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                                                                                                          Department of the Treasury
                                                                                                          Internal Revenue Service
2023

Instructions for Form 1120-C

U.S. Income Tax Return for Cooperative Associations

Section references are to the Internal Revenue Code                            Future Developments
unless otherwise noted.
Contents                                                                  Page For the latest information about developments related to 
Future Developments         . . . . . . . . . . . . . . . . . . . . . . . . 1  Form 1120-C and its instructions, such as legislation 
                                                                               enacted after they were published, go to IRS.gov/
What’s New    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
                                                                               Form1120c.
Photographs of Missing Children . . . . . . . . . . . . . . . .             1
The Taxpayer Advocate Service . . . . . . . . . . . . . . . . .             2
                                                                               What’s New
How To Make a Contribution To Reduce Debt Held 
by the Public         . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  Increase in penalty for failure to file.  For tax returns 
How To Get Forms and Publications . . . . . . . . . . . . . .               2  required to be filed in 2024, the minimum penalty for 
General Instructions      . . . . . . . . . . . . . . . . . . . . . . . . . 2  failure to file a return that is more than 60 days late has 
                                                                               increased to the smaller of the tax due or $485. See Late 
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2  filing of return, later.
Who Must File     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
                                                                               Expiration of 100% business meal expense deduc-
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
                                                                               tion.     The temporary 100% business meal expenses 
When To File    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  deduction for food and beverages provided by a 
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3  restaurant does not apply to amounts paid or incurred 
Assembling the Return         . . . . . . . . . . . . . . . . . . . . . . . 3  after 2022.
Tax Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    4  Corporate alternative minimum tax (CAMT).      For tax 
Estimated Tax Payments . . . . . . . . . . . . . . . . . . . . . .          4  years beginning after 2022, cooperatives must determine 
Interest and Penalties      . . . . . . . . . . . . . . . . . . . . . . . . 4  whether they are subject to the new CAMT and calculate 
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . .        5  CAMT if applicable. See the instructions for Schedule J, 
Accounting Period       . . . . . . . . . . . . . . . . . . . . . . . . . . 5  line 3. Also, see new Schedule K, Question 20.
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . . .           5  Elective payment election.  Applicable entities and 
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5  electing taxpayers can elect to treat certain credits as 
Other Forms and Statements That May Be                                         elective payments. Resulting overpayment may result in 
Required        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6  refunds. See the instructions for line 30i. Also, see the 
                                                                               Instructions for Form 3800.
Specific Instructions     . . . . . . . . . . . . . . . . . . . . . . . . . 6
Period Covered      . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6  Relief from additions to tax for underpayments appli-
Name and Address . . . . . . . . . . . . . . . . . . . . . . . . . .        6  cable to the new corporate alternative minimum tax. 
                                                                               For tax year 2023, the IRS will waive the penalty for failure 
Item A. Identifying Information         . . . . . . . . . . . . . . . . . . 7
                                                                               to make estimated tax payments for taxes attributable to a 
Item B. Employer Identification Number (EIN)                  . . . . . . . 7  CAMT liability. Affected cooperatives must still file the 
Item C. Type of Cooperative         . . . . . . . . . . . . . . . . . . . . 7  2023 Form 2220 even if they owe no estimated tax 
Item D. Initial Return, Final Return, Name Change,                             penalty. However, affected cooperatives may exclude the 
Address Change, or Amended Return                         . . . . . . . . . 8  CAMT tax liability when calculating the required annual 
Income  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  payment on Form 2220. Affected cooperatives must also 
Deductions    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10 include an amount of estimated tax penalty on line 31 of 
                                                                               Form 1120-C even if that amount is zero. Failure to follow 
Tax, Refundable Credits, and Payments                 . . . . . . . . . .   17
                                                                               these instructions could result in the cooperative receiving 
Schedule C. Dividends, Inclusions, and Special                                 a penalty notice that will require an abatement request to 
Deductions          . . . . . . . . . . . . . . . . . . . . . . . . . . .   18 apply the relief provided by Notice 2023-42. See Notice 
Schedule G. Allocation of Patronage and                                        2023-42, 2023-26 I.R.B. 1085, available at IRS.gov/irb/
Nonpatronage Income and Deductions                          . . . . . . .   21 2023-26_IRB#NOT-2023-42. Also, see the instructions for 
Schedule H. Deductions and Adjustments Under                                   line 31.
Section 1382          . . . . . . . . . . . . . . . . . . . . . . . . . .   22
Schedule J. Tax Computation             . . . . . . . . . . . . . . . . .   23 Photographs of Missing Children
Schedule K. Other Information . . . . . . . . . . . . . . . . .             25 The Internal Revenue Service is a proud partner with the 
Schedule L. Balance Sheets per Books                  . . . . . . . . . .   27 National Center for Missing & Exploited Children® 
                                                                               (NCMEC). Photographs of missing children selected by 
Schedule M-1. Reconciliation of Income (Loss) per                              the Center may appear in instructions on pages that would 
Books With Income per Return                    . . . . . . . . . . . . .   27
                                                                               otherwise be blank. You can help bring these children 
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 home by looking at the photographs and calling 

Jan 19, 2024                                                              Cat. No. 17211X

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1-800-THE-LOST (1-800-843-5678) if you recognize a • Search publications online by topic or keyword;
child. • Use the online Internal Revenue Code, regulations, or
other official guidance;
The Taxpayer Advocate Service • View Internal Revenue Bulletins (IRBs) published in the
The Taxpayer Advocate Service (TAS) is an independent last few years; and
organization within the IRS that helps taxpayers and • Sign up to receive local and national tax news by email.
protects taxpayer rights. TAS's job is to ensure that every
Tax forms and publications. The cooperative can view,
taxpayer is treated fairly and knows and understands their
print, or download all of the forms and publications it may
rights under the Taxpayer Bill of Rights.
need on IRS.gov/FormsPubs. Otherwise, the cooperative
As a taxpayer, the cooperative has rights that the IRS can go to IRS.gov/OrderForms to place an order and have
must abide by in its dealings with the cooperative. TAS forms mailed to it.
can help the cooperative if:
• Problems are causing financial difficulty for the General Instructions
business;
• The business is facing an immediate threat of adverse Purpose of Form
action; or Use Form 1120-C, U.S. Income Tax Return for
• The cooperative has tried repeatedly to contact the IRS Cooperative Associations, to report income, gains, losses,
but no one has responded, or the IRS hasn't responded deductions, credits, and to figure the income tax liability of
by the date promised. the cooperative.
TAS has offices in every state, the District of Columbia,
and Puerto Rico. The cooperative's local advocate's Who Must File
number is in its local directory and at Any corporation operating on a cooperative basis under
TaxpayerAdvocate.IRS.gov. The cooperative can also call section 1381 and allocating amounts to patrons on the
TAS at 877-777-4778. basis of business done with or for such patrons should file
Form 1120-C (including farmers' cooperatives under
TAS also works to resolve large-scale or systemic section 521 whether or not it has taxable income).
problems that affect many taxpayers. If the cooperative
knows of one of these broad issues, please report it to Exceptions. This does not apply to organizations which
TAS through the Systemic Advocacy Management are:
System at IRS.gov/SAMS. • Exempt from income tax under chapter 1 (other than
exempt farmers' cooperatives under section 521);
For more information, go to IRS.gov/Advocate. • Subject to Part II (section 591 and following),
subchapter H, chapter 1 (relating to mutual savings
How To Make a Contribution To banks);
Reduce Debt Held by the Public • Subject to subchapter L (section 801 and following),
To help reduce debt held by the public, make a check chapter 1 (relating to insurance companies); or
payable to “Bureau of the Fiscal Service.” Send it to: • Engaged in generating, transmitting, or otherwise
furnishing electric energy or providing telephone service
Bureau of the Fiscal Service to persons in rural areas.
Attn: Dept G
P.O. Box 2188 Where To File
Parkersburg, WV 26106-2188 If the cooperative's principal business, office, or agency is
located in the United States, file Form 1120-C at the
Or, enclose the check with the corporation's income tax following IRS center address:
return. In the memo section of the check, make a note that
it is a gift to reduce the debt held by the public. For Department of the Treasury
information on how to make this type of contribution Internal Revenue Service
online, go to www.treasurydirect.gov and click on “How To Ogden, UT 84201-0012
Make a Contribution To Reduce the Debt.”
If the cooperative's principal business, office, or agency
Do not add the contributions to any tax the cooperative is located in a foreign country or a U.S. territory, file Form
may owe. See the instructions for line 32 for details on 1120-C at the following IRS center address:
how to pay any tax the cooperative owes. Contributions to
reduce debt held by the public are deductible subject to Internal Revenue Service
the rules and limitations for charitable contributions. P.O. Box 409101
Ogden, UT 84409
How To Get Forms
and Publications When To File
Internet. You can access the IRS website 24 hours a day, Generally, a cooperative described in section 6072(d)
7 days a week, at IRS.gov to: must file its income tax return by the 15th day of the 9th
• Download forms, instructions, and publications; month after the end of its tax year.
• Order IRS products online;
• Research your tax questions online;

2 Instructions for Form 1120-C

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  Any cooperative not described in section 6072(d) must               A paid preparer may sign original or amended 
generally file its tax return by the 15th day of the 4th month TIP    returns by rubber stamp, mechanical device, or 
after the end of its tax year. However, a cooperative with a          computer software program.
fiscal tax year ending June 30 must file by the 15th day of 
the 3rd month after the end of its tax year. A cooperative     Paid Preparer Authorization
with a short tax year ending anytime in June will be treated 
                                                               If the cooperative wants to allow the IRS to discuss its 
as if the short year ended on June 30, and must file by the 
                                                               2023 tax return with the paid preparer who signed it, 
15th day of the 3rd month after the end of its tax year.
                                                               check the “Yes” box in the signature area of the return. 
  If the due date falls on a Saturday, Sunday, or legal        This authorization applies only to the individual whose 
holiday, the cooperative can file on the next business day.    signature appears in the “Paid Preparer Use Only” section 
                                                               of the cooperative's return. It does not apply to the firm, if 
Private Delivery Services                                      any, shown in that section.
Cooperatives can use certain private delivery services           If the “Yes” box is checked, the cooperative is 
(PDS) designated by the IRS to meet the “timely mailing        authorizing the IRS to call the paid preparer to answer any 
as timely filing” rule for tax returns. Go to IRS.gov/PDS for  questions that may arise during the processing of its 
the current list of designated services.                       return. The cooperative is also authorizing the paid 
                                                               preparer to:
  The PDS can tell you how to get written proof of the           Give the IRS any information that is missing from the 
                                                               •
mailing date.                                                  return;
  For the IRS mailing address to use if you’re using PDS,      • Call the IRS for information about the processing of the 
go to IRS.gov/PDSStreetAddresses.                              return or the status of any related refund or payment(s); 
                                                               and
        Private Delivery Services can't deliver items to       • Respond to certain IRS notices about math errors, 
  !     P.O. boxes. You must use the U.S. Postal Service       offsets, and return preparation.
CAUTION to mail any item to an IRS P.O. box address.
                                                                 The cooperative is not authorizing the paid preparer to 
                                                               receive any refund check, bind the cooperative to anything 
Extension of Time To File                                      (including any additional tax liability), or otherwise 
File Form 7004, Application for Automatic Extension of         represent the cooperative before the IRS.
Time To File Certain Business Income Tax, Information, 
and Other Returns, to request an extension of time to file.      The authorization will automatically end no later than 
Generally, the cooperative must file Form 7004 by the          the due date (excluding extensions) for filing the 
regular due date of the return. See the Instructions for       cooperative's 2024 tax return. If the cooperative wants to 
Form 7004.                                                     expand the paid preparer's authorization or revoke the 
                                                               authorization before it ends, see Pub. 947, Practice Before 
Who Must Sign                                                  the IRS and Power of Attorney.
The return must be signed and dated by:
                                                               Assembling the Return
• The president, vice president, treasurer, assistant 
treasurer, chief accounting officer; or                        To ensure that the cooperative's tax return is correctly 
• Any other cooperative officer (such as tax officer)          processed, attach all schedules and other forms after 
authorized to sign.                                            Form 1120-C, page 5, in the following order.
                                                                 1. Schedule N (Form 1120).
  If a return is filed on behalf of a cooperative by a           2. Form 4626.
receiver, trustee, or assignee, the fiduciary must sign the 
return, instead of the cooperative officer. Returns and          3. Form 4136.
forms signed by a receiver or trustee in bankruptcy on           4. Form 8978.
behalf of a cooperative must be accompanied by a copy of         5. Form 8941.
the order or instructions of the court authorizing signing of 
                                                                 6. Form 3800.
the return or form.
                                                                 7. Form 8936, Schedule A.
Paid Preparer Use Only section. If an employee of the 
cooperative completes Form 1120-C, the paid preparer             8. Additional schedules in alphabetical order.
section should remain blank. Anyone who prepares Form            9. Additional forms in numerical order.
1120-C but does not charge the cooperative should not            10. Supporting statements and attachments.
complete that section. Generally, anyone who is paid to 
prepare the return must sign and complete the section.           Complete every applicable entry space on Form 
                                                               1120-C. Do not enter “See Attached” or “Available Upon 
  The paid preparer must complete the required preparer        Request” instead of completing the entry spaces. If more 
information and:                                               space is needed on the forms or schedules, attach 
• Sign the return in the space provided for the preparer's     separate sheets using the same size and format as the 
signature,                                                     printed forms.
• Include their Preparer Tax Identification Number (PTIN),       If there are supporting statements and attachments, 
and                                                            arrange them in the same order as the schedules or forms 
• Give a copy of the return to the taxpayer.                   they support and attach them last. Show the totals on the 

Instructions for Form 1120-C                                                                                              3

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printed forms. Enter the cooperative's name and EIN on • The cooperative must use electronic funds transfer to
each supporting statement or attachment. make installment payments of estimated tax.
• If, after the cooperative figures and deposits estimated
Tax Payments tax, it finds that its tax liability for the year will be more or
Generally, the cooperative must pay any tax due in full no less than originally estimated, it may have to refigure its
later than the due date for filing its return (not including required installments. If earlier installments were
extensions). If the due date falls on a Saturday, Sunday, or underpaid, the cooperative may owe a penalty. See
legal holiday, the payment is due on the next day that isn't Estimated tax penalty.
a Saturday, Sunday, or legal holiday. See the instructions • If the cooperative overpaid estimated tax, it may be able
for line 32. to get a quick refund by filing Form 4466, Corporation
Application for Quick Refund of Overpayment of
Electronic Deposit Requirement Estimated Tax. See the instructions for lines 30b and 30c.
Cooperatives must use electronic funds transfer to make
See section 6655 and Pub. 542, Corporations, for more
all federal tax deposits (such as deposits of employment,
information on how to figure estimated taxes.
excise, and corporate income tax). Generally, electronic
funds transfers are made using the Electronic Federal Tax Estimated tax penalty. A cooperative that does not
Payment System (EFTPS). However, if the cooperative make estimated tax payments when due may be subject
does not want to use EFTPS, it can arrange for its tax to an underpayment penalty for the period of
professional, financial institution, payroll service, or other underpayment. Generally, a cooperative is subject to the
trusted third party to make deposits on its behalf. Also, it penalty if its tax liability is $500 or more and it did not
may arrange for its financial institution to submit a timely pay at least the smaller of:
same-day wire payment (discussed below) on its behalf. • Its tax liability for the current year, or
EFTPS is a free service provided by the Department of the • Its prior year's tax.
Treasury. Services provided by a tax professional, Use Form 2220, Underpayment of Estimated Tax by
financial institution, payroll service, or other third party Corporations, to see if the cooperative owes a penalty and
may have a fee. to figure the amount of the penalty. If Form 2220 is
To get more information about EFTPS or to enroll in completed, enter the penalty on line 31. See the
EFTPS, visit EFTPS.gov or call 800-555-4477. To contact instructions for line 31. Also see Relief from additions to
EFTPS using the Telecommunications Relay Services tax for underpayments applicable to the new corporate
(TRS), for people who are deaf, hard of hearing, or have a alternative minimum tax, earlier.
speech disability, dial 711 and provide the TRS assistant
Interest and Penalties
the 800-555-4477 number above or 800-733-4829.
Depositing on time. For deposits made by EFTPS to be If the cooperative receives a notice about
on time, the cooperative must submit the deposit by 8 p.m. ! penalties after it files its return, send the IRS an
Eastern time the day before the date the deposit is due. If CAUTION explanation and we will determine if the
the cooperative uses a third party to make deposits on its cooperative meets reasonable cause criteria. Do not
behalf, they may have different cutoff times. attach an explanation when the cooperative's return is
filed.
Same-day wire payment option. If the cooperative fails
to submit a deposit transaction on EFTPS by 8 p.m. Interest. Interest is charged on taxes paid late even if an
Eastern time the day before the date a deposit is due, it extension of time to file is granted. Interest is also charged
can still make the deposit on time by using the Federal Tax on penalties imposed for failure to file, negligence, fraud,
Collection Service (FTCS). To use the same-day wire substantial valuation misstatements, substantial
payment method, the cooperative will need to make understatements of tax, and reportable transaction
arrangements with its financial institution ahead of time understatements from the due date (including extensions)
regarding availability, deadlines, and costs. The to the date of payment. The interest charge is figured at a
cooperative's financial institution may charge a fee for rate determined under section 6621.
payments made this way. To learn more about the
Late filing of return. A cooperative that does not file its
information the cooperative will need to provide to its
tax return by the due date, including extensions, may be
financial institution to make a same-day wire payment, go
penalized 5% of the unpaid tax for each month or part of a
to IRS.gov/SameDayWire.
month the return is late, up to a maximum of 25% of the
Estimated Tax Payments unpaid tax. The minimum penalty for a tax return required
to be filed in 2024 that is over 60 days late is the smaller of
Generally, the following rules apply to the cooperative's
the tax due or $485. The penalty will not be imposed if the
payments of estimated tax.
cooperative can show that the failure to file on time was
• The cooperative must make installment payments of
due to reasonable cause. See Caution, earlier.
estimated tax if it expects its total tax for the year (less
applicable credits) to be $500 or more. Late payment of tax. Generally, a cooperative that does
• The installments are due by the 15th day of the 4th, 6th, not pay the tax when due may be penalized / of 1% of 1 2
9th, and 12th months of the tax year. If any due date falls the unpaid tax for each month or part of a month the tax is
on a Saturday, Sunday, or legal holiday, the payment of the not paid, up to a maximum of 25% of the unpaid tax. See
installment is due on the next regular business day. Caution, earlier.

