 
445131 Convenience Retailers                486000 Pipeline Transportation           Insurance Carriers and Related              Services
                                                                                     Activities
445132 Vending Machine Operators            Scenic & Sightseeing Transportation      524110    Direct Life, Health, & Medical    541511  Custom Computer Programming 
445230 Fruit & Vegetable Retailers          487000 Scenic & Sightseeing                        Insurance Carriers                        Services
445240 Meat Retailers                              Transportation                    524120    Direct Insurance (except Life,    541512  Computer Systems Design 
445250 Fish & Seafood Retailers             Support Activities for Transportation              Health, & Medical) Carriers               Services
445291 Baked Goods Retailers                488100 Support Activities for Air        524210    Insurance Agencies &              541513  Computer Facilities Management 
445292 Confectionery & Nut Retailers               Transportation                              Brokerages                                Services
445298 All Other Specialty Food             488210 Support Activities for Rail       524290    Other Insurance Related           541519  Other Computer Related 
       Retailers                                   Transportation                              Activities (including third-party         Services
445320 Beer, Wine, & Liquor Retailers       488300 Support Activities for Water                administration of insurance &     Other Professional, Scientific, and 
                                                   Transportation                              pension funds)                    Technical Services
Health and Personal Care Retailers          488410 Motor Vehicle Towing              Funds, Trusts, and Other Financial          541600  Management, Scientific, & 
456110 Pharmacies & Drug Retailers          488490 Other Support Activities for Road Vehicles                                            Technical Consulting Services
456120 Cosmetics, Beauty Supplies, &               Transportation                    525100    Insurance & Employee Benefit      541700  Scientific Research & 
       Perfume Retailers                    488510 Freight Transportation                      Funds                                     Development Services
456130 Optical Goods Retailers                     Arrangement                       525910    Open-End Investment Funds         541800  Advertising, Public Relations, & 
456190 Other Health & Personal Care         488990 Other Support Activities for                (Form 1120-RIC)                           Related Services
       Retailers                                   Transportation                    525920    Trusts, Estates, & Agency         541910  Marketing Research & Public 
Gasoline Stations & Fuel Dealers            Couriers and Messengers                            Accounts                                  Opinion Polling
457100 Gasoline Stations (including         492110 Couriers & Express Delivery       525990    Other Financial Vehicles          541920  Photographic Services
       convenience stores with gas)                Services                                    (including mortgage REITs &       541930  Translation & Interpretation 
                                                                                               closed-end investment funds)              Services
457210 Fuel Dealers (including Heating      492210 Local Messengers & Local                                                      541940  Veterinary Services
       Oil & Liquefied Petroleum)                  Delivery                          Real Estate and Rental and                  541990  All Other Professional, Scientific, 
Clothing and Accessories Retailers          Warehousing and Storage                  Leasing                                             & Technical Services
458110 Clothing & Clothing Accessories      493100 Warehousing & Storage (except 
       Retailers                                   lessors of miniwarehouses &       Real Estate                                 Management of Companies 
458210 Shoe Retailers                              self-storage units)               531110    Lessors of Residential Buildings  (Holding Companies)
458310 Jewelry Retailers                    Information                                        & Dwellings (including equity 
                                                                                               REITs)                            551111  Offices of Bank Holding 
458320 Luggage & Leather Goods              Motion Picture and Sound Recording       531120    Lessors of Nonresidential                 Companies
       Retailers                            Industries                                         Buildings (except                 551112  Offices of Other Holding 
Sporting Goods, Hobby, Book, Musical        512100 Motion Picture & Video Industries           Miniwarehouses) (including                Companies
Instrument and Miscellaneous Retailers             (except video rental)                       equity REITs)
459110 Sporting Goods Retailers             512200 Sound Recording Industries        531130    Lessors of Miniwarehouses &       Administrative and Support and 
459120 Hobby, Toy, & Game Retailers         Publishing Industries                              Self-Storage Units (including     Waste Management and 
                                                                                               equity REITs)
       Goods Retailers
459130 Sewing, Needlework, & Piece          513110 Newspaper Publishers              531190    Lessors of Other Real Estate      Remediation Services
459140 Musical Instrument & Supplies        513120 Periodical Publishers                       Property (including equity REITs)
       Retailers                            513130 Book Publishers                   531210    Offices of Real Estate Agents &   Administrative and Support Services
459210 Book Retailers & News Dealers        513140 Directory & Mailing List                    Brokers                           561110  Office Administrative Services
       (including newsstands)                      Publishers                        531310    Real Estate Property Managers     561210  Facilities Support Services
459310 Florists                             513190 Other Publishers                  531320    Offices of Real Estate Appraisers 561300  Employment Services