4 Instructions for Form 1120-C

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Trust fund recovery penalty. This penalty may apply if Change in accounting method. Generally, the
certain excise, income, social security, and Medicare cooperative must get IRS consent to change either an
taxes that must be collected or withheld are not collected overall method of accounting or the accounting treatment
or withheld, or these taxes are not paid. These taxes are of any material item for income tax purposes. To obtain
generally reported on: consent, the cooperative must generally file Form 3115,
• Form 720, Quarterly Federal Excise Tax Return; Application for Change in Accounting Method, during the
• Form 941, Employer's QUARTERLY Federal Tax tax year for which the change is requested. See the
Return; Instructions for Form 3115 and Pub. 538 for more
• Form 943, Employer's Annual Federal Tax Return for information and exceptions. Also see the Instructions for
Agricultural Employees; Form 3115 for procedures that may apply for obtaining
• Form 944, Employer's ANNUAL Federal Tax Return; or automatic consent to change certain methods of
• Form 945, Annual Return of Withheld Federal Income accounting, non-automatic change procedures, and
Tax. reduced Form 3115 filing requirements.
The trust fund recovery penalty may be imposed on all Section 481(a) adjustment. If the cooperative's
persons who are determined by the IRS to have been taxable income for the current tax year is figured under a
responsible for collecting, accounting for, or paying over method of accounting different from the method used in
these taxes, and who acted willfully in not doing so. The the preceding tax year, the cooperative may have to make
penalty is equal to the unpaid trust fund tax. See the an adjustment under section 481(a) to prevent amounts of
Instructions for Form 720; Pub. 15 (Circular E), Employer's income or expense from being duplicated or omitted. See
Tax Guide; or Pub. 51 (Circular A), Agricultural Employer's section 481(d). Also, see the Instructions for Form 3115.
Tax Guide, for details, including the definition of If the net section 481(a) adjustment is positive, report
responsible persons. the ratable portion on Form 1120-C, line 9, as other
income. If the net section 481(a) adjustment is negative,
Note. The trust fund recovery penalty will not apply to report it on Form 1120-C, line 23, as a deduction.
any amount of trust fund taxes an employer holds back in
anticipation of the credit for qualified sick and family leave Accounting Period
wages or the employee retention credit that they are A cooperative must figure its taxable income on the basis
entitled to. See Pub. 15 and Pub. 51 for more information. of a tax year. A tax year is the annual accounting period a
Other penalties. Other penalties can be imposed for cooperative uses to keep its records and report its income
negligence, substantial understatement of tax, reportable and expenses. Generally, cooperatives can use a
transaction understatements, and fraud. See sections calendar year or a fiscal year.
6662, 6662A, and 6663. Change of tax year. Generally, a cooperative must get
the consent of the IRS before changing its tax year by
Accounting Methods
filing Form 1128, Application to Adopt, Change, or Retain
Figure taxable income using the method of accounting a Tax Year. However, under certain conditions, exceptions
regularly used in keeping the cooperative's books and may apply. See the Instructions for Form 1128 and Pub.
records. In all cases, the method used must clearly show 538 for more information.
taxable income. Permissible methods include:
• Cash, Rounding Off to
• Accrual, or
• Any other method authorized by the Internal Revenue Whole Dollars
Code. The cooperative may enter decimal points and cents
when completing its return. However, the cooperative
Certain cooperatives must use an accrual method of should round off cents to whole dollars on its return,
accounting. An exception applies for a small business forms, and schedules to make completing its return easier.
taxpayer (defined below). The cooperative must either round off all amounts on its
See Pub. 538, Accounting Periods and Methods, for return to whole dollars, or use cents for all amounts. To
more information. round, drop amounts under 50 cents and increase
amounts from 50 to 99 cents to the next dollar. For
Small business taxpayer. For tax years beginning in example, $8.40 rounds to $8 and $8.50 rounds to $9.
2023, a cooperative qualifies as a small business taxpayer
if (a) it has average annual gross receipts of $29 million or If two or more amounts must be added to figure the
less for the 3 prior tax years, and (b) it is not a tax shelter amount to enter on a line, include cents when adding the
(as defined in section 448(d)(3)). amounts and round off only the total.

A small business taxpayer can account for inventory by Recordkeeping
(a) treating the inventory as non-incidental materials and
Keep the cooperative's records for as long as they may be
supplies, or (b) conforming to its treatment of inventory in
needed for the administration of any provision of the
an applicable financial statement (as defined in section
Internal Revenue Code. Usually, records that support an
451(b)(3)). If it does not have an applicable financial
item of income, deduction, or credit on the return must be
statement, it can use the method of accounting used in its
kept for 3 years from the date the return is due or filed,
books and records prepared according to its accounting
whichever is later. Keep records that verify the
procedures.
cooperative's basis in property for as long as they are

Instructions for Form 1120-C 5

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needed to figure the basis of the original or replacement 1.351-3(b) on or with its return for the tax year of the
property. exchange, unless all the required information is included
in any statement(s) provided by a significant transferor
The cooperative should keep copies of all filed returns.
that is attached to the same return for the same section
They help in preparing future and amended returns and in
351 exchange.
the calculation of earnings and profits.
Dual consolidated losses. If a cooperative incurs a dual
Other Forms and Statements That consolidated loss (as defined in Regulations section
May Be Required 1.1503(d)-1(b)(5)), the cooperative (or consolidated
group) may need to attach a domestic use agreement
Reportable transaction disclosure statement. and/or annual certification, as provided in Regulations
Disclose information for each reportable transaction in sections 1.1503(d)-6(d) and (g).
which the cooperative participated. Form 8886,
Election to reduce basis under section 362(e)(2)(C).
Reportable Transaction Disclosure Statement, must be
If property is transferred to a cooperative in transfers
filed for each tax year that the federal income tax liability
subject to section 362(e)(2), the transferor and the
of the cooperative is affected by its participation in the
transferee cooperative may elect, under section 362(e)(2)
transaction. The following are reportable transactions.
(C), to reduce the transferor's basis in the stock received
1. Any listed transaction, which is a transaction that is instead of reducing the transferee corporation's basis in
the same as or substantially similar to one of the types of the property transferred. Once made, the election is
transactions that the IRS has determined to be a tax irrevocable. For more information, see section 362(e)(2)
avoidance transaction and identified by notice, regulation, and Regulations section 1.362-4. If an election is made, a
or other published guidance as a listed transaction. statement must be filed in accordance with Regulations
2. Any transaction offered under conditions of section 1.362-4(d)(3).
confidentiality for which the cooperative (or a related Other forms and statements. See Pub. 542,
party) paid an advisor a fee of at least $250,000. Corporations, for a list of other forms and statements that
3. Certain transactions for which the cooperative (or a a cooperative may need to file in addition to the forms and
related party) has contractual protection against statements discussed throughout these instructions.
disallowance of the tax benefits.
4. Certain transactions resulting in a loss of at least
$10 million in any single year or $20 million in any Specific Instructions
combination of years.
Period Covered
5. Any transaction identified by the IRS by notice, File the 2023 return for calendar year 2023 and fiscal
regulation, or other published guidance as a “transaction years that begin in 2023 and end in 2024. For a fiscal or
of interest.” short tax year return, fill in the tax year space at the top of
For more information, see Regulations section the form.
1.6011-4. Also, see the Instructions for Form 8886.
The 2023 Form 1120-C can also be used if:
Penalties. The cooperative may have to pay a penalty
if it is required to disclose a reportable transaction under • The cooperative has a tax year of less than 12 months
that begins and ends in 2024, and
section 6011 and fails to properly complete and file Form
8886. Penalties may also apply under section 6707A if the • The 2024 Form 1120-C is not available at the time the
cooperative is required to file its return.
cooperative fails to file Form 8886 with its cooperative
return, fails to provide a copy of Form 8886 to the Office of The cooperative must show its 2024 tax year on the
Tax Shelter Analysis (OTSA), or files a form that fails to 2023 Form 1120-C and take into account any tax law
include all the information required (or includes incorrect changes that are effective for tax years beginning after
information). Other penalties, such as an accuracy-related December 31, 2023.
penalty under section 6662A, may also apply. See the
Instructions for Form 8886 for details on these and other Name and Address
penalties. Enter the cooperative's true name (as set forth in the
Reportable transactions by material advisors. charter or other legal document creating it), address, and
Material advisors to any reportable transaction must EIN on the appropriate lines. Enter the address of the
disclose certain information about the reportable cooperative's principal office or place of business. Include
transaction by filing Form 8918 with the IRS. For details, the suite, room, or other unit number after the street
see the Instructions for Form 8918. address. If the post office does not deliver mail to the
street address and the cooperative has a P.O. box, show
Transfers to a cooperative controlled by the transfer- the box number instead.
or. Every significant transferor (as defined in Regulations
section 1.351-3(d)(1)) that receives stock of a cooperative Note. Do not use the address of the registered agent for
in exchange for property in a nonrecognition event must the state in which the cooperative is incorporated. For
include the statement required by Regulations section example, if the cooperative is incorporated in Delaware or
1.351-3(a) on or with the transferor's tax return for the tax Nevada and the cooperative's principal office is located in
year of the exchange. The transferee cooperative must Little Rock, Arkansas, the cooperative should enter the
include the statement required by Regulations section Little Rock address.

6 Instructions for Form 1120-C

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If the cooperative receives its mail in care of a third Schedule M-3 (Form 1120), must either (i) complete
party (such as an accountant or an attorney), enter on the Schedule M-3 (Form 1120) entirely, or (ii) complete
street address line “C/O” followed by the third party's Schedule M-3 (Form 1120) through Part I, and complete
name and street address or P.O. box. Form 1120-C, Schedule M-1, instead of completing Parts
II and III of Schedule M-3 (Form 1120). If the cooperative
If the cooperative has a foreign address, include the chooses to complete Schedule M-1 instead of completing
city or town, state or province, country, and foreign postal Parts II and III of Schedule M-3, the amount on
code. Do not abbreviate the country name. Follow the Schedule M-1, line 1, must equal the amount on
country's practice for entering the name of the state or Schedule M-3, Part I, line 11. See the Instructions for
province and postal code. Schedule M-3 for more details. Also, see the instructions
Item A. Identifying Information for Schedule M-1, later.
If you are filing Schedule M-3, check Item A, box 2, to
Consolidated return. Cooperatives filing a consolidated indicate that Schedule M-3 is attached.
return must check box 1, and attach Form 851, Affiliations
Schedule, and other supporting statements to the return. Form 1120 filed previous year. Check box 3 if the
Also, for the first year a subsidiary cooperative is being cooperative filed Form 1120 in a prior year as a
included in a consolidated return, attach Form 1122 to the subchapter T cooperative.
parent's consolidated return. Attach a separate Form 1122
for each new subsidiary being included in the Item B. Employer Identification
consolidated return. Number (EIN)
If the cooperative is a farmers' tax exempt Enter the cooperative's EIN. If the cooperative does not
have an EIN, it must apply for one. An EIN can be applied
CAUTION file a consolidated return.
! cooperative and checked Item C, box 1, it cannot for:
• Online. Go to IRS.gov/EIN. The EIN is issued
File supporting statements for each cooperative/ immediately once the application information is validated.
corporation included in the consolidated return. Do not • By faxing or mailing Form SS-4, Application for
use Form 1120-C as a supporting statement. On the Employer Identification Number.
supporting statement, use columns to show the following,
Cooperatives located in the United States or U.S.
both before and after adjustments.
territories can use the online application. Foreign
1. Items of gross income and deductions. CAUTION! corporations should call 267-941-1099 (not a
2. A computation of taxable income. toll-free number) for more information on obtaining an EIN.
3. Balance sheets as of the beginning and end of the See the Instructions for Form SS-4.
tax year.
EIN applied for, but not received. If the cooperative
4. A reconciliation of income per books with income has not received its EIN by the time the return is due, enter
per return. “Applied for” and the date you applied in the space for the
5. A reconciliation of retained earnings. EIN.
Enter on Form 1120-C the totals for each item of For more information, see the Instructions for Form
income, gain, loss, expense, or deduction, net of SS-4.
eliminating entries for intercompany transactions between
cooperatives/corporations within the consolidated group. Item C. Type of Cooperative
Attach consolidated balance sheets and a reconciliation of Farmers' tax exempt cooperative. Check the “Farmers'
consolidated retained earnings. tax exempt cooperative” box if the cooperative applied for
The cooperative does not have to provide the and received status as a tax exempt farmers', fruit
TIP information requested in (3), (4), and (5) above if growers', or like association, organized and operated on a
its total receipts (page 1, lines 1a plus lines 4 cooperative basis, as described in section 521.
through 9) and its total assets at the end of the tax year If the cooperative has submitted Form 1028,
(Schedule L, line 13(d)) are less than $250,000. See Application for Recognition of Exemption, but has not
Schedule K, Question 14. received a determination letter from the IRS, enter
“Application Pending” on Form 1120-C at the top of
For more information on consolidated returns, see the page 1.
regulations under section 1502.
Nonexempt cooperative. All other subchapter T
Schedule M-3 (Form 1120). A cooperative with total cooperatives including farmers' cooperatives without
assets (non-consolidated or consolidated for all section 521 exempt status, organized and operated as
cooperatives/corporations included with the consolidated described under Who Must File, earlier, should check the
tax group) of $10 million or more on the last day of the tax “Nonexempt cooperative” box.
year must file Schedule M-3 (Form 1120) instead of Form
1120-C, Schedule M-1.
Cooperatives that (a) are required to file Schedule M-3
(Form 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 1120) and voluntarily file

Instructions for Form 1120-C 7

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Item D. Initial Return, Final Return, • For rules that allow a limited deferral of advance
payments beyond the current tax year, see section 451(c).
Name Change, Address Change, or Also, see Regulations sections 1.451-8(c), (d), and (e).
For applicability dates, see Regulations section
Amended Return
1.451-8(h).
• If this is the cooperative's first return, check the “Initial • For information on adopting or changing to a
return” box. permissible method for reporting certain advance
• If this is the cooperative's final return and it will no payments for services and certain goods by an accrual
longer exist, file Form 1120-C and check the “Final return” method cooperative, see the Instructions for Form 3115.
box.
• If the cooperative changed its name since it last filed a Installment sales. Generally, the installment method
return, check the “Name change” box. Generally, a cannot be used for dealer dispositions of property. A
cooperative must also have amended its articles of “dealer disposition” is any disposition of (a) personal
incorporation and filed the amendment with the state in property by a person who regularly sells or otherwise
which it was incorporated. disposes of personal property of the same type on the
• If the cooperative has changed its address since it last installment plan, or (b) real property held for sale to
filed a return (including a change to an “in care of” customers in the ordinary course of the taxpayer's trade or
address), check the “Address change” box. business.
• If the cooperative must change its originally filed return The restrictions on using the installment method do not
for any year, it should file a new return including any apply to the following.
required attachments. Use the revision of the form • Dispositions of property used or produced in the trade
applicable to the year being amended. The amended or business of farming.
return must provide all the information called for by the • Certain dispositions of timeshares and residential lots
form and instructions, not just the new or corrected reported under the installment method for which the
information. Check the “Amended return” box. cooperative elects to pay interest under section 453(l)(3).
Enter on line 1a (and carry to line 3) the gross profit on
Note. If a change in address or responsible party occurs
collections from installment sales. Attach a statement
after the return is filed, use Form 8822-B, Change of
showing the following information for the current and the 3
Address or Responsible Party—Business, to notify the
preceding years: (a) gross sales, (b) cost of goods sold,
IRS of the new address. For more information, see the
(c) gross profits, (d) percentage of gross profits to gross
instructions for Form 8822-B.
sales, (e) amount collected, and (f) gross profit on the
amount collected.
Income For sales of timeshares and residential lots reported
Except as otherwise provided in the Internal Revenue under the installment method, if the cooperative elects to
Code, gross income includes all income from whatever pay interest under section 453(l)(3), the cooperative's
source derived. income tax is increased by the interest payable under
Exception for income from qualifying shipping activi- section 453(l)(3). Report this addition to tax on
ties. Gross income does not include income from Schedule J, line 8z.
qualifying shipping activities if the cooperative makes an Nonaccrual experience method for service providers.
election under section 1354 to be taxed on its notional Cooperatives are not required to accrue certain amounts
shipping income (as defined in section 1353) at the to be received from the performance of services that,
highest corporate rate. If the election is made, the based on their experience, will not be collected if:
cooperative may generally not claim any loss, deduction, • The services are in the fields of health, law,
or credit with respect to qualifying shipping activities. A engineering, architecture, accounting, actuarial science,
cooperative making this election may also elect to defer performing arts, or consulting; or
gain on the disposition of a qualifying vessel. • The cooperative meets the section 448(c) gross
Use Form 8902, Alternative Tax on Qualifying Shipping receipts test for all prior years.
Activities, to figure the tax. Include the alternative tax on This provision does not apply to any amount if interest
Schedule J, line 8c. is required to be paid on the amount or if there is any
penalty for failure to timely pay the amount. See
Line 1. Gross Receipts or Sales Regulations section 1.448-3 for more information on the
Enter gross receipts or sales from all business operations nonaccrual experience method, including information on
except those that must be reported on lines 4 safe harbor methods.
through 9. Special rules apply to certain income, as For information on a book safe harbor method of
discussed below. accounting for cooperatives that use the nonaccrual
Advance payments. In general, advance payments must experience method of accounting, see Rev. Proc.
be included in income in the year of receipt. For 2011-46, 2011-42 I.R.B. 518, available at IRS.gov/irb/
exceptions to this general rule for cooperatives that use 2011-42_IRB#RP-2011-46, or any successor. Also, see
the accrual method of accounting, see the following. the Instructions for Form 3115 for procedures to obtain
• To report income from long-term contracts, see section automatic consent to change to this method or make
460. certain changes within this method.

8 Instructions for Form 1120-C

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Cooperatives that qualify to use the nonaccrual • Other property (except nonqualified written notices of
experience method should attach a statement to its return allocation), based on earnings of that cooperative either
showing total gross receipts, the amount not accrued as a from business done with or for the United States or any of
result of the application of section 448(d)(5), and the net its agencies (or from sources other than patronage, such
amount accrued. Enter the net amount on line 1a. as investment income).
3. Qualified written notices of allocation at their stated
Line 2. Cost of Goods Sold dollar amounts and property at its fair market value (FMV).
Complete and attach Form 1125-A, Cost of Goods Sold, if
4. Amounts received on the redemption, sale, or other
applicable. Enter on Form 1120-C, line 2, the amount from
disposition of nonqualified written notices of allocation.
Form 1125-A, line 8. See Form 1125-A and its
instructions. Generally, patronage dividends from purchases of
capital assets or depreciable property are not includible in
Line 4. Dividends and Inclusions income but must be used to reduce the basis of the
See the instructions for Schedule C, later. Complete assets. See section 1385(b) and the related regulations.
Schedule C and enter on line 4 the amount from 5. Amounts received (or the stated dollar value of
Schedule C, line 23. qualified per-unit retain certificates received) from the sale
or redemption of nonqualified per-unit retain certificates.
Note. Do not report patronage dividends received on 6. Per-unit retain allocations received (except
Schedule C. Report income from patronage dividends and nonqualified per-unit retain certificates). See section
per-unit retain allocations on line 9. 1385.

Line 5. Interest Note. Payments from the Commodity Credit Corporation
Enter taxable interest on U.S. obligations and on loans, to a farmers' cooperative for certain expenses of the
notes, mortgages, bonds, bank deposits, corporate co-op's farmers-producers under a “reseal” program of the
bonds, tax refunds, etc. Do not offset interest expense U.S. Department of Agriculture are patronage-source
against interest income. Special rules apply to interest income that may give rise to patronage dividends under
income from certain below-market-rate loans. See section section 1382(b)(1).
7872 for details.
Other. Examples of other income to report on line 9
Note. Report tax-exempt interest income on Schedule K, include the following.
Item 10. Also, if required, include the same amount on • Recoveries of bad debts deducted in prior years under
Schedule M-1, line 7, or Schedule M-3 (Form 1120), Part the specific charge-off method.
II, line 13, if applicable. • Any amount includible in income from Form 6478,
Biofuel Producer Credit.
Line 6. Gross Rents and Royalties • Any amount includible in income from Form 8864,
Enter the gross amount received from the rental of Biodiesel, Renewable Diesel, or Sustainable Aviation
property and royalties. Deduct expenses such as repairs, Fuels Credit.
interest, taxes, and depreciation on the applicable lines. • Refunds of taxes deducted in prior years to the extent
they reduced the amount of tax imposed. See section 111
Line 9. Other Income and the related regulations. Do not offset current-year
Enter any other taxable income not reported on lines 1 taxes against any tax refunds.
through 8. List the type and amount of income on an • Ordinary income from trade or business activities of a
attached statement. If the cooperative has only one item partnership (from Schedule K-1 (Form 1065)). Do not
of other income, describe it in parentheses on line 9. offset ordinary losses against ordinary income. Instead,
include the losses on line 23. Show the partnership's
Patronage dividends and per-unit retain allocations. name, address, and EIN on a separate statement
Include on line 9 the patronage dividends and per-unit attached to this return. If the amount entered is from more
retain allocations listed below. Attach a statement listing than one partnership, identify the amount from each
the name of each declaring association from which the partnership.
cooperative received income from patronage dividends • The transferred loss amount identified as "Section 91
and per-unit retain allocations, and the total amount Transferred Loss Amount," which is required to be
received from each association. recognized when substantially all the assets of a foreign
Include the items listed below. branch are transferred to a specified 10%-owned foreign
1. Patronage dividends received in: corporation (as defined in section 245A(b)) with respect to
• Money, which the corporation was a U.S. shareholder immediately
• Qualified written notices of allocation, or after the transfer. See section 91.
• Other property (except nonqualified written notices of • The ratable portion of any net positive section 481(a)
allocation). adjustment. See Section 481(a) adjustment, earlier.
• Part or all of the proceeds received from certain
2. Nonpatronage distributions received on a patronage
cooperative-owned life insurance contracts issued after
basis from tax-exempt farmers' cooperatives in:
August 17, 2006. See section 101(j) for details. Form
• Money;
8925, Report of Employer-Owned Life Insurance
• Qualified written notices of allocation; or
Contracts, may also be required. See Form 8925 and its
instructions.

Instructions for Form 1120-C 9

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• Income from cancellation of debt (COD) for the through 1.263A-3. For more information on non-small
repurchase of a debt instrument for less than its adjusted business taxpayers, see Regulations section 1.263A-4 .
issue price. For rules for property produced in a farming business, see
• The cooperative's share of the following income from Pub. 225.
Form 8621, Information Return by a Shareholder of a Transactions between related taxpayers. Generally,
Passive Foreign Investment Company or Qualified an accrual basis taxpayer can only deduct business
Electing Fund. expenses and interest owed to a related party in the year
1. Ordinary earnings of a qualified electing fund payment is included in the income of the related party.
(QEF). See sections 163(e)(3), 163(j), and 267(a)(2) for the
2. Gain or loss from marking passive foreign limitations on deductions for unpaid interest and
investment company (PFIC) stock to market. expenses.
3. Gain or loss from sale or other disposition of section Limitations on business interest expense. Business
1296 stock. interest expense may be limited. See section 163(j) and
Form 8990. Also, see Limitation on deduction in the
4. Excess distributions from a section 1291 fund
instructions for line 16 and Schedule K, Questions 17 and
allocated to the current year and pre-PFIC years, if any.
18, later.
See Form 8621 and the Instructions for Form 8621 for
Section 291 limitations. Cooperatives may be required
details.
to adjust deductions for depletion of iron ore and coal,
• Any amount of payroll tax credit taken by an employer
intangible drilling, exploration and development costs, and
on its 2023 employment tax returns (Forms 941, 943, and
the amortizable basis of pollution control facilities. See
944) for qualified paid sick and qualified paid family leave
section 291 to determine the amount of the adjustment,
under FFCRA and ARP (both the nonrefundable and
later.
refundable portions). The cooperative must include the full
amount of the credit for qualified sick and family leave Election to deduct business start-up and organiza-
wages in gross income for the tax year that includes the tional costs. A cooperative can elect to deduct a limited
last day of any calendar quarter in which the credit is amount of start-up and organizational costs it paid or
allowed. incurred. Any remaining costs must generally be
amortized over a 180-month period. See sections 195 and
Note. A credit is available only if the leave was taken after 248 and the related regulations.
March 31, 2020, and before October 1, 2021, and only Time for making an election. The cooperative
after the qualified leave wages were paid, which might generally elects to deduct start-up or organizational costs
under certain circumstances not occur until a quarter after by claiming the deduction on its income tax return filed by
September 30, 2021, including quarters in 2023. the due date (including extensions) for the tax year in
which the active trade or business begins. For more
Deductions details, see the Instructions for Form 4562.
Limitations on Deductions If the cooperative timely filed its return for the year
without making an election, it can still make an election by
Section 263A uniform capitalization rules. The filing an amended return within 6 months of the due date
uniform capitalization rules of section 263A generally of the return (excluding extensions). Clearly indicate the
require cooperatives to capitalize, or include in inventory, election on the amended return and enter “Filed pursuant
certain costs. to section 301.9100-2” at the top of the amended return.
Cooperatives subject to the section 263A uniform File the amended return at the same address the
capitalization rules are required to capitalize: cooperative filed its original return. The election applies
1. Direct costs of assets produced or acquired for when figuring taxable income for the current tax year and
resale, and all subsequent years.
2. Certain indirect costs (including taxes) that are The cooperative can choose to forgo the elections
properly allocable to property produced or acquired for above by affirmatively electing to capitalize its start-up or
resale. organizational costs on its income tax return filed by the
due date (including extensions) for the tax year in which
The costs required to be capitalized under section the active trade or business begins.
263A are not deductible until the property (to which the
costs relate) is sold, used, or otherwise disposed of by the Note. The election to either amortize or capitalize start-up
cooperative. The cooperative recovers these costs costs is irrevocable and applies to all start-up costs that
through depreciation, amortization, or costs of goods sold. are related to the trade or business.
A small business taxpayer (defined earlier) is not Report the deductible amount of start-up and
required to capitalize costs under section 263A. A small organizational costs and any amortization on line 23. For
business taxpayer that wants to discontinue capitalizing amortization that begins during the current tax year,
costs under section 263A must change its method of complete and attach Form 4562, Depreciation and
accounting. See section 263A(i), Regulation section Amortization.
1.263A-1(j), and the Instructions for Form 3115.
For more information on the uniform capitalization rules,
see Pub. 538. Also, see Regulations sections 1.263A-1

10 Instructions for Form 1120-C

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Passive activity limitations. Limitations on passive Limitations on deductions related to property leased
activity losses and credits under section 469 apply to to tax-exempt entities. If a cooperative leases property
closely held cooperatives (defined later). to a governmental or other tax-exempt entity, the
Generally, the two kinds of passive activities are: cooperative cannot claim deductions related to the
• Trade or business activities in which the cooperative did property to the extent that they exceed the cooperative's
not materially participate for the tax year, and income from the lease payments. This disallowed
• Rental activities, regardless of its participation. tax-exempt use loss can be carried over to the next tax
year and treated as a deduction with respect to the
Cooperatives subject to the passive activity limitations
property for that tax year. See section 470(d) for
must complete Form 8810 to compute their allowable
exceptions.
passive activity loss and credit. Before completing Form
8810, see Temporary Regulations section 1.163-8T, which Line 11. Compensation of Officers
provides rules for allocating interest expense among
Enter deductible officers' compensation on line 11. Do not
activities. If a passive activity is also subject to the at-risk
include compensation deductible elsewhere on the return,
rules of section 465, or the tax-exempt use loss rules of
such as amounts included in cost of goods sold, elective
section 470, those rules apply before the passive loss
contributions to a section 401(k) cash or deferred
rules.
arrangement, or amounts contributed under a salary
For more information, see section 469, the related reduction SEP agreement or a SIMPLE IRA plan.
regulations, and Pub. 925, Passive Activity and At-Risk
Rules. If the cooperative's total receipts (line 1a plus lines 4
Closely held cooperatives. A cooperative is “closely through 9) are $500,000 or more, complete Form 1125-E,
held” (as defined in section 469(j)(1)) if at any time during Compensation of Officers. On Form 1120-C, enter on
the last half of the tax year more than 50% in value of its line 11 the amount from Form 1125-E, line 4.
outstanding stock is owned, directly or indirectly, by or for
Line 12. Salaries and Wages
not more than five individuals.
Enter the total salaries and wages paid for the tax year. Do
Certain organizations are treated as individuals for
not include salaries and wages deductible elsewhere on
purposes of this test. See section 542(a)(2). For rules for
the return, such as amounts included in officers'
determining stock ownership, see section 544 (as
compensation, cost of goods sold, elective contributions
modified by section 465(a)(3)).
to a section 401(k) cash or deferred arrangement, or
Reducing certain expenses for which credits are al- amounts contributed under a salary reduction SEP
lowable. If the cooperative claims certain credits, it may agreement or a SIMPLE IRA plan.
need to reduce the otherwise allowable deductions for
expenses used to figure the credit. This applies to credits If the cooperative provided taxable fringe benefits to its
such as the following. employees, such as personal use of a car, do not deduct
• Work opportunity credit (Form 5884). as wages the amount allocated for depreciation and other
• Credit for increasing research activities (Form 6765). expenses claimed on lines 18 and 23.
• Orphan drug credit (Form 8820). If the cooperative claims a credit for any wages
• Disabled access credit (Form 8826). ! paid or incurred, it may need to reduce any
• Empowerment zone employment credit (Form 8844). CAUTION corresponding deduction for officers'
• Credit for employer social security and Medicare taxes compensation and salaries and wages. See Reducing
paid on certain employee tips (Form 8846). certain expenses for which credits are allowable, earlier.
• Credit for small employer pension plan start-up costs
(Form 8881). Line 13. Bad Debts
• Credit for employer-provided childcare facilities and
Enter the total debts that became worthless in whole or in
services (Form 8882).
part during the tax year. A cooperative that uses the cash
• Low sulfur diesel fuel production credit (Form 8896).
method of accounting cannot claim a bad debt deduction
• Credit for employer differential wage payments (Form
unless the amount was previously included in income.
8932).
• Credit for small employer health insurance premiums Line 14. Rents
(Form 8941).
• Employer credit for paid family and medical leave (Form If the cooperative rented or leased a vehicle, enter the
8994). total annual rent or lease expense paid or incurred during
the year. Also, complete Form 4562, Part V. If the
If the cooperative has any of the credits listed above, cooperative leased a vehicle for a term of 30 days or
figure the current-year credit before figuring the deduction more, the deduction for vehicle lease expense may have
for expenses on which the credit is based. If the to be reduced by an amount includible in income called
cooperative capitalized any costs on which it figured the the inclusion amount. The cooperative may have an
credit, it may need to reduce the amount capitalized by the inclusion amount if:
credit attributable to these costs.
See the instructions for the form used to figure the
applicable credit for more details.

Instructions for Form 1120-C 11

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And the vehicle's FMV • Interest on indebtedness incurred or continued to
on the first day of the purchase or carry obligations if the interest is wholly
The lease term began: lease exceeded: exempt from income tax. For exceptions, see section
Cars (excluding Trucks and Vans) 265(b).
After 12/31/22 but before 1/1/24 . . . . . . . $60,000 • For cash basis taxpayers, prepaid interest allocable to
years following the current tax year. For example, a cash
After 12/31/21 but before 1/1/23 . . . . . . . $56,000
basis calendar year taxpayer who in 2023 prepaid interest
After 12/31/20 but before 1/1/22 . . . . . . $51,000 allocable to any period after 2023 can deduct only the
After 12/31/17 but before 1/1/21 . . . . . . . $50,000 amount allocable to 2023.
After 12/31/12 but before 1/1/18 . . . . . . . $19,000 • Interest and carrying charges on straddles. Generally,
Trucks and Vans these amounts must be capitalized. See section 263(g).
After 12/31/22 but before 1/1/24 . . . . . . . $60,000 • Interest on debt allocable to the production of
After 12/31/21 but before 1/1/23 . . . . . . . $56,000 designated property by a cooperative for its own use or for
After 12/31/20 but before 1/1/22 . . . . . . $51,000 sale. The cooperative must capitalize this interest. Also,
capitalize any interest on debt allocable to an asset used
After 12/31/17 but before 1/1/21 . . . . . . . $50,000
to produce the property. See section 263A(f) and
After 12/31/13 but before 1/1/18 . . . . . . . $19,500 Regulations sections 1.263A-8 through 1.263A-15 for
After 12/31/09 but before 1/1/14 . . . . . . . $19,000 definitions and more information.
• Interest paid or incurred on any portion of an
underpayment of tax that is attributable to an
See Pub. 463, Travel, Gift, and Car Expenses, for understatement arising from an undisclosed listed
instructions on figuring the inclusion amount. The transaction or an undisclosed reportable avoidance
inclusion amount for lease terms beginning in 2024 will be transaction (other than a listed transaction) entered into in
published in the Internal Revenue Bulletin in early 2024. tax years beginning after October 22, 2004.
Line 15. Taxes and Licenses Special rules apply to:
Enter taxes paid or accrued during the tax year, but do not • Forgone interest on certain below-market-rate loans
include the following. (see section 7872).
• Federal income taxes. • Original issue discount (OID) on certain high yield
• Foreign or U.S. territory income taxes if a foreign tax discount obligations. See section 163(e)(5) to determine
credit is claimed. the amount of the deduction for OID that is deferred and
• Taxes not imposed on the cooperative. the amount that is disallowed on a high yield discount
• Taxes, including state or local sales taxes, that are paid obligation. The rules under section 163(e)(5) do not apply
or incurred in connection with an acquisition or disposition to certain high yield discount obligations issued after
of property (these taxes must be treated as part of the August 31, 2008, and before January 1, 2011. See section
cost of the acquired property, or in the case of a 163(e)(5)(F).
disposition, as a reduction in the amount realized on the • Interest allocable to unborrowed policy cash values of
disposition). life insurance, endowment, or annuity contracts issued
• Taxes assessed against local benefits that increase the after June 8, 1997. See section 264(f). Attach a statement
value of the property assessed (such as for paving, etc.). showing the computation of the deduction.
• Taxes deducted elsewhere on the return, such as those Limitation on deduction. Under section 163(j),
reflected in cost of goods sold. business interest expense is generally limited to the sum
of business interest income, 30% of the adjusted taxable
See section 164(d) for the rule on apportionment of income, and floor plan financing interest. The amount of
taxes on real property between the seller and purchaser. any business interest expense that is not allowed as a
Do not reduce the cooperative’s deduction for deduction for the tax year is carried forward to the
! social security and Medicare taxes by the following year. If section 163(j) applies, use Form 8990 to
CAUTION nonrefundable and refundable portions of any figure the amount of business interest expense the
FFCRA and ARP credits for qualified sick and family leave corporation can deduct for the current tax year and the
wages claimed on its employment tax returns. Instead, amount that can be carried forward to the next year. See
report this amount as income on line 9. the Instructions for Form 8990. Also, see Schedule K,
Question 17 and 18, later.
Line 16. Interest
Line 17. Charitable Contributions
Note. Do not offset interest income against interest Enter contributions or gifts actually paid within the tax year
expense. to or for the use of charitable and governmental
The cooperative must make an interest allocation if the organizations described in section 170(c) and any unused
proceeds of a loan were used for more than one purpose contributions carried over from prior years. Special rules
(for example, to purchase a portfolio investment and to and limits apply to contributions to organizations
acquire an interest in a passive activity). See Temporary conducting lobbying activities. See section 170(f)(9).
Regulations section 1.163-8T for the interest allocation
rules. Cooperatives reporting taxable income on the accrual
method can elect to treat as paid during the tax year any
Do not deduct the following interest. contributions paid by the due date for filing the