459410 Office Supplies & Stationery         513210 Software Publishers               531390    Other Activities Related to Real  561410  Document Preparation Services
       Retailers                            Broadcasting, Content Providers, and               Estate                            561420  Telephone Call Centers
459420 Gift, Novelty, & Souvenir            Telecommunications                       Rental and Leasing Services                 561430  Business Service Centers 
       Retailers                            516100 Radio & Television Broadcasting   532100    Automotive Equipment Rental &             (including private mail centers & 
459510 Used Merchandise Retailers                  Stations                                    Leasing                                   copy shops)
459910 Pet & Pet Supplies Retailers         516210 Media Streaming, Social           532210    Consumer Electronics &            561440  Collection Agencies
459920 Art Dealers                                 Networks, & Other Content                   Appliances Rental                 561450  Credit Bureaus
459930 Manufactured (Mobile) Home                  Providers                         532281    Formal Wear & Costume Rental      561490  Other Business Support 
       Dealers                              517000 Telecommunications (including     532282    Video Tape & Disc Rental                  Services (including repossession 
459990 All Other Miscellaneous Retailers           Wired, Wireless, Satellite, Cable 532283    Home Health Equipment Rental              services, court reporting, & 
       (including tobacco, candle, &               & Other Program Distribution,                                                         stenotype services)
       trophy retailers)                           Resellers, Agents, Other          532284    Recreational Goods Rental         561500  Travel Arrangement & 
                                                   Telecommunications, & Internet 
General Merchandise Retailers                      Service Providers)                532289    All Other Consumer Goods                  Reservation Services
                                                                                               Rental
455110 Department Stores                    Data Processing, Web Search Portals, &   532310    General Rental Centers            561600  Investigation & Security Services
455210 Warehouse Clubs, Supercenters,       Other Information Services               532400    Commercial & Industrial           561710  Exterminating & Pest Control 
       & Other General Merch. Retailers     518210 Computing Infrastructure                    Machinery & Equipment Rental &            Services
Nonstore Retailers                                 Providers, Data Processing, Web             Leasing                           561720  Janitorial Services
       Nonstore retailers sell all types of        Hosting, & Related Services       Lessors of Nonfinancial Intangible          561730  Landscaping Services
       merchandise using such               519200 Web Search Portals, Libraries,    Assets (except copyrighted works)           561740  Carpet & Upholstery Cleaning 
       methods as Internet, mail-order             Archives, & Other Info. Services  533110    Lessors of Nonfinancial                   Services
       catalogs, interactive television, or Finance and Insurance                              Intangible Assets (except         561790  Other Services to Buildings & 
       direct sales. These types of                                                            copyrighted works)                        Dwellings
       Retailers should select the PBA      Depository Credit Intermediation                                                     561900  Other Support Services 
       associated with their primary line   522110 Commercial Banking                Professional, Scientific, and                       (including packaging & labeling 
       of products sold. For example,                                                                                                    services, & convention & trade 
       establishments primarily selling     522130 Credit Unions                     Technical Services                                  show organizers)
       prescription and non-prescription    522180 Savings Institutions & Other      Legal Services                              Waste Management and Remediation 
       drugs, select PBA code 456110               Depository Credit Intermediation  541110    Offices of Lawyers                Services
       Pharmacies & Drug Retailers          Nondepository Credit Intermediation      541190    Other Legal Services              562000  Waste Management & 
Transportation and                          522210 Credit Card Issuing               Accounting, Tax Preparation,                        Remediation Services
Warehousing                                 522220 Sales Financing                   Bookkeeping, and Payroll Services           Educational Services
                                            522291 Consumer Lending                  541211    Offices of Certified Public 
Air, Rail, and Water Transportation         522292 Real Estate Credit (including               Accountants                       611000  Educational Services (including 
481000 Air Transportation                          mortgage bankers & originators)   541213    Tax Preparation Services                  schools, colleges, & universities)
482110 Rail Transportation                  522299 Intl, Secondary Market, & Other   541214    Payroll Services                  Health Care and Social 
483000 Water Transportation                        Nondepos. Credit Intermediation   541219    Other Accounting Services         Assistance
Truck Transportation                        Activities Related to Credit             Architectural, Engineering, and Related 
484110 General Freight Trucking, Local      Intermediation                           Services                                    Offices of Physicians and Dentists
484120 General Freight Trucking,            522300 Activities Related to Credit      541310    Architectural Services            621111  Offices of Physicians (except 
       Long-distance                               Intermediation (including loan                                                        mental health specialists)
                                                   brokers, check clearing, & money  541320    Landscape Architecture Services