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cooperative’s return (not including extensions), if the date of the contribution, and the amount of the
contributions were authorized by the board of directors contribution.
during the tax year. Attach a declaration to the return
Contributions of $250 or more. A cooperative can
stating that the resolution authorizing the contributions
deduct a contribution of $250 or more only if it gets a
was adopted by the board of directors during the tax year.
written acknowledgment from the donee organization that
The declaration must include the date the resolution was
shows the amount of cash contributed, describes any
adopted.
property contributed (but not its value), and either gives a
Limitation on deduction. Generally, the total amount description and a good faith estimate of the value of any
claimed cannot be more than 10% of taxable income goods or services provided in return for the contribution or
(line 27) computed without regard to the following. states that no goods or services were provided in return
• Any deduction for contributions. for the contribution. The acknowledgment must be
• The special deductions on line 26b. obtained by the due date (including extensions) of the
• The limitation under section 249 on the deduction for cooperative's return, or, if earlier, the date the return is
bond premium. filed. Do not attach the acknowledgment to the tax return,
• Any net operating loss (NOL) carryback to the tax year but keep it with the cooperative's records.
under section 172.
Contributions of property other than cash. If a
• Any capital loss carryback to the tax year under section
cooperative contributes property other than cash and
1212(a)(1).
claims over a $500 deduction for the property, it must
• Any deduction for income attributable to domestic
attach a statement to the return describing the kind of
production activities of specified agricultural or
property contributed and the method used to determine its
horticultural cooperatives under section 199A(g).
fair market value (FMV). Complete and attach Form 8283,
Carryover. Charitable contributions over the 10% Noncash Charitable Contributions, for contributions of
limitation cannot be deducted for the tax year but can be property (other than money) if the total claimed deduction
carried over to the next 5 tax years. See the exception for all property contributed was more than $5,000. Special
below for farmers and ranchers and certain Native rules apply to the contribution of certain property. See the
Corporations. Instructions for Form 8283.
Special rules apply if the cooperative has an NOL Qualified conservation contributions. Special rules
carryover to the tax year. In figuring the charitable apply to qualified conservation contributions, including
contributions deduction for the current tax year, the 10% contributions of certain easements on buildings located in
limit is applied using the taxable income after taking into a registered historic district. See section 170(h) and Pub.
account any deduction for the NOL. 526, Charitable Contributions.
To figure the amount of any remaining NOL carryover to Other special rules. The cooperative must reduce its
later years, taxable income must be modified (see section deduction for contributions of certain capital gain property.
172(b)). To the extent that contributions are used to See sections 170(e)(1) and 170(e)(5).
reduce taxable income for this purpose and increase an For more information on charitable contributions,
NOL carryover, a contributions carryover is not allowed. including substantiation and recordkeeping requirements,
See section 170(d)(2)(B). see section 170 and the related regulations, and Pub. 526.
For special rules that apply to corporations, see Pub. 542.
Suspension of 10% limitation for farmers and ranch-
ers and certain Native Corporations. Certain Line 18. Depreciation
cooperatives can deduct contributions of qualified
Include on line 18 depreciation and the cost of certain
conservation property without regard to the general 10%
property that the cooperative elected to expense under
limit. This applies to:
section 179 from Form 4562. Include amounts not claimed
• A qualified farmer or rancher (as defined in section
on Form 1125-A or elsewhere on the return. See Form
170(b)(1)(E)(v)) that does not have publicly traded stock;
4562 and the Instructions for Form 4562.
and
• A Native Corporation (as defined in section 170(b)(2) Line 20. Pension, Profit-Sharing, etc., Plans
(C)(iii)) that contributes property which was land conveyed
under the Alaska Native Claims Settlement Act. Enter the deduction for contributions to qualified pension,
profit-sharing, or other funded deferred compensation
The total amount of the contribution claimed for the plans. Generally, employers who maintain such a plan
qualified conservation property cannot exceed 100% of must file one of the forms listed below unless exempt from
the excess of the cooperative's taxable income (as filing under regulations or other applicable guidance, even
computed above substituting “100%” for “10%”) over all if the plan is not a qualified plan under the Internal
other allowable charitable contributions. Any excess Revenue Code. The filing requirement applies even if the
qualified conservation contributions can be carried over to cooperative does not claim a deduction for the current tax
the next 15 years, subject to the 100% limitation. See year. There are penalties for failure to file these forms
section 170(b)(2)(B) and (C). timely and for overstating the pension plan deduction. See
Cash contributions. For contributions of cash, check, or sections 6652(e) and 6662(f). Also, see the instructions
other monetary gifts (regardless of the amount), the for the applicable form.
cooperative must maintain a bank record, or a receipt, Form 5500. Annual Return/Report of Employee Benefit
letter, or other written communication from the donee Plan.
organization indicating the name of the organization, the

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Form 5500-SF. Short Form Annual Return/Report of The deduction shall not exceed 50% of the Form W-2
Small Employee Benefit Plan. File this form instead of wages allocable to domestic production gross receipts
Form 5500, generally if there were under 100 participants (DPGR) of the specified cooperative for the tax year. See
at the beginning of the plan year. If you are a small plan Rev. Proc. 2021-11, 2021-6 I.R.B. 833, available at
(generally under 100 participants at the beginning of the IRS.gov/irb/2021-6_IRB#REV-PROC-2021-11.
plan year), you may be eligible to file the Form 5500-SF Reporting the deduction. Specified cooperatives may
instead of the Form 5500. For more information, see the use Form 8903, Domestic Production Activities
instructions to the Form 5500-SF. Instructions and more Deduction, to compute the section 199A(g) deduction.
information can be found at the Department of Labor Write “Specified Cooperative Section 199A(g) deduction”
website at www.EFAST.dol.gov. across the top of Form 8903. Form 8903 must be attached
to the cooperative's return. See the Instructions for Form
Note. Form 5500 and Form 5500-SF must be filed 8903. Alternatively, specified cooperatives may create and
electronically under the computerized ERISA Filing attach a schedule similar to Form 8903 to compute the
Acceptance System (EFAST2). For more information, see section 199A(g) deduction.
the EFAST2 website at www.EFAST.dol.gov.
Form 5500-EZ. Annual Return of A One-Participant Line 23. Other Deductions
(Owners/Partners and Their Spouses) Retirement Plan or Attach a statement, listing by type and amount, all
A Foreign Plan. File this form for a plan that only covers allowable deductions that are not deductible elsewhere on
the owner (or the owner and spouse) or a foreign plan that Form 1120-C. Enter the total on line 23.
is required to file an annual return and does not file the
Examples of other deductions include the following.
annual return electronically on Form 5500-SF. See the
Instructions for Form 5500-EZ. • Amortization. See Form 4562, Part VI.
• Any energy efficient commercial buildings deduction for
Line 21. Employee Benefit Programs property placed in service during the tax year. Complete
and attach Form 7205.
Enter contributions to employee benefit programs not
• Certain business start-up and organizational costs
claimed elsewhere on the return (for example, insurance
(discussed earlier under Election to deduct business
or health and welfare programs) that are not an incidental
start-up and organizational costs).
part of a pension, profit-sharing, etc., plan included on
• Reforestation costs. The cooperative can elect to
line 20.
deduct up to $10,000 of qualifying reforestation expenses
Line 22. Section 199A(g) Deduction for each qualified timber property. The cooperative can
elect to amortize over 84 months any amount not
This deduction applies only to specified deducted. See the Instructions for Form T (Timber).
! agricultural and horticultural cooperatives • Depletion. See sections 613 and 613A for percentage
CAUTION (specified cooperatives). depletion rates applicable to natural deposits. Also, see
Specified agricultural or horticultural cooperatives section 291 for the limitation on the depletion deduction
(specified cooperatives) to which Part I of subchapter T for iron ore and coal (including lignite). Attach Form T
applies may qualify for a deduction under section 199A(g). (Timber), Forest Activities Schedule, if a deduction for
A specified cooperative is a cooperative that markets or is depletion of timber is taken.
engaged in the manufacturing, production, growth or • Insurance premiums.
extraction of agricultural or horticultural products. • Legal and professional fees.
Specified cooperatives that qualify under section 521 are • Repairs and maintenance (discussed later).
considered “exempt” cooperatives. All other specified • Supplies used and consumed in the business.
cooperatives are considered “nonexempt.” Special rules • Travel, meals, and entertainment expenses. Special
apply to specified cooperatives with both patronage and rules apply (discussed later).
nonpatronage income and losses. • Utilities.
• Ordinary losses from trade or business activities of a
A specified cooperative's section 199A(g) deduction partnership (from Schedule K-1 (Form 1065)). Do not
generally equals 9% of the lesser of: offset ordinary income against ordinary losses. Instead,
1. Qualified production activity income (QPAI), or include the income on line 9. Show the partnership's
2. Taxable income. name, address, and EIN on a separate statement
attached to this return. If the amount entered is from more
Note. QPAI and taxable income are computed without than one partnership, identify the amount from each
regard to any deductions for patronage dividends, per-unit partnership.
retain allocations, or nonpatronage distributions under • Any extraterritorial income exclusion (from Form 8873).
section 1382(b) or (c). • Any net negative section 481(a) adjustment. See the
instructions for line 9.
A specified cooperative with oil-related QPAI must also • Dividends paid in cash on stock held by an employee
reduce the deduction by 3% of the least of the following stock ownership plan.
amounts.
However, a deduction can only be taken for the
• Oil-related QPAI.
dividends above if, according to the plan, the dividends
• QPAI.
are:
• Taxable income figured without the deduction.

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1. Paid in cash directly to the plan participants or • That individual is an employee of the cooperative, and
beneficiaries; • That individual’s travel is for a bona fide business
2. Paid to the plan, which distributes them in cash to purpose and would otherwise be deductible by that
the plan participants or their beneficiaries no later than 90 individual.
days after the end of the plan year in which the dividends Meals. Generally, the cooperative can deduct only 50%
are paid; of the amount otherwise allowable for nonentertainment
related meal expenses paid or incurred in its trade or
3. At the election of such participants or their
business. Meals not separately stated from entertainment
beneficiaries (a) payable as provided under (1) or (2)
are generally not deductible.
above, or (b) paid to the plan and reinvested in qualifying
employer securities; or In addition (subject to exceptions under section 274(k)
(2)):
4. Used to make payments on a loan described in
section 404(a)(9). • Meals must not be lavish or extravagant, and
• An employee of the cooperative must be present at the
See section 404(k) for more details and the limitation meal.
on certain dividends. See section 274(n)(3) for a special rule that applies to
Do not deduct the following. expenses for meals consumed by individuals subject to
• Amounts paid or incurred to, or at the direction of, a the hours of service limits of the Department of
government or governmental entity for the violation, or Transportation.
investigation or inquiry into the potential violation, of a law. Qualified transportation fringes (QTFs). Generally,
See section 162(f) for more information and exceptions. no deduction is allowed for QTFs provided by employers
• Any amount that is allocable to a class of exempt to their employees. QTFs are defined in section 132(f)(1)
income. See section 265(b) for exceptions. and include:
• Lobbying expenses. However, see exceptions • Transportation in a commuter highway vehicle between
(discussed later). the employee's residence and place of employment,
• Amounts paid or incurred for any settlement, payout, or • Any transit pass, and
attorney fees related to sexual harassment or sexual • Qualified parking.
abuse, if such payments are subject to a nondisclosure See section 274 and Pub. 15-B for more information.
agreement. See section 162(q). Membership dues. The cooperative can deduct
amounts paid or incurred for membership dues in civic or
Repairs and maintenance. Enter the cost of repairs and
public service organizations, professional organizations
maintenance not claimed elsewhere on the return, such
(such as bar and medical associations), business
as labor and supplies, that are not payments to produce or
leagues, trade associations, chambers of commerce,
improve tangible or real property. See Regulations section
boards of trade, and real estate boards. However, no
1.263(a)-1. For example, amounts are paid for
deduction is allowed if a principal purpose of the
improvements if they are for betterments to the property,
organization is to entertain, or provide entertainment
restorations of the property (such as the replacements of
facilities for members or their guests. In addition,
major components or substantial structural parts), or if
cooperatives cannot deduct membership dues in any club
they adapt the property to a new or different use. Amounts
organized for business, pleasure, recreation, or other
paid to produce or improve property must be capitalized.
social purpose. This includes country clubs, golf and
See Regulations sections 1.263(a)-2 and (a)-3.
athletic clubs, airline and hotel clubs, and clubs operated
The cooperative can deduct repair and maintenance to provide meals under conditions favorable to business
expenses only to the extent they relate to a trade or discussion.
business activity. See Regulations section 1.162-4. The Entertainment facilities. The cooperative cannot
cooperative may elect to capitalize certain repair and deduct an expense paid or incurred for a facility (such as a
maintenance costs consistent with its books and records. yacht or hunting lodge) used for an activity usually
See Regulations section 1.263(a)-3(n) for information on considered entertainment, amusement, or recreation.
how to make the election. Amounts treated as compensation. Generally, the
Travel, meals, and entertainment. Subject to limitations cooperative may be able to deduct otherwise
and restrictions discussed below, a cooperative can nondeductible entertainment, amusement, or recreation
deduct ordinary and necessary travel, meals, and expenses if the amounts are treated as compensation to
nonentertainment expenses paid or incurred in its trade or the recipient and reported on Form W-2, Wage and Tax
business. Generally, entertainment expenses, Statement, for an employee or on Form 1099-NEC,
membership dues, and facilities used in connection with Nonemployee Compensation, for an independent
these activities cannot be deducted. Generally, no contractor.
deduction is allowed for qualified transportation fringe However, if the recipient is an officer, director, beneficial
benefits. Also, special rules apply to deductions for gifts owner (directly or indirectly), or other “specified individual”
and convention expenses. See section 274 and Pub. 463 (as defined in section 274(e)(2)(B) and Regulations
for details. section 1.274-9(b)), special rules apply.
Travel. The cooperative cannot deduct travel expenses
of any individual accompanying a cooperative officer or Lobbying expenses. Generally, lobbying expenses are
employee, including a spouse or dependent of the officer not deductible. These expenses include amounts paid or
or employee, unless: incurred in connection with:
• Influencing legislation, or

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• Any communication with certain federal executive Schedule H.
branch officials in an attempt to influence the official
actions or positions of the officials. See Regulations Line 25c. Taxable Income Before Net Operating
section 1.162-29 for the definition of “influencing Loss and Special Deductions
legislation.” Subtract line 25b from line 25a and enter the result on
Dues and other similar amounts paid to certain line 25c.
tax-exempt organizations may not be deductible. If certain
in-house expenditures do not exceed $2,000, they are Line 26a. Net Operating Loss Deduction
deductible. See section 162(e)(4)(B). A cooperative can use the NOL incurred in 1 tax year to
reduce its taxable income in another tax year. Enter on
Line 25a. Taxable Income Before Adjustments line 26a the total NOL carryovers from other tax years, but
and Special Deductions do not enter more than the cooperative's taxable income
(after special deductions). Attach a statement showing the
At-risk rules. Generally, special at-risk rules under
computation of the NOL deduction. Also, complete
section 465 apply to closely held cooperatives (see
Schedule K, Item 12, if applicable.
Passive activity limitations, earlier) engaged in any activity
as a trade or business or for the production of income. The cooperative must attach a statement separately
These cooperatives may have to adjust the amount on accounting for patronage and nonpatronage-sourced
line 25a. (See below.) NOLs.
A taxpayer is generally considered “at-risk” for an
amount equal to the taxpayer’s investment in the entity. Note. Patronage-sourced NOLs cannot be used to
That investment consists of money and other property reduce nonpatronage-sourced taxable income.
contributed to the entity and amounts borrowed on behalf
of the entity. The following special rules apply.
• If an ownership change (described in section 382(g))
The at-risk rules do not apply to: occurs, the amount of the taxable income of a loss
• Holding real property placed in service by the cooperative that may be offset by the pre-change NOL
cooperative before 1987; carryovers may be limited. See section 382 and the
• Equipment leasing under sections 465(c)(4), (5), and related regulations. A loss cooperative must include the
(6); or information statement as provided in Regulations section
• Any qualifying business of a qualified cooperative under 1.382-11(a) with its income tax return for each tax year
section 465(c)(7). that it is a loss cooperative in which an ownership shift,
However, the at-risk rules do apply to the holding of equity structure shift, or other transaction described in
mineral property. Temporary Regulations section 1.382-2T(a)(2)(i) occurs. If
If the at-risk rules apply, adjust the amount on this line the cooperative makes the closing-of-the-books election,
for any section 465(d) losses. These losses are limited to see Regulations section 1.382-6(b).
the amount for which the cooperative is at risk for each The limitations under section 382 do not apply to
separate activity at the close of the tax year. If the certain ownership changes after February 17, 2009, made
cooperative is involved in one or more activities, any of according to a restructuring plan under the Emergency
which incurs a loss for the year, report the losses for each Economic Stabilization Act of 2008. See section 382(n).
activity separately. Attach Form 6198, At-Risk Limitations, For guidance in applying section 382 to loss
showing the amount at risk and gross income and cooperatives whose instruments were acquired by
deductions for the activities with the losses. Treasury under certain programs under the Emergency
If the cooperative sells or otherwise disposes of an Economic Stabilization Act of 2008, see Notice 2010-2,
asset or its interest (either total or partial) in an activity to 2010-2 I.R.B. 251.
which the at-risk rules apply, determine the net profit or • If a cooperative acquires control of another cooperative
loss from the activity by combining the gain or loss on the (or acquires its assets in a reorganization), the amount of
sale or disposition with the profit or loss from the activity. If pre-acquisition losses that may offset recognized built-in
the cooperative has a net loss, the loss may be limited gain may be limited (see section 384).
because of the at-risk rules. • If a cooperative elects the alternative tax on qualifying
Treat any loss from an activity not allowed for the shipping activities under section 1354, no deduction is
current tax year as a deduction allocable to the activity in allowed for an NOL attributable to the qualifying shipping
the next tax year. activities to the extent that the loss is carried forward from
Cooperatives are required to allocate income and a tax year preceding the first tax year for which the
deductions between patronage and nonpatronage-related alternative tax election was made. See section 1358(b)(2).

business. Cooperatives with gross receipts and assets of For more details on the NOL deduction, see section
$250,000 or more must complete Schedule G. See the 172 and the Instructions for Form 1139.
instructions for Schedule G.
Line 26b. Special Deductions
Line 25b. Deductions and Adjustments From
See the instructions for Schedule C. Then, complete
Schedule H
Schedule C and enter on line 26b the amount from
Complete Schedule H. Enter on line 25b the amount from Schedule C, line 24.
Schedule H, line 5. See the instructions for

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Line 26c. Total NOL and Special Deductions enter “CCF” and the amount of the deduction. For more
Combine lines 26a and 26b and enter the result on information, see section 7518.
line 26c.
Line 29
Tax, Refundable Credits, and Reserved for future use.

Payments Line 30b. Estimated Tax Payments
Enter any estimated tax payments the cooperative made
Line 27. Taxable Income
for the tax year.
See Schedule K, Question 14, to determine if the
cooperative needs to complete Schedule G. Taxable Beneficiaries of trusts. If the cooperative is the
income reported on line 27 cannot be less than the beneficiary of a trust, and the trust makes a section 643(g)
nonpatronage taxable income shown on Schedule G, election to credit its estimated tax payments to its
line 10, column b. beneficiaries, include the cooperative's share of the
payment in the total for line 30b. Enter “T” and the amount
Patronage source losses cannot be used to offset of the payment in the shaded space beside line 30b.
! nonpatronage income. See the instructions for
CAUTION Schedule G. Line 30c. Overpaid Estimated Tax
If the cooperative overpaid estimated tax, it may be able to
Minimum taxable income. The cooperative's taxable
get a quick refund by filing Form 4466. The overpayment
income cannot be less than the inversion gain of the
must be at least 10% of the cooperative's expected
cooperative for the tax year, if the cooperative is an
income tax liability and at least $500. File Form 4466 after
expatriated entity or a partner in an expatriated entity. See
the end of the cooperative's tax year, and no later than the
section 7874(a).
due date for filing the cooperative’s tax return. Form 4466
Net operating loss (NOL). If line 27 (figured without must be filed before the cooperative files its tax return.
regard to the minimum taxable income rule stated above) See the instructions for Form 4466.
is zero or less, the cooperative may have an NOL that can
be carried back or forward as a deduction to other tax Line 30d. Net Tax Payments
years. Combine lines 30a through 30c and enter the result on
Only farming losses and losses of an insurance line 30d.
company (other than a life insurance company) can be
carried back. The carryback period for these losses is 2 Line 30f. Credit for Tax Paid on Undistributed
years. For NOLs that can be carried back, the cooperative Capital Gains
can elect to waive the carryback period and instead carry Enter any credit from Form 2439, Notice to Shareholder of
the NOL forward to future tax years. Undistributed Long-Term Capital Gains, for the
See the instructions for Schedule K, Item 12 for cooperative's share of the tax paid by a regulated
information on making the election to waive the carryback investment company (RIC) or a real estate investment
period. See the Instructions for Form 1139 for other trust (REIT) on undistributed long-term capital gains
special rules and elections. included in the cooperative's income. Attach Form 2439.

The NOL deduction for tax year 2023 cannot exceed Line 30g. Credit For Federal Tax Paid on Fuels
the aggregate amount of NOLs arising in tax years
Enter the total income tax credit claimed on Form 4136,
beginning before January 1, 2018, carried to such year
Credit for Federal Tax Paid on Fuels. Attach Form 4136.
plus the lesser of:
1. The aggregate amount of NOLs arising in tax years Line 30h. Section 1383 Adjustment
beginning after December 31, 2017, carried to such tax If the cooperative would pay less total tax by claiming the
year; or deduction for the redemption of nonqualified written
2. 80% of the excess, if any, of taxable income notices of allocation or nonqualified per-unit retain
determined without any NOL deduction, section 199A certificates in the issue year versus the current tax year,
deduction, or section 250 deduction, over any NOL refigure the tax for the years the nonqualified written
carryover to the tax year from tax years beginning before notices or certificates were originally issued (deducting
January 1, 2018. them in the issue year), then enter the amount of the
reduction in the issue years' taxes on this line. Attach a
An exception applies for NOLs of insurance companies
statement showing how the adjustment was figured. This
other than life insurance companies. The 80% taxable
adjustment is treated as a payment, and any amount that
income limit does not apply to these entities. See sections
is more than the tax on line 28 will be refunded.
172(b) and (f).
Merchant Marine capital construction fund. To take a Line 30i. Elective Payment Election Amount
deduction for amounts contributed to a capital from Form 3800
construction fund (CCF), reduce the amount that would Enter on line 30i the total net elective payment election
otherwise be entered on line 27 by the amount of the amount from Form 3800, Part III, line 6, column (i). See
deduction. On the dotted line next to the entry space, the Instructions for Form 3800.

Instructions for Form 1120-C 17

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Line 30j. Total Payments, Refundable Credits, Note. This election to apply some or all of the
and Adjustments overpayment amount to the cooperative's 2024 estimated
tax cannot be changed at a later date.
Add the amounts on lines 30d through 30i. Enter the total
on line 30j. Include on line 30j any other refundable credit Direct deposit of refund. If the cooperative has a refund
the cooperative is claiming. Attach a statement listing the of $1 million or more and wants it directly deposited into its
type of credit and the amount of the credit. checking or savings account at any U.S. bank or other
financial institution instead of having a check sent to the
Backup withholding. If the cooperative had federal
cooperative, complete Form 8302 and attach it to the
income tax withheld from any payments it received
cooperative's tax return.
because, for example, it failed to give the payer its correct
EIN, include the amount withheld in the total for line 30j.
Enter the amount withheld and the words “Backup Schedule C.
withholding” in the blank space above line 30j. Dividends, Inclusions, and Special
Line 31. Estimated Tax Penalty Deductions
Generally, the cooperative does not have to file Form 2220
because the IRS can figure the penalty amount, if any, and Note. Do not report income from patronage dividends on
bill the cooperative. However, even if the cooperative does Schedule C. Report income from patronage dividends and
not owe the penalty, it must complete and attach Form per-unit retain allocations on page 1, line 9.
2220 if: For purposes of the 20% ownership test on lines 1
• The annualized income or adjusted seasonal through 7, the percentage of stock owned by the
installment method is used, or cooperative is based on voting power and value of the
• The cooperative is a large corporation (as defined in the stock. Preferred stock described in section 1504(a)(4) is
Instructions for Form 2220) computing its first required not taken into account.
installment based on the prior year's tax. See the Consolidated returns. Cooperatives filing a
Instructions for Form 2220. consolidated return should see Regulations sections
1.1502-13, 1.1502-26, and 1.1502-27 before completing
If Form 2220 is attached, check the box on line 31, and
Schedule C.
enter any penalty on this line.
Cooperatives filing a consolidated return must not
If the cooperative's tax liability includes a CAMT report as dividends on Schedule C any amounts received
! liability, the cooperative must complete and attach from corporations within the consolidated group. Such
CAUTION Form 2220. The affected cooperative must also
dividends are eliminated in consolidation rather than offset
include an amount of estimated tax penalty on Form by the dividends-received deduction.
1120-C, line 31, even if that amount is zero. Failure to
follow these instructions could result in the cooperative Line 1, Column (a)
receiving a penalty notice that will require an abatement Enter dividends (except those received on certain
request to apply any penalty relief. See Notice 2023-42. debt-financed stock acquired after July 18, 1984— see
section 246A) that are:
Line 32. Amount Owed • Received from less-than-20%-owned domestic
If the cooperative cannot pay the full amount of tax owed, corporations subject to income tax, and
it can apply for an installment agreement online. The • Qualified for the 50% deduction under section 243(a)
cooperative can apply for an installment agreement online (1).
if:
Also, include on line 1 the following.
• It cannot pay the full amount shown on line 32,
• Taxable distributions from an interest charge domestic
• The total amount owed is $25,000 or less, and
international sales corporation (IC-DISC) or former
• The cooperative can pay the liability in full in 24 months.
domestic international sales corporation (former DISC)
To apply using the Online Payment Agreement that are designated as eligible for the 50% deduction and
Application, go to IRS.gov/OPA. Under an installment certain dividends of Federal Home Loan Banks. See
agreement, the cooperative can pay what it owes in section 246(a)(2).
monthly installments. There are certain conditions that • Dividends (except those received on debt-financed
must be met to enter into and maintain an installment stock acquired after July 18, 1984) from a RIC. The
agreement, such as paying the liability within 24 months amount of dividends eligible for the dividends-received
and making all required deposits and timely filing tax deduction under section 243 is limited by section 854(b).
returns during the length of the agreement. If the The cooperative should receive a notice from the RIC
installment agreement is accepted, the cooperative will be specifying the amount of dividends that qualify for the
charged a fee and it will be subject to penalties and deduction.
interest on the amount of tax not paid by the due date of Report so-called dividends or earnings received from
the return. mutual savings banks, etc., as interest. Do not treat them
as dividends.
Line 34. Refund
Enter the amount of any overpayment that should be Line 2, Column (a)
refunded or applied to next year's estimated tax. Enter on line 2:

18 Instructions for Form 1120-C

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• Dividends (except those received on certain                  Also, include dividends received from a 
debt-financed stock acquired after July 18, 1984) that are   less-than-20%-owned foreign sales corporation (FSC) 
received from 20%-or-more-owned domestic corporations        that:
subject to income tax and that are subject to the 65%        • Are attributable to income treated as effectively 
deduction under section 243(c), and                          connected with the conduct of a trade or business within 
• Taxable distributions from an IC-DISC or former DISC       the United States (excluding foreign trade income), and
that are considered eligible for the 65% deduction.          • Qualify for the 50% deduction under section 245(c)(1)
                                                             (B).
Line 3, Column (a)
Enter the following.                                         Line 7, Column (a)
• Dividends received on certain debt-financed stock          Enter the U.S.-source portion of dividends that:
acquired after July 18, 1984, from domestic and foreign      • Are received from 20%-or-more-owned foreign 
corporations subject to income tax that would otherwise      corporations, and
be subject to the dividends-received deduction under         • Qualify for the 65% deduction under sections 245(a) 
section 243(a)(1), 243(c), or 245(a). Generally,             and 243.
debt-financed stock is stock that the cooperative acquired 
                                                               Also, include dividends received from a 
by incurring a debt (for example, it borrowed money to buy 
                                                             20%-or-more-owned FSC that:
the stock).
• Dividends received from a RIC on debt-financed stock.      • Are attributable to income treated as effectively 
                                                             connected with the conduct of a trade or business within 
The amount of dividends eligible for the 
                                                             the United States (excluding foreign trade income), and
dividends-received deduction is limited by section 854(b). 
The cooperative should receive a notice from the RIC         • Qualify for the 65% deduction under section 245(c)(1)
                                                             (B).
specifying the amount of dividends that qualify for the 
deduction.                                                   Line 8, Column (a)
Line 3, Columns (b) and (c)                                  Enter dividends received from wholly owned foreign 
                                                             subsidiaries that are eligible for the 100% deduction under 
Dividends received on certain debt-financed stock 
                                                             section 245(b).
acquired after July 18, 1984, are not entitled to the full 
50% or 65% dividends-received deduction under section          In general, the deduction under section 245(b) applies 
243 or 245(a). The 50% or 65% deduction is reduced by a      to dividends paid out of the earnings and profits of a 
percentage that is related to the amount of debt incurred    foreign corporation for a tax year during which:
to acquire the stock. See section 246A. Also, see section    • All of its outstanding stock is directly or indirectly owned 
245(a) before making this computation for an additional      by the domestic cooperative receiving the dividends, and
limitation that applies to certain dividends received from   • All of its gross income from all sources is effectively 
foreign corporations. Attach a statement to Form 1120-C      connected with the conduct of a trade or business within 
showing how the amount on line 3, column (c), was            the United States.
figured.
                                                             Line 9, Column (c)
Line 4, Column (a)                                           Generally, line 9, column (c), cannot exceed the amount 
Enter dividends received on preferred stock of a             from the worksheet below. However, in a year in which an 
less-than-20%-owned public utility that is subject to        NOL occurs, this limitation does not apply even if the loss 
income tax and is allowed the 23.3% deduction provided       is created by the dividends-received deduction. See 
in sections 244 and 247 (as affected by P.L. 113-295, Div.   sections 172(d) and 246(b).
A, section 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043) 
for dividends paid.

Line 5, Column (a)
Enter dividends received on preferred stock of a 
20%-or-more-owned public utility that is subject to income 
tax 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)(A), Dec. 19, 2014, 128 Stat. 4043) for 
dividends paid.

Line 6, Column (a)
Enter the U.S.-source portion of dividends that:
• Are received from less-than-20%-owned foreign 
corporations, and
• Qualify for the 50% deduction under section 245(a). To 
qualify for the 50% deduction, the cooperative must own 
at least 10% of the stock of the foreign corporation by vote 
and value.

Instructions for Form 1120-C                                                                                             19

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                                                                to foreign trade income, and enter the amount in column 
          Worksheet for Schedule C, line 9                      (c). See sections 245(c)(2) and 923(a)(4)(repealed by P. 
                  (keep for your records)                       L. 106-519, section 2, Nov. 15, 2000) for additional 
   1. Refigure Form 1120-C, page 1, line 25a, without           information.
    any deduction under section 199A, any 
    adjustment under section 1059, and without any              Line 13, Column (a)
    capital loss carryback to the tax year under                Enter the foreign-source portion of dividends that:
    section 1212(a)(1) . . . . . . . . . . . . . . . . .        • Are received from a specified 10%-owned foreign 
   2. Complete lines 10, 11, 12, and 13, column (c)             corporation (as defined in section 245A(b)), including, for 
    and enter the total   . . . . . . . . . . . . . . . . .    
                                                                example, gain from the sale of stock of a foreign 
   3. Subtract line 2 from line 1 . . . . . . . . . . . . .     corporation that is treated as a dividend under section 
   4. Multiply line 3 by 65% (0.65) . . . . . . . . . . .       1248(a) and (j); and
   5. Add lines 2, 5, 7, and 8, column (c) and the part         • Qualify for the section 245A deduction.
    of the deduction on line 3, column (c), that is 
    attributable to dividends received from                     Line 14, Column (a)
    20%-or-more-owned corporations            . . . . . . .    
   6. Enter the smaller of line 4 or line 5. If line 5 is       Enter foreign dividends not reportable on lines 3, 6, 7, 8, 
    greater than line 4, stop here; enter the amount            11, 12, or 13 of column (a).
    from line 6 on line 9, column (c). Do not 
    complete the rest of this worksheet       . . . . . . .       Include on line 14 the foreign-source portion of any 
   7. Enter the total amount of dividends received              dividend that does not qualify for the section 245A 
    from 20%-or-more-owned corporations that are                deduction (for example, hybrid dividends within the 
    included on lines 2, 3, 5, 7, and 8, column                 meaning of section 245A(e), ineligible amounts of 
    (a) . . . . . . . . . . . . . . . . . . . . . . . . . . .   dividends within the meaning of Regulations section 
   8. Subtract line 7 from line 3 . . . . . . . . . . . . .     1.245A-5(b), dividends that fail to meet the holding period 
   9. Multiply line 8 by 50% (0.50) . . . . . . . . . . .       requirement under section 246(c)(5), etc.).
10. Subtract line 5 from line 9, column (c) . . . . .          
                                                                  Also, include on line 14 the cooperative's share of 
11. Enter the smaller of line 9 or
    line 10. . . . . . . . . . . . . . . . . . . . . . . . .    distributions from a section 1291 fund from Form 8621, to 
12. Dividends-received deduction after                          the extent that the amounts are taxed as dividends under 
    limitation (section 246(b)). Add lines 6 and 11.            section 301. See Form 8621 and the Instructions for Form 
    Enter the result here and on line 9, column                 8621.
    (c) . . . . . . . . . . . . . . . . . . . . . . . . . . .  
                                                                  Attach a statement identifying the amount of each 
                                                                dividend reported on line 14 and the provision pursuant to 
Line 10, Columns (a) and (c)                                    which a deduction is not allowed with respect to such 
                                                                dividend.
Small business investment companies operating under 
the Small Business Investment Act of 1958 must enter            Line 15
dividends that are received from domestic corporations 
subject to income tax even though a deduction is allowed        Reserved for future use.

for the entire amount of those dividends. To claim the          Line 16a, Column (a)
100% deduction on line 10, column (c), the cooperative 
must file with its return a statement that it was a federal     Enter the foreign-source portion of any subpart F 
licensee under the Small Business Investment Act of 1958        inclusions attributable to the sale or exchange by a CFC of 
at the time it received the dividends.                          stock in another foreign corporation described in section 
                                                                964(e)(4). This should equal the sum of the amounts 
Line 11, Columns (a) and (c)                                    reported by the U.S. shareholder on Form(s) 5471, 
Enter only dividends that qualify under section 243(b) for      Schedule I, line 1a. (Do not include on line 16a any portion 
the 100% dividends-received deduction described in              of such subpart F inclusion that is not eligible for the 
section 243(a)(3). Cooperatives taking this deduction are       section 245A deduction pursuant to Regulations section 
subject to the provisions of section 1561.                      1.245A-5(g)(2). Include such amounts on line 16c.)