484200 Specialized Freight Trucking                transmitting)                     541330    Engineering Services              621112  Offices of Physicians, Mental 
                                                                                                                                         Health Specialists
Transit and Ground Passenger                Securities, Commodity Contracts, and     541340    Drafting Services                 621210  Offices of Dentists
485110 Urban Transit Systems                Related Activities
Transportation                              Other Financial Investments and          541350    Building Inspection Services      Offices of Other Health Practitioners
485210 Interurban & Rural Bus               523150 Investment Banking & Securities   541360    Geophysical Surveying &           621310  Offices of Chiropractors
       Transportation                              Intermediation                              Mapping Services
485310 Taxi & Ridesharing Services          523160 Commodity Contracts               541370    Surveying & Mapping (except       621320  Offices of Optometrists
485320 Limousine Service                           Intermediation                              Geophysical) Services             621330  Offices of Mental Health 
                                                                                                                                         Practitioners (except Physicians)

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Principal Business Activity Codes (Continued)
621340 Offices of Physical, Occupational 624310 Vocational Rehabilitation       721120 Casino Hotels                        811410 Home & Garden Equipment & 
       & Speech Therapists, &                   Services                        721191 Bed & Breakfast Inns                        Appliance Repair & Maintenance
       Audiologists                      624410 Childcare Services              721199 All Other Traveler                   811420 Reupholstery & Furniture Repair
621391 Offices of Podiatrists                                                          Accommodation                        811430 Footwear & Leather Goods 
621399 Offices of All Other              Arts, Entertainment, and               721210 RV (Recreational Vehicle) Parks             Repair
       Miscellaneous Health              Recreation                                    & Recreational Camps                 811490 Other Personal & Household 
       Practitioners                                                            721310 Rooming & Boarding Houses,                  Goods Repair & Maintenance
Outpatient Care Centers                  Performing Arts, Spectator Sports, and        Dormitories, & Workers’ Camps        Personal and Laundry Services
621410 Family Planning Centers           Related Industries
621420 Outpatient Mental Health &        711100 Performing Arts Companies       Food Services and Drinking Places           812111 Barber Shops
       Substance Abuse Centers           711210 Spectator Sports (including     722300 Special Food Services (including     812112 Beauty Salons
621491 HMO Medical Centers                      sports clubs & racetracks)             food service contractors &           812113 Nail Salons
621492 Kidney Dialysis Centers           711300 Promoters of Performing Arts,          caterers)                            812190 Other Personal Care Services 
                                                Sports, & Similar Events        722410 Drinking Places (Alcoholic 
621493 Freestanding Ambulatory           711410 Agents & Managers for Artists,         Beverages)                                  (including diet & weight reducing 
                                                                                                                                   centers)
       Surgical & Emergency Centers             Athletes, Entertainers, & Other 722511 Full-Service Restaurants             812210 Funeral Homes & Funeral 
621498 All Other Outpatient Care                Public Figures                  722513 Limited-Service Restaurants                 Services
       Centers                           711510 Independent Artists, Writers, & 722514 Cafeterias, Grill Buffets, & Buffets 812220 Cemeteries & Crematories
Medical and Diagnostic Laboratories             Performers                      722515 Snack & Non-alcoholic Beverage       812310 Coin-Operated Laundries & 
621510 Medical & Diagnostic              Museums, Historical Sites, and Similar        Bars                                        Drycleaners
       Laboratories                      Institutions                                                                       812320 Drycleaning & Laundry Services 
Home Health Care Services                712100 Museums, Historical Sites, &    Other Services                                     (except Coin-Operated)
621610 Home Health Care Services                Similar Institutions            Repair and Maintenance                      812330 Linen & Uniform Supply
Other Ambulatory Health Care Services    Amusement, Gambling, and Recreation    811110 Automotive Mechanical &              812910 Pet Care (except Veterinary) 
621900 Other Ambulatory Health Care      Industries                                    Electrical Repair & Maintenance             Services
       Services (including ambulance     713100 Amusement Parks & Arcades       811120 Automotive Body, Paint, Interior,    812920 Photofinishing
       services & blood & organ banks)   713200 Gambling Industries                    & Glass Repair                       812930 Parking Lots & Garages
Hospitals                                713900 Other Amusement & Recreation    811190 Other Automotive Repair &            812990 All Other Personal Services
622000 Hospitals                                Industries (including golf             Maintenance (including oil           Religious, Grantmaking, Civic, 
Nursing and Residential Care Facilities         courses, skiing facilities,            change & lubrication shops & car     Professional, and Similar Organizations
                                                marinas, fitness centers, &            washes)
623000 Nursing & Residential Care               bowling centers)                811210 Electronic & Precision Equipment     813000 Religious, Grantmaking, Civic, 
       Facilities                                                                      Repair & Maintenance                        Professional, & Similar 