The 100% deduction does not apply to affiliated group           Line 16b, Column (a)
members that are joining in the filing of a consolidated        Enter the total subpart F inclusions attributable to tiered 
return.                                                         hybrid dividends. This should equal the sum of the 
                                                                amounts reported by the U.S. shareholder on Form(s) 
Line 12, Columns (a) and (c)                                    5471, Schedule I, line 1b.
Enter in column (a) dividends from FSCs that are 
attributable to foreign trade income and that are eligible for  Line 16c, Column (a)
the 100% deduction provided in section 245(c)(1)(A).            Enter all other amounts included in income under section 
                                                                951. This should equal the sum of the amounts reported 
For cooperatives described in section 1381 that are             by the U.S. shareholder on Form(s) 5471, Schedule I, 
engaged in the marketing of agricultural or horticultural       lines 1(c) through 1(h), 2, and 4.
products and are shareholders in an FSC, multiply the 
total dividends reported in column (a) by  /  (or, 0.6957) 16 23
for the exempt portion of the dividends that are attributable 

20                                                                                          Instructions for Form 1120-C

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Line 17, Column (a) Line 21, Column (c)
Enter amounts included in income under section 951A. Section 247 (as affected by P.L. 113-295, Div. A, section
See Form 8992, Part II, line 5, and the Instructions for 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043) allows
Form 8992. Also, if applicable, attach Form(s) 5471. public utilities a deduction of 40% of the smaller of (a)
dividends paid on their preferred stock during the tax year,
Note. Consider the applicability of section 951A with or (b) taxable income computed without regard to this
respect to CFCs owned by domestic partnerships in which deduction. In a year in which an NOL occurs, compute the
the cooperative has an interest. deduction without regard to section 247(a)(1)(B).

Line 18, Column (a) Line 22, Column (c)
Include gross-up for taxes deemed paid under section Enter the section 250 deduction claimed for
960. foreign-derived intangible income (FDII) and global
intangible low-taxed income (GILTI). This should equal the
Line 19, Column (a) sum of Form 8993, Part III, lines 28 and 29.
Enter taxable distributions from an IC-DISC or former
DISC that are designated as not eligible for a
dividends-received deduction. Schedule G.
No deduction is allowed under section 243 for a Allocation of Patronage and
dividend from an IC-DISC or former DISC (as defined in Nonpatronage Income and
section 992(a)) to the extent the dividend:
• Is paid out of the cooperative's accumulated IC-DISC Deductions
income or previously taxed income, or If the cooperative's total receipts (page 1, line 1a plus lines
• Is a deemed distribution under section 995(b)(1). 4 through 9) for the tax year and its total assets at the end
of the tax year are less than $250,000, the cooperative is
Line 20, Column (a) not required to complete Schedule G. See Schedule K,
Include the following. Question 14.
1. Dividends (other than capital gain distributions Cooperatives are required to allocate income and
reported on Schedule D (Form 1120) and exempt-interest deductions between patronage and nonpatronage
dividends) that are received from RICs and that are not business. If the transaction producing the income merely
subject to the 50% deduction. enhances the overall profitability of the cooperative, being
2. Dividends from tax-exempt organizations. merely incidental to the cooperative's operation, the
3. Dividends (other than capital gain distributions) income is from a nonpatronage source. But if the source
received from a REIT that, for the tax year of the trust in of income or loss is from an activity that is an integral part
which the dividends are paid, qualifies under sections 856 of the cooperative's business (such as inventory), then the
through 860. source may be patronage.
4. Dividends not eligible for a dividends-received Special rules also apply if a cooperative has acquired
deduction, which include the following. the assets of another cooperative under a section 381(a)
a. Dividends received on any share of stock held for transaction. Cooperatives may elect to net earnings
less than 46 days during the 91-day period beginning 45 against losses under section 1388(j) and still be eligible
days before the ex-dividend date. When counting the for tax-exempt treatment.
number of days the cooperative held the stock, you cannot
Line 6a
count certain days during which the cooperative's risk of
loss was diminished. See section 246(c)(4) and For agricultural and horticultural cooperatives only, special
Regulations section 1.246-5 for more details. rules apply in determining and reporting the section
199A(g) deduction. See the instructions for page 1,
b. Dividends received on any share of preferred stock, line 22. Also, see the Instructions for Form 8903.
which are attributable to periods totaling more than 366
days, if such stock was held for less than 91 days during Line 8, Columns (a) and (b)
the 181-day period that began 90 days before the
Complete Schedule H before entering an amount on this
ex-dividend date. When counting the number of days the
line. Allocate the amount on Schedule H, line 5, between
cooperative held the stock, you cannot count certain days
patronage and nonpatronage. Only farmers' cooperatives
during which the cooperative's risk of loss was diminished.
exempt under section 521 are allowed to take a deduction
See section 246(c)(4) and Regulations section 1.246-5 for
in column (b) for nonpatronage distributions under section
more details. Preferred dividends attributable to periods
1382(c).
totaling less than 367 days are subject to the 46-day
holding period rule above. Line 9a, Columns (a) and (b)
c. Dividends on any share of stock to the extent the Compute and carry back or carry over patronage and
cooperative is under an obligation (including a short sale) nonpatronage NOLs separately. Under section 1388(j)(1),
to make related payments with respect to positions in cooperatives can use losses from one or more allocation
substantially similar or related property. units to offset earnings of one or more other allocation
5. Any other taxable dividend income not properly units, as permitted by their bylaws, but only to the extent
reported elsewhere on Schedule C. that the earnings and losses are from business done with

Instructions for Form 1120-C 21

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or for patrons. If a cooperative exercises this option, it • Marketing, purchasing, or service activities of the
must provide the information specified in section 1388(j) cooperative; or
(3) in a written notice to its patrons. • Income from business done with or for the U.S.
Government, or any of its agencies.
Line 9b, Columns (a) and (b) See the instructions for line 3b for a definition of
Allocate the amount of total special deductions reported “qualified written notice of allocation.” See section 1382(c)
on Schedule C, line 24, between patronage and (2)(B) for deductibility of amounts paid in redemption of
nonpatronage business. nonqualified written notices of allocation. See section
1388(d) for a definition of a nonqualified written notice of
Line 10, Columns (a) and (b) allocation.
The taxable income reported on page 2, line 27, may not
be less than the nonpatronage taxable income shown on Line 3. Patronage Dividends
Schedule G, line 10 (column b). To be deductible, patronage dividends must be paid
during the payment period that begins on the 1st day of
Line 11, Column (a) the tax year in which the patronage occurs and ends on
Combine lines 10(a) and 10(b). the 15th day of the 9th month after the end of that tax year.
Note. Any patronage source losses (line 10, column (a)) See sections 1382(e) and (f) for special rules for the
cannot be used to offset nonpatronage income (line 10, time when patronage occurs if products are marketed
column (b)). under a pooling arrangement, or if earnings are includible
in the gross income of the cooperative for a tax year after
Line 12, Column (a) the year in which the patronage occurred.
Enter any unused patronage loss from line 10, column (a). Patronage dividends include any amount paid to a
patron by a cooperative based on the quantity or value of
Line 13, Column (b) business done with or for that patron under a pre-existing
Enter any unused nonpatronage loss from line 10, column obligation to pay that amount. The amount is determined
(b). by reference to the net earnings of the organization from
business done with or for its patrons.
Schedule H.
Note. Net earnings are not reduced by dividends paid on
Deductions and Adjustments Under capital stock of the organization if there is a legally
Section 1382 enforceable agreement that such dividends are in addition
to amounts otherwise payable to patrons derived from
Line 1. Dividends Paid on Capital Stock (Section business done with or for patrons.
521 Cooperatives Only) Patronage dividends may be paid in:
Enter the amount actually or constructively paid as • Money,
dividends during the tax year on: • Qualified written notices of allocation, or
• Common stock (whether voting or nonvoting), • Other property (except nonqualified written notices of
• Preferred stock, allocation).
• Capital retain certificates, Line 3b. Qualified written notices of allocation. A
• Revolving fund certificates, written notice of allocation means:
• Letters of advice, or • Any capital stock,
• Other documentary evidence of a proprietary interest in • Revolving fund certificate,
the cooperative association. • Retain certificate,
See Regulations section 1.1382-3(b) for more • Certificate of indebtedness,
information. • Letter of advice, or
• Other written notice, which states the dollar amount
Line 2. Nonpatronage Income Allocated to allocated to the patron by the cooperative and the part, if
Patrons (Section 521 Cooperatives Only) any, which is a patronage dividend.
Enter nonpatronage income allocated to patrons. Payment In general, a qualified written notice of allocation is a
may be in: written notice of allocation that is:
• Money, • Paid as part of a patronage dividend, in money or by
• Qualified written notices of allocation, or qualified check equal to at least 20% of the patronage
• Other property (except nonqualified written notices of dividend, and
allocation). • One of the following conditions is met:
The amounts must be paid during the payment period 1. The patron must have at least 90 days from the date
that begins on the 1st day of the tax year and ends on the the written notice of allocation is paid to redeem it in cash,
15th day of the 9th month after the end of the tax year in and must receive written notice of the right of redemption
which the income was earned. at the time the patron receives the allocation; or
Nonpatronage income. Nonpatronage income 2. The patron must agree to have the allocation
includes incidental income from sources not directly treated as constructively received and reinvested in the
related to: cooperative. See section 1388(c)(2) and the related

22 Instructions for Form 1120-C

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regulations for information on how this consent must be
made. Schedule J.
Line 3d. Nonqualified written notices of allocation. If Tax Computation
a written notice of allocation does not qualify, no
deduction is allowable at the time it is issued. However, Line 1. Income Tax
the cooperative is entitled to a deduction or refund of tax Multiply taxable income (page 2, line 27) by 21% (0.21).
when the nonqualified written notice of allocation is finally Enter this amount on line 1.
redeemed, if that notice was paid as a patronage dividend Deferred tax under section 1291. If the cooperative
during the payment period for the tax year during which was a shareholder in a PFIC and received an excess
the patronage occurred. The deduction or refund is distribution or disposed of its investment in the PFIC
allowed, but only to the extent that amounts paid to during the year, it must include the increase in taxes due
redeem the nonqualified written notices of allocation are under section 1291(c)(2) (from Form 8621) in the total for
paid in money or other property (other than written notices line 1. On the dotted line next to line 1, enter “Section
of allocation) which do not exceed the stated dollar 1291” and the amount.
amounts of the nonqualified written notices of allocation.
See section 1382(b) and Regulations sections 1.1382-2 Do not include on line 1 any interest due under section
and 1383. 1291(c)(3). Instead, include the amount of interest owed
on Schedule J, line 8z, as other interest.
Section 1383 provides special rules for figuring the
cooperative's tax in the year nonqualified written notices of For more information on reporting the deferred tax and
allocation are redeemed. See Regulations section interest, see the Instructions for Form 8621.
1.1383-3 and the instructions for page 2, line 30h for the Increase in tax attributable to partner's audit liability
adjustment, if any, to report on line 30h. under section 6226. If the cooperative is filing Form
Amounts paid to patrons are not patronage dividends if 8978 to report adjustments shown on Form 8986 they
paid: received from partnerships which have been audited and
have elected to push out imputed underpayments to their
1. Out of earnings not from business done with or for
partners, include any increase in taxes due (positive
patrons;
amount) from Form 8978, line 14, in the total for Form
2. Out of earnings from business done with or for other 1120-C, Schedule J, line 1. On the dotted line next to
patrons to whom no amounts or smaller amounts are paid line 1, enter "FROM FORM 8978" and the amount. Attach
for substantially identical transactions; Form 8978. If Form 8978, line 14, shows a decrease in
3. To redeem capital stock, certificates of tax, see the instructions for Schedule J, line 6.
indebtedness, revolving fund certificates, retain
certificates, letters of advice, or other similar documents; Line 2. Base Erosion Minimum Tax
or If the cooperative had gross receipts of at least $500
4. Without reference to the net earnings of the million in any 1 of the 3 tax years preceding the current tax
cooperative organization from business done with or for its year, complete and attach Form 8991. Enter on line 2 the
patrons. base erosion minimum tax amount from Form 8991, Part
IV, line 5e. See section 59A and the Instructions for Form
Line 4. Section 199A(g) deduction allocated to pa- 8991. Also, see Schedule K, Question 16, later.
trons. For agricultural and horticultural cooperatives only,
cooperatives engaged in the marketing or manufacture, Line 3. Corporate Alternative Minimum Tax
production, growth, or extraction of agricultural or Enter on line 3 the amount from Form 4626, Part II, line 13,
horticultural products may be eligible to compute a if applicable. See the Instructions for Form 4626.
deduction under section 199A(g). See the instructions for
page 1, line 22. Line 5a. Foreign Tax Credit
An agricultural or horticultural cooperative, as defined To find out when a cooperative can take the credit for
in section 199A(g), must reduce its section 1382 payment of income tax to a foreign country or U.S.
deduction by the amount of the section 199A(g) deduction territory, see Form 1118, Foreign Tax
that was passed through to patrons. Credit—Corporations.

Note. Only include on line 4 the portion of the section Line 5b. Qualified Electric Vehicle Credit
199A(g) deduction attributable to the qualified payments Enter any qualified electric vehicle passive activity credits
reported on this schedule. Marketing cooperatives that from prior years allowed for the current tax year from Form
distribute patronage as per-unit retain allocations must 8834, Qualified Electric Vehicle Credit, line 7. Attach Form
attach a statement showing the amount of the section 8834.
199A(g) deduction attributable to the per-unit retain
allocations. Line 5c. General Business Credit
Use Form 3800 to claim any general business credits.
Enter on line 5c the allowable credit from Form 3800, Part
II, line 38. See the Instructions for Form 3800.

Instructions for Form 1120-C 23

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Elective allocations to patrons of subchapter T coop- Line 8
eratives. The cooperative may elect to allocate any or all Include the following taxes and interest on lines 8a
of certain credits among the patrons based on the quantity through 8z. Enter the total on line 9.
or value of business done with or for such patrons. This
Line 8a. Recapture of investment credit. If the
includes the following, if applicable:
cooperative disposed of investment credit property or
• Biofuel producer credit (Form 6478);
changed its use before the end of the 5-year recapture
• Renewable electricity, refined coal, and Indian coal
period under section 50(a), enter the increase in tax from
production credit (Form 8835);
Form 4255, Recapture of Investment Credit. See the
• Biodiesel, renewable diesel, or sustainable aviation
Instructions for Form 4255.
fuels credit (Form 8864); and
• Low sulfur diesel fuel production credit (Form 8896). Line 8b. Recapture of low-income housing credit. If
For the allocation to take effect, the cooperative must the cooperative disposed of property (or there was a
designate the apportionment in a written notice mailed to reduction in the qualified basis of the property) for which it
its patrons before the due date of the cooperative's return. took the low-income housing credit and the cooperative
The credit amount allocated to patrons cannot be included did not follow the procedures that would have prevented
on line 5c. Once made, the election cannot be revoked. recapture of the credit, it may owe a tax. See Form 8611,
For more information, see the instructions for the Recapture of Low-Income Housing Credit.
applicable credit form. Also, see the Instructions for Form Line 8c. Alternative tax on qualifying shipping activi-
3800. For tax associated with a decrease in the credit ties. Enter any alternative tax on qualifying shipping
allocated to patrons, see Line 8z. Other, later. activities from Form 8902. Check the box for Form 8902.
Required allocations to patrons of subchapter T co- Line 8z. Other. Include on line 8z any additional taxes
operatives. Any excess of the certain credits that are not and interest such as the items discussed below. Attach a
used by the cooperative because of the tax liability statement showing the computation of each item included
limitation must be passed through to the patrons. This in the total for line 8z and identify the applicable Code
includes the following credits, if applicable. section and the type of tax or interest.
• Investment credit (Form 3468). • Recapture of Indian employment credit. Generally, if an
• Work opportunity credit (Form 5884). employer terminates the employment of a qualified
• Empowerment zone employment credit (Form 8844). employee less than 1 year after the date of initial
• Indian employment credit (Form 8845). employment, any Indian employment credit allowed for a
• Credit for employer differential wage payments (Form prior tax year because of wages paid or incurred to that
8932). employee must be recaptured. For details, see Form 8845
• Credit for small employer health insurance premiums and section 45A.
(Form 8941). • Recapture of new markets credit (see Form 8874, New
These credits cannot be carried back or over by the Markets Credit, and Form 8874-B, Notice of Recapture
cooperative. See the applicable form and related Event for New Markets Credit).
instructions for details. For tax associated with a recapture • Recapture of employer-provided childcare facilities and
of credit, see Line 8z. Other, later. services credit (see Form 8882).
• Interest on deferred tax attributable to (a) installment
Line 5d. Credit for Prior Year Minimum Tax sales of certain timeshares and residential lots (section
To figure any allowable minimum tax credit and any 453(l)(3)), and (b) certain nondealer installment
carryforward of that credit, use Form 8827. obligations (section 453A(c)).
• Interest due on deferred gain (section 1260(b)).
Line 5e. Bond Credits • Interest due under section 1291(c)(3). See Form 8621
Enter allowable credits from Form 8912, Credit to Holders and the Instructions for Form 8621.
of Tax Credit Bonds, line 12. Recapture of elective allocation of credit to
patrons. If the amount of any of the following elective
Line 6. Total Credits credits apportioned to any patron is decreased, there is a
Add lines 5a through 5e and enter the total on line 6. tax imposed on the cooperative, not the patron.
Decrease attributable to partner's audit liability un- • Biofuel producer credit (Form 6478). See section 40(g)
der section 6226. If the cooperative is filing Form 8978 (6)(B)(iii).
to report adjustments shown on Form 8986 they received • Renewable electricity, refined coal, and Indian coal
from partnerships which have been audited and have production credit (Form 8835). See section 45(e)(11)(C).
elected to push out imputed underpayments to their • Biodiesel, renewable diesel, or sustainable aviation
partners, include any decrease in taxes due (negative fuels credit (Form 8864). See section 40A(e)(6)(B)(iii).
amount) from Form 8978, line 14, in the total for Form • Low sulfur diesel fuel production credit (Form 8896).
1120-C, Schedule J, line 6. On the dotted line next to See section 45H(f)(3).
line 6, enter "FROM FORM 8978" and the amount. Attach For details on the recapture of the credits, see the
Form 8978. If Form 8978, line 14, shows an increase in instructions for the applicable form.
tax, see the instructions for Schedule J, line 1. Recapture of required excess credit allocated to
patrons. If the cooperative allocated excess credit to
patrons, any credit recapture applies as if the cooperative
had claimed the entire credit. For details, see section

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46(h) (as in effect prior to enactment of the Revenue Note. If the cooperative is an “excluded member” of a
Reconciliation Act of 1990). This applies to the following controlled group (see definition in the Instructions for
credits. Schedule O (Form 1120)), it is still considered a member
• Investment credit (Form 3468). of a controlled group for this purpose.
• Work opportunity credit (Form 5884). Affiliated group. An affiliated group is one or more
• Empowerment zone employment credit (Form 8844). chains of includible corporations (as defined in section
• Indian employment credit (Form 8845). 1504(b)) connected through stock ownership with a
• Credit for small employer health insurance premiums common parent corporation. See section 1504(a). The
(Form 8941). common parent must be an includible corporation and the
• Credit for employer differential wage payments (Form following requirements must be met.
8932). 1. The common parent must own directly stock that
represents at least 80% of the total voting power and at
Line 10. Total Tax
least 80% of the total value of the stock of at least one of
Include any deferred tax on the termination of a section the other includible corporations, and
1294 election applicable to shareholders in a qualified
electing fund in the amount entered on line 10. See the 2. Stock that represents at least 80% of the total voting
Instructions for Form 8621. power and at least 80% of the total value of the stock of
each of the other corporations (except for the common
Subtract any deferred tax on the cooperative's share of parent) must be owned directly by one or more of the
undistributed earnings of a qualified electing fund. See the other includible corporations.
Instructions for Form 8621.
For this purpose, “stock” generally does not include any
How to report. If deferring tax, attach a statement stock that (a) is nonvoting, (b) is nonconvertible, (c) is
showing the computation of each item included in, or limited and preferred as to dividends and does not
subtracted from, the total for line 10. On the dotted line participate significantly in corporate growth, and (d) has
next to line 10, specify (a) the applicable Code section, (b) redemption and liquidation rights that do not exceed the
the type of tax, and (c) the amount of tax. issue price of the stock (except for a reasonable
redemption or liquidation premium). See section 1504(a)
Schedule K. (4).

Other Information Item 7
Complete all items and questions that apply to the Enter the cooperative's total assets (as determined by the
cooperative. accounting method regularly used in keeping the
cooperative's books and records) at the end of the tax
Item 2 year. If there are no assets at the end of the tax year,
See the list of Principal Business Activity Codes, later. enter -0-.
Using the list of codes and activities, determine from
If the cooperative is required to complete Schedule L,
which activity the cooperative derives the highest
percentage of its total receipts. Enter on lines 2a, 2b, and enter total assets from Schedule L, line 13, column (d). If
2c the principal business activity code number, the filing a consolidated return, report total consolidated
cooperative's business activity, and a description of the assets for all cooperatives and corporations joining in the
principal product or service of the cooperative. For return.

nonstore retailers, select the PBA code by the primary Question 8
product that your establishment sells. For example,
establishments primarily selling prescription and Check the “Yes” box if one foreign person owned at least
non-prescription drugs, select PBA code 456110 25% of (a) the total voting power of all classes of stock of
Pharmacies & Drug Retailers. the cooperative entitled to vote, or (b) the total value of all
classes of stock of the cooperative.
Question 5 The constructive ownership rules of section 318 apply
Check the “Yes” box for Question 5 if: in determining if a cooperative is foreign owned. See
1. The cooperative is a subsidiary in an affiliated group section 6038A(c)(5) and the related regulations.
(defined later), but is not filing a consolidated return for the If the cooperative checked “Yes,” enter on line 8a the
tax year with that group, or percentage owned by the foreign person specified in
2. The cooperative is a subsidiary in a Question 8. On line 8b, enter the name of the owner's
parent-subsidiary controlled group. For a definition of a country.
parent-subsidiary controlled group, see the Instructions for
Schedule O (Form 1120). Note. If there is more than one 25%-or-more foreign
owner, complete lines 8a and 8b for the foreign person
Any cooperative that meets either of the above with the highest percentage of ownership.
requirements should check the “Yes” box. This applies
even if the cooperative is a subsidiary member of one Foreign person. The term “foreign person” means:
group and the parent corporation of another. • An individual who is not a citizen or resident of the
United States;

Instructions for Form 1120-C 25

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• An individual who is a citizen or resident of a U.S. all NOLs generated in prior years but not used to offset
possession who is not otherwise a citizen or resident of income (either as a carryback or carryover) in a tax year
the United States; prior to 2023. Do not reduce the amount by any NOL
• Any partnership, association, company, or corporation deduction reported on page 1, line 26a.
that is not created or organized in the United States;
• Any foreign estate or trust within the meaning of section Question 16
7701(a)(31); or If the cooperative had gross receipts of at least $500
• A foreign government (or one of its agencies or million in any 1 of the 3 preceding tax years, complete
instrumentalities) to the extent that it is engaged in the Form 8991 and attach it to this return. For this purpose,
conduct of a commercial activity, as described in section the cooperative's gross receipts include the gross receipts
892. of all persons aggregated with the cooperative, as
However, the term “foreign person” does not include specified in section 59A(e)(3). See the Instructions for
any foreign person who consents to the filing of a joint Form 8991 to determine if the cooperative is subject to the
income tax return. base erosion minimum tax.

Owner's country. For individuals, the term “owner's Question 17
country” means the country of residence. For all others, it The limitation on business interest expense applies to
is the country where incorporated, organized, created, or every taxpayer with a trade or business, unless the
administered. taxpayer meets certain specified exceptions. A taxpayer
Requirement to file Form 5472. If the cooperative may elect out of the limitation for certain businesses
checked “Yes,” it may have to file Form 5472, Information otherwise subject to the business interest expense
Return of a 25% Foreign-Owned U.S. Corporation or a limitation. See Question 18. Also, see the Instructions for
Foreign Corporation Engaged in a U.S. Trade or Business. Form 8990.
Generally, a 25% foreign-owned cooperative that had a Certain real property trades or businesses and farming
reportable transaction with a foreign or domestic related businesses qualify to make an election not to limit
party during the tax year must file Form 5472. See the business interest expense. This is an irrevocable election.
Instructions for Form 5472 for filing instructions and If you make this election, you are required to use the
penalties for failure to file. alternative depreciation system to depreciate any
nonresidential real property, residential rental property,
Item 10
and qualified improvement property for an electing real
Show any tax-exempt interest received or accrued. property trade or business, and any property with a
Include any exempt-interest dividends received as a recovery period of 10 years or more for an electing
shareholder in a mutual fund or other RIC. Also, if farming business. See section 168(g)(1)(F). Also, you are
required, include the same amount on Schedule M-1, not entitled to the special depreciation allowance for that
line 7 (or Schedule M-3 (Form 1120), Part II, line 13, if property. For a taxpayer with more than one qualifying
applicable). business, the election is made with respect to each
business.
Item 12
Generally, if the cooperative has an NOL for tax year Check “Yes” if the taxpayer has an election in effect to
2023, it can elect to waive the entire carryback period for exclude a real property trade or business or a farming
the NOL and instead carry the NOL forward to future tax business from section 163(j). For more information, see
years. To do so, check the box in Item 12 and file the section 163(j) and the Instructions for Form 8990.
return by its due date, including extensions. Do not attach
Question 18
the statement described in Temporary Regulations section
301.9100-12T. Once made, the election is irrevocable. Generally, a taxpayer with a trade or business must file
Form 8990 to claim a deduction for business interest. In
If the cooperative timely filed its return for the loss year addition, Form 8990 must be filed by any taxpayer that
without making the election, it can make the election on an owns an interest in a partnership with current-year or
amended return filed within 6 months of the due date of prior-year carryover, excess business interest expense
the loss year return (excluding extensions). Attach the allocated from the partnership.
election to the amended return and write “Filed pursuant Exclusions from filing. A taxpayer is not required to file
to section 301.9100-2” on the election statement. See the Form 8990 if the taxpayer is a small business taxpayer
Instructions for Form 1139. and does not have excess business interest expense from
Cooperatives filing a consolidated return that elect to a partnership. A taxpayer is also not required to file Form
waive the entire carryback period for the group must 8990 if the taxpayer only has business interest expense
check the box in Item 12 and attach the statement from these excepted trades or businesses:
required by Regulations section 1.1502-21(b)(3) or the • An electing real property trade or business,
election will not be valid. • An electing farming business, or
• Certain utility businesses.
Item 13 Small business taxpayer. A small business taxpayer is
Enter the amount of the NOL carryover to the tax year not subject to the business interest expense limitation and
from prior years, even if some of the loss is used to offset is not required to file Form 8990. A small business
income on this return. The amount to enter is the total of taxpayer is a taxpayer that (a) is not a tax shelter (as

26 Instructions for Form 1120-C

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defined in section 448(d)(3)), and (b) meets the gross Line 5. Investments
receipts test of section 448(c), discussed next. Include on this line:
Gross receipts test. For 2023, a taxpayer meets the • State and local government obligations, the interest on
gross receipts test if the taxpayer has average annual which is excludable from gross income under section
gross receipts of $29 million or less for the 3 prior tax 103(a); and
years. A taxpayer's average annual gross receipts for the • Stock in a mutual fund or other RIC that distributed
3 prior tax years is determined by adding the gross exempt-interest dividends during the tax year of the
receipts for the 3 prior tax years and dividing the total by 3. cooperative.
Gross receipts include the aggregate gross receipts from
all persons treated as a single employer, such as a Line 26. Adjustments to Shareholders' Equity
controlled group of corporations, commonly controlled Some examples of adjustments to report on this line
partnerships, or proprietorships, and affiliated service include:
groups. See section 448(c) and the Instructions for Form • Unrealized gains and losses on securities held
8990 for additional information. “available for sale.”
• Foreign currency translation adjustments.
Question 19 • The excess of additional pension liability over
If the cooperative is a member of a controlled group, unrecognized prior service cost.
check the "Yes" box. Complete and attach Schedule O • Guarantees of employee stock (ESOP) debt.
(Form 1120), Consent Plan and Apportionment Schedule • Compensation related to employee stock award plans.
for a Controlled Group. Component members of a If the total adjustment to be entered on line 26 is a
controlled group must use Schedule O to report the negative amount, enter the amount in parentheses.
apportionment of certain tax benefits between the
members of the group. See Schedule O and the
Instructions for Schedule O for more information. Schedule M-1.
Reconciliation of Income (Loss) per
Question 20
Check the appropriate boxes to indicate if the cooperative Books With Income per Return
is required to file Form 4626. If the cooperative does not In completing Schedule M-1, the following apply.
meet the requirements of the safe harbor method, as • Cooperatives with total receipts (page 1, line 1a plus
provided under section 59(k)(3)(A) and Notice 2023-7, lines 4 through 9) and total assets at the end of the tax
2023-3 I.R.B. 390, available at IRS.gov/irb/ year less than $250,000 are not required to complete
2023-03_IRB#NOT-2023-7, for the current year, Form Schedules L, M-1, and M-2 if the “Yes” box on
4626 must be completed and attached to the Schedule K, Question 14, is checked.
cooperative's return. See the Instructions for Form 4626. • Cooperatives with total assets non-consolidated (or
consolidated for all cooperatives/corporations included
Schedule L. with the tax consolidation group) of $10 million or more on
the last day of the tax year must file Schedule M-3 (Form
Balance Sheets per Books 1120) instead of Schedule M-1.
The balance sheets should agree with the cooperative's • A cooperative filing Form 1120-C that is not required to
books and records. file Schedule M-3 (Form 1120) may voluntarily file
Schedule M-3 instead of Schedule M-1.
Cooperatives with total receipts (page 1, line 1a plus • Cooperatives that (a) are required to file Schedule M-3
lines 4 through 9) and total assets at the end of the tax (Form 1120) and have less than $50 million total assets at
year less than $250,000 are not required to complete the end of the tax year, or (b) are not required to file
Schedules L, M-1, and M-2 if the “Yes” box on Schedule M-3 (Form 1120) and voluntarily file
Schedule K, Question 14, is checked. Schedule M-3 (Form 1120), must either (i) complete
Schedule M-3 (Form 1120) entirely, or (ii) complete
Cooperatives with total assets nonconsolidated (or
Schedule M-3 (Form 1120) through Part I, and complete
consolidated for all cooperatives and corporations
Form 1120-C, Schedule M-1 instead of completing Parts II
included within the consolidated tax group) of $10 million
and III of Schedule M-3 (Form 1120). If the cooperative
or more on the last day of the tax year must file
chooses to complete Schedule M-1 instead of completing
Schedule M-3 (Form 1120). However, see the instructions
Parts II and III of Schedule M-3, the amount on
for Schedule M-1, later. See the separate Instructions for
Schedule M-1, line 1, must equal the amount on
Schedule M-3 (Form 1120) for provisions that also affect
Schedule M-3, Part I, line 11. See the Instructions for
Schedule L.
Schedule M-3 (Form 1120) for more information.
If filing a consolidated return, report total consolidated
Line 5c. Travel and Entertainment
assets, liabilities, and shareholder's equity for all
cooperatives and corporations joining in the return. See Include any of the following if applicable:
Consolidated return, earlier. • Meal expenses not deductible under section 274(n).
• Entertainment expenses not deductible under section
Line 1. Cash 274(a).
Include certificates of deposit as cash on this line. • Qualified transportation fringes not deductible under
section 274(a)(4).

Instructions for Form 1120-C 27

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• Expenses for the use of an entertainment facility. You are not required to provide the information
• The part of business gifts over $25. requested on a form that is subject to the Paperwork
• Expenses of an individual over $2,000, which are Reduction Act unless the form displays a valid OMB
allocable to conventions on cruise ships. control number. Books or records relating to a form or its
• Employee achievement awards of non-tangible property instructions must be retained as long as their contents
or of tangible property over $400 ($1,600 if part of a may become material in the administration of any Internal
qualified plan). Revenue law. Generally, tax returns and return information
• Nondeductible club dues. are confidential, as required by section 6103.
• The part of luxury water travel expenses not deductible
under section 274(m). The time needed to complete and file this form will vary
• Expenses for travel as a form of education. depending on individual circumstances. The estimated
• Other nondeductible expenses for travel and burden for business taxpayers filing this form is approved
entertainment. under OMB control number 1545-0123 and is included in
the estimates shown in the instructions for their business
Line 7. Tax-exempt Interest income tax return.
Report any tax-exempt interest received or accrued,
If you have comments concerning the accuracy of
including any exempt-interest dividends received as a
these time estimates or suggestions for making this form
shareholder in a mutual fund or other RIC. Also, report this
simpler, we would be happy to hear from you. You can
same amount on Schedule K, Item 10.
send us comments through IRS.gov/FormComments. Or
Paperwork Reduction Act Notice. We ask for the write to the Internal Revenue Service, Tax Forms and
information on this form to carry out the Internal Revenue Publications Division, 1111 Constitution Ave. NW,
laws of the United States. You are required to give us the IR-6526, Washington, DC 20224. Do not send Form
information. We need it to ensure that you are complying 1120-C to this address. Instead, see Where To File,
with these laws and to allow us to figure and collect the earlier.
right amount of tax.