Social Assistance                        Accommodation and Food                 811310 Commercial & Industrial                     Organizations (including 
624100 Individual & Family Services      Services                                      Machinery & Equipment (except               condominium & homeowners 
                                                                                       Automotive & Electronic) Repair             associations)
624200 Community Food & Housing, &       Accommodation                                 & Maintenance                        Other
       Emergency & Other Relief                                                                                             999000 Unclassified Establishments 
       Services                          721110 Hotels (except Casino Hotels) &                                                    (unable to classify)
                                                Motels

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Index
 
                                           Final return 9                            Personal holding company   9
A                                          Financial asset securitization investment Personal holding company tax        21
                                             trust (FASIT) 2                         Personal service corporation 9
Accounting methods   6                     Foreign person (defined)    23            Preparer, tax return 4
Accounting period (Tax Year)    7          Foreign tax credit 21                     Private delivery services 4
Address change    9                        Forms and publications, how to get   2
Advance payments     10                    Future Developments      1                R
Affiliated group  23
Amended return    7                        G                                         Recapture taxes 21
Amortization  11                                                                     Reconciliation of income  27
Assembling the return   5                  General business credit    21             Recordkeeping  7
At-risk rules 16                           General Instructions     2                Refundable credits 22
                                           Gross receipts  10                        Related party transactions 11
B                                                                                    Rents (expense) 13
Backup withholding   22                    I                                         Rents (income) 10
Bad debts 13                               Installment sales 10                      Repairs and maintenance   12
Balance sheets    26                       Interest due
Base erosion minimum tax    21 25,           Late payment of tax    6                S
Beneficiaries of trusts 22                   Look-back method    21                  Salaries and wages   12
Business start-up expenses  11             Interest expense  13                      Schedule:
                                           Interest income:                           C 18
C                                            Tax-exempt   24 27,                      J 20
                                             Taxable 10
Capital construction fund (See Merchant                                               K 22
  Marine capital construction fund)                                                   L 26
Closely held corporations   12             L                                          M-1 27
Compensation of officers   12              LIFO recapture:                            M-3 9 27, 
Consolidated return  8 24,                   Tax on  22                              Section 263A costs   11
Contributions to reduce public debt     2  Limitations on deductions     11 14,      Shareholders' equity adjustments      27
Contributions, charitable  14              Limited liability companies   2           Signature 4
Corporate alternative minimum tax   21 26, Lobbying expenses, nondeductibility    16 Small business taxpayer   6 25, 
Cost of goods sold   10                                                              Specific Instructions 8
Credits against tax  21                    M
                                                                                     T
                                           Merchant Marine capital construction 
D                                            fund:                                   Tax issues, unresolved 2
Deductions 11                                Deduction for contributions 17          Tax-exempt securities  27
Depletion 15                                 Tax on nonqualified withdrawal 21       Taxes and licenses 13
Depository methods of tax payment       5  Minimum tax:                              Total assets 9
Depreciation  14                             Prior year, credit for 21               Travel, meals, and entertainment    16
Direct deposit of refund  2 17,            Mutual savings banks conducting life 
Disclosure statement 7                       insurance business       20             U
Dividend income   10                                                                 Uniform capitalization rules 11
Dividends-received deduction     18 20-    N
Dues, membership and other      16         Name change    9                          W
                                           Net operating loss 16 24,                 What’s New   1
E                                          Nonaccrual experience method     10       When to file 3
Electronic deposit requirement    5                                                  Where to file 4
Electronic filing 3                        O                                         Who must file 2
Employee benefit programs   15             Other deductions   15                     Who must sign  4
Employer identification number (EIN)    9  Other income   10                         Worksheets:
Entities electing to be taxed as           Other taxes  21                            Schedule C   20
  corporations    2                        Overpaid estimated tax     22
Estimated tax:
  Penalty 5 17,                            P
Estimated tax payments    5
Extension of time to file 4                Partnership income (loss)     15
                                           Passive activity limitations  12
F                                          Penalties 6 17, 
                                           Pension, profit-sharing, etc. plans  15
Farming, corporations engaged in    2

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