28 Instructions for Form 1120-C

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

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Form 1120-C (Continued)
423930 Recyclable Materials          Gasoline Stations & Fuel Dealers    Scenic & Sightseeing                 Activities Related to Credit 
423940 Jewelry, Watch, Precious      457100 Gasoline Stations (including Transportation                       Intermediation
Stone, & Precious Metals             convenience stores with gas)        487000 Scenic & Sightseeing          522300 Activities Related to Credit 
423990 Other Miscellaneous Durable   457210 Fuel Dealers (including      Transportation                               Intermediation (including loan 
Goods                                Heating Oil & Liquefied             Support Activities for                       brokers, check clearing, & 
Merchant Wholesalers and             Petroleum)                          Transportation                               money transmitting)
Nondurable Goods                     Clothing and Accessories Retailers  488100 Support Activities for Air    Securities, Commodity Contracts, 
424100 Paper & Paper Products        458110 Clothing & Clothing          Transportation                       and Other Financial Investments 
424210 Drugs & Druggists' Sundries   Accessories Retailers               488210 Support Activities for Rail   and Related Activities
424300 Apparel, Piece Goods, &       458210 Shoe Retailers               Transportation                       523150 Investment Banking & 
Notions                              458310 Jewelry Retailers            488300 Support Activities for Water          Securities Intermediation
424400 Grocery & Related Products    458320 Luggage & Leather Goods      Transportation                       523160 Commodity Contracts 
424500 Farm Product Raw Materials    Retailers                           488410 Motor Vehicle Towing                  Intermediation
424600 Chemical & Allied Products    Sporting, Hobby, Book, Musical      488490 Other Support Activities for  523210 Securities & Commodity 
424700 Petroleum & Petroleum         Instrument & Miscellaneous          Road Transportation                          Exchanges
Products                             Retailers                           488510 Freight Transportation        523900 Other Financial Investment 
424800 Beer, Wine, & Distilled       459110 Sporting Goods Retailers     Arrangement                                  Activities (including portfolio 
                                                                                                                      management & investment 
Alcoholic Beverages                  459120 Hobby, Toy, & Game Retailers 488990 Other Support Activities for          advice)
424910 Farm Supplies                 459130 Sewing, Needlework, & Piece  Transportation                       Insurance Carriers and Related 
424920 Book, Periodical, &           Goods Retailers                     Couriers and Messengers              Activities
Newspapers                           459140 Musical Instrument &         492110 Couriers & Express Delivery   524110 Direct Life, Health, & Medical 
424930 Flower, Nursery Stock, &      Supplies Retailers                  Services                                     Insurance Carriers
Florists' Supplies                   459210 Book Retailers & News        492210 Local Messengers & Local      524120 Direct Insurance (except Life, 
424940 Tobacco Products &            Dealers (including                  Delivery                                     Health, & Medical) Carriers
Electronic Cigarettes                newsstands)                         Warehousing and Storage              524210 Insurance Agencies & 
424950 Paint, Varnish, & Supplies    459310 Florists                     493100 Warehousing & Storage                 Brokerages
424990 Other Miscellaneous           459410 Office Supplies & Stationery (except lessors of                   524290 Other Insurance Related 
Nondurable Goods                     Retailers                           miniwarehouses &                             Activities (including 
Wholesale Trade Agents & Brokers     459420 Gift, Novelty, & Souvenir    self-storage units)                          third-party administration of 
                                     Retailers                           Information                                  insurance & pension funds)
                                                                                                              Funds, Trusts, and Other Financial 
425120 Wholesale Trade Agents &      459510 Used Merchandise Retailers   Publishing Industries                Vehicles
Brokers                              459910 Pet & Pet Supplies Retailers 513110 Newspaper Publishers          525100 Insurance & Employee 
Retail Trade                         459920 Art Dealers                  513120 Periodical Publishers                 Benefit Funds
Motor Vehicle and Parts Dealers      459930 Manufactured (Mobile) Home   513130 Book Publishers               525910 Form 1120-RIC, Open-End 
441110 New Car Dealers               Dealers                                                                          Investment Funds
441120 Used Car Dealers              459990 All Other Miscellaneous      513140 Directory & Mailing List 
441210 Recreational Vehicle Dealers  Retailers (including tobacco,       Publishers                           525920 Trusts, Estates, & Agency 
                                     candle, & trophy retailers)         513190 Other Publishers                      Accounts
441222 Boat Dealers                  General Merchandise Retailers       513210 Software Publishers           525990 Other Financial Vehicles 
                                                                                                                      (including mortgage REITs & 
441227 Motorcycle, ATV, & All Other  455110 Department Stores            Motion Picture and Sound                     closed-end investment funds)
Motor Vehicle Dealers                455210 Warehouse Clubs,             Recording Industries
441300 Automotive Parts,             Supercenters, & Other               512100 Motion Picture & Video        Real Estate, Rental, and Leasing
Accessories, & Tire Retailers        General Merch. Retailers            Industries (except video             Real Estate
Furniture and Home Furnishings       Nonstore Retailers                  rental)                              531110 Lessors of Residential 
Retailers                            Nonstore retailers sell all         512200 Sound Recording Industries            Buildings & Dwellings 
449110 Furniture Retailers           types of merchandise using          Broadcasting, Content Providers, &           (including equity REITs)
449121 Floor Covering Retailers      such methods as Internet,           Telecommunications                   531120 Lessors of Nonresidential 
449122 Window Treatment Retailers    mail-order catalogs,                516100 Radio & Television                    Buildings (except 
449129 All Other Home Furnishings    interactive television, or direct   Broadcasting Stations                        Miniwarehouses) (including 
Retailers                            sales. These types of               516210 Media Streaming, Social               equity REITs)
                                     Retailers should select the 
Electronics and Appliance Retailers  PBA associated with their           Networks, & Other Content            531130 Lessors of Miniwarehouses & 
449210 Electronics & Appliance       primary line of products sold.      Providers                                    Self-Storage Units (including 
Retailers (including                 For example, establishments         517000 Telecommunications                    equity REITs)
computers)                           primarily selling prescription      (including Wired, Wireless,          531190 Lessors of Other Real Estate 
Building Material and Garden         and nonprescription drugs,          Satellite, Cable & Other                     Property (including equity 
Equipment and Supplies Dealers       select PBA code 456110              Program Distribution,                        REITs)
444110 Home Centers                  Pharmacies & Drug Retailers.        Resellers, Agents, Other             531210 Offices of Real Estate Agents 
                                                                         Telecommunications, &                        & Brokers
444120 Paint & Wallpaper Retailers   Transportation and                  Internet Service Providers)          531310 Real Estate Property 
444140 Hardware Retailers            Warehousing                         Data Processing, Web Search                  Managers
                                                                         Portals, & Other Information 
444180 Other Building Material       Air, Rail, and Water Transportation Services                             531320 Offices of Real Estate 
                                                                                                                      Appraisers
444200 Lawn & Garden Equipment &     481000 Air Transportation
Dealers                                                                  518210 Computing Infrastructure      531390 Other Activities Related to 
Supplies Retailers                   482110 Rail Transportation          Providers, Data Processing,                  Real Estate
Food and Beverage Retailers          483000 Water Transportation         Web Hosting, & Related 
                                                                         Services                             Rental and Leasing Services
445110 Supermarkets & Other          Truck Transportation                519200 Web Search Portals,           532100 Automotive Equipment Rental 
Grocery Retailers (except            484110 General Freight Trucking,    Libraries, Archives, & Other                 & Leasing
Convenience)                         Local                               Info. Services                       532210 Consumer Electronics & 
445131 Convenience Retailers         484120 General Freight Trucking,    Finance and Insurance                        Appliances Rental
445132 Vending Machine Operators     Long-distance                                                            532281 Formal Wear & Costume 
445240 Meat Retailers                484200 Specialized Freight Trucking Depository Credit Intermediation             Rental
445250 Fish & Seafood Retailers      Transit and Ground Passenger        522110 Commercial Banking            532282 Video Tape & Disc Rental
445230 Fruit & Vegetable Retailers   Transportation                      522130 Credit Unions                 532283 Home Health Equipment 
445291 Baked Goods Retailers         485110 Urban Transit Systems        522180 Savings Institutions & Other          Rental
445292 Confectionery & Nut Retailers 485210 Interurban & Rural Bus       Depository Credit                    532284 Recreational Goods Rental
                                     Transportation                      Intermediation                       532289 All Other Consumer Goods 
445298 All Other Specialty Food      485310 Taxi & Ridesharing Services  Nondepository Credit                         Rental
Retailers                                                                Intermediation                       532310 General Rental Centers
445320 Beer, Wine, & Liquor          485320 Limousine Service
Retailers                            485410 School & Employee Bus        522210 Credit Card Issuing           532400 Commercial & Industrial 
Health and Personal Care Retailers   Transportation                      522220 Sales Financing                       Machinery & Equipment 
456110 Pharmacies & Drug Retailers   485510 Charter Bus Industry         522291 Consumer Lending                      Rental & Leasing
456120 Cosmetics, Beauty Supplies,   485990 Other Transit & Ground       522292 Real Estate Credit (including Lessors of Nonfinancial Intangible 
& Perfume Retailers                  Passenger Transportation            mortgage bankers &                   Assets (except copyrighted works)
456130 Optical Goods Retailers       Pipeline Transportation             originators)                         533110 Lessors of Nonfinancial 
456190 Other Health & Personal Care  486000 Pipeline Transportation      522299 Intl, Secondary Market, &             Intangible Assets (except 
                                                                         Other Nondepos. Credit                       copyrighted works)
Retailers                                                                Intermediation

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Form 1120-C (Continued)
Professional, Scientific, and         561210 Facilities Support Services   Medical and Diagnostic               722511 Full-Service Restaurants
                                      561300 Employment Services           Laboratories                         722513 Limited-Service Restaurants
Technical Services                    561410 Document Preparation          621510 Medical & Diagnostic          722514 Cafeterias, Grill buffets, & 
Legal Services                        Services                             Laboratories                              Buffets
541110 Offices of Lawyers             561420 Telephone Call Centers        Home Health Care Services            722515 Snack & Non-alcoholic 
541190 Other Legal Services           561430 Business Service Centers      621610 Home Health Care Services          Beverage Bars
Accounting, Tax Preparation,          (including private mail centers      Other Ambulatory Health Care         Other Services
Bookkeeping, and Payroll Services     & copy shops)                        Services
541211 Offices of Certified Public    561440 Collection Agencies           621900 Other Ambulatory Health       Repair and Maintenance
Accountants                           561450 Credit Bureaus                Care Services (including             811110 Automotive Mechanical & 
541213 Tax Preparation Services       561490 Other Business Support        ambulance services & blood                Electrical Repair & 
541214 Payroll Services               Services (including                  & organ banks)                            Maintenance
541219 Other Accounting Services      repossession services, court         Hospitals                            811120 Automotive Body, Paint, 
                                      reporting, & stenotype               622000 Hospitals                          Interior, & Glass Repair
Architectural, Engineering, and       services)                            Nursing and Residential Care         811190 Other Automotive Repair & 
Related Services                      561500 Travel Arrangement &          Facilities                                Maintenance (including oil 
541310 Architectural Services         Reservation Services                 623000 Nursing & Residential Care         change & lubrication shops & 
541320 Landscape Architecture         561600 Investigation & Security      Facilities                                car washes)
Services                              Services                             Social Assistance                    811210 Electronic & Precision 
                                                                                                                     Equipment Repair & 
541330 Engineering Services           561710 Exterminating & Pest Control  624100 Individual & Family Services       Maintenance
541340 Drafting Services              Services                             624200 Community Food & Housing,     811310 Commercial & Industrial 
541350 Building Inspection Services   561720 Janitorial Services           & Emergency & Other Relief                Machinery & Equipment 
541360 Geophysical Surveying &        561730 Landscaping Services          Services                                  (except Automotive & 
Mapping Services                      561740 Carpet & Upholstery Cleaning  624310 Vocational Rehabilitation          Electronic) Repair & 
541370 Surveying & Mapping (except    Services                             Services                                  Maintenance
Geophysical) Services                 561790 Other Services to Buildings & 624410 Childcare Services            811410 Home & Garden Equipment & 
541380 Testing Laboratories &         Dwellings                                                                      Appliance Repair & 
Services                              561900 Other Support Services        Arts, Entertainment, and                  Maintenance
Specialized Design Services           (including packaging &               Recreation                           811420 Reupholstery & Furniture 
                                                                                                                     Repair
541400 Specialized Design Services    labeling services, &                 Performing Arts, Spectator Sports,   811430 Footwear & Leather Goods 
graphic, & fashion design)            organizers)
(including interior, industrial,      convention & trade show              and Related Industries                    Repair
Computer Systems Design and           Waste Management and                 711100 Performing Arts Companies     811490 Other Personal & Household 
Related Services                      Remediation Services                 711210 Spectator Sports (including        Goods Repair & Maintenance
541511 Custom Computer                562000 Waste Management &            sports clubs & racetracks)           Personal and Laundry Services
Programming Services                  Remediation Services                 711300 Promoters of Performing Arts, 812111 Barber Shops
                                                                           Sports, & Similar Events
541512 Computer Systems Design        Educational Services                 711410 Agents & Managers for         812112 Beauty Salons
Services                              611000 Educational Services          Artists, Athletes, Entertainers,     812113 Nail Salons
541513 Computer Facilities            (including schools, colleges,        & Other Public Figures               812190 Other Personal Care Services 
Management Services                   & universities)                      711510 Independent Artists, Writers,      (including diet & weight 
541519 Other Computer Related         Health Care and Social               & Performers                              reducing centers)
Services                                                                   Museums, Historical Sites, and       812210 Funeral Homes & Funeral 
Other Professional, Scientific, and   Assistance                           Similar Institutions                      Services
Technical Services                    Offices of Physicians and Dentists   712100 Museums, Historical Sites, &  812220 Cemeteries & Crematories
541600 Management, Scientific, &      621111 Offices of Physicians (except Similar Institutions                 812310 Coin-Operated Laundries & 
Technical Consulting                  mental health specialists)           Amusement, Gambling, and                  Drycleaners
Services                                                                   Recreation Industries                812320 Drycleaning & Laundry 
541700 Scientific Research &          621112 Offices of Physicians, Mental                                           Services (except 
Development Services                  Health Specialists                   713100 Amusement Parks & Arcades
541800 Advertising, Public Relations, 621210 Offices of Dentists           713200 Gambling Industries                Coin-Operated)
& Related Services                    Offices of Other Health              713900 Other Amusement &             812330 Linen & Uniform Supply
541910 Marketing Research & Public    Practitioners                        Recreation Industries                812910 Pet Care (except Veterinary) 
Opinion Polling                       621310 Offices of Chiropractors      (including golf courses, skiing           Services
                                                                           facilities, marinas, fitness         812920 Photofinishing
541920 Photographic Services          621320 Offices of Optometrists       centers, & bowling centers)          812930 Parking Lots & Garages
541930 Translation & Interpretation   621330 Offices of Mental Health                                           812990 All Other Personal Services
Services                              Practitioners (except                Accommodation and Food 
541940 Veterinary Services            Physicians)                          Services                             Religious, Grantmaking, Civic, 
                                                                                                                Professional, and Similar 
541990 All Other Professional,        621340 Offices of Physical,          Accommodation                        Organizations
Scientific, & Technical               Occupational & Speech 
Services                              Therapists, & Audiologists           721110 Hotels (except Casino Hotels) 813000 Religious, Grantmaking, 
                                      621391 Offices of Podiatrists        & Motels                                  Civic, Professional, & Similar 
Management of Companies               621399 Offices of All Other          721120 Casino Hotels                      Organizations (including 
(Holding Companies)                   Miscellaneous Health                 721191 Bed & Breakfast Inns               condominium & homeowners 
                                                                                                                     associations)
                                      Practitioners                        721199 All Other Traveler 
551111 Offices of Bank Holding        Outpatient Care Centers              Accommodation                        Other
Companies
551112 Offices of Other Holding       621410 Family Planning Centers       721210 RV (Recreational Vehicle)     999000 Unclassified Establishments 
Companies                             621420 Outpatient Mental Health &    Parks & Recreational Camps                (unable to classify)
                                      Substance Abuse Centers              721310 Rooming & Boarding Houses, 
Administrative and Support,           621491 HMO Medical Centers           Dormitories, & Workers’ 
Waste Management, and                 621492 Kidney Dialysis Centers       Camps
Remediation Services                  621493 Freestanding Ambulatory       Food Services and Drinking Places
                                      Surgical & Emergency                 722300 Special Food Services 
Administrative and Support            Centers                              (including food service 
Services                              621498 All Other Outpatient Care     contractors & caterers)
561110 Office Administrative          Centers                              722410 Drinking Places (Alcoholic 
Services                                                                   Beverages)

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Index
 
A                                            E                                         O
Accounting methods   5                       Electronic Federal Tax Payment System     Other deductions:
Accounting period  5                           (EFTPS)    4                             Amortization  14
Address change   8                           Employee benefit programs      14          Depletion   14
Advance payments    8                        Employer identification number (EIN)    7  Entertainment expenses   14
Affiliated group 25                          Estimated tax  4                           Insurance premiums     14
Allocation of patronage and                    Overpaid   17                            Legal and professional fees      14
  nonpatronage income and                      Payments     17                          Organizational costs   14
  deductions  21                               Penalty  4                               Reforestations costs   14
Allocations to patrons:                      Extension of time to file  3               Repairs and maintenance      14
  Elective 24                                                                           Start-up costs 14
  Recapture of elective allocation of credit F                                          Supplies  14
  to patrons    24                                                                      Travel expenses  14
  Recapture of required excess credit        Final return 8
  allocated to patrons  24                   Foreign person (defined)     25            Utilities 14
  Required 24                                Foreign tax credit 23                     Other income  9
Amended return   8                           Forms and publications, how to get    2   Other information 25
Amortization  10                                                                       Other taxes:
Assembling the return   3                    G                                          Recapture   24
                                                                                       Overpaid estimated tax   17
At-risk rules 16                             General business credit     23
                                             General instructions     2
B                                            Gross receipts   8                        P
Backup withholding  18                       Gross rents and royalties    9            Paid preparer authorization    3
Bad debts  11                                                                          Partnership income (loss)     14
Balance sheets per books   27                I                                         Passive activity limitations  11
                                                                                       Patronage dividends     9 22, 
Bond credits  24                             Identifying information    7              Payment, depository methods of      4
Business start-up expenses   10              Income  8                                 Penalties  18
                                             Income from qualifying shipping 
C                                              activities   8                           Late filing of return 4
Capital construction fund (See Merchant      Initial return 8                           Late payment of tax    4
  Marine capital construction fund)          Installment sales  8                       Trust fund recovery penalty   4
Charitable contributions  12                 Interest:                                 Penalty:
Closely held cooperatives  11                  Income   9                               Estimated tax  18
Compensation of officers  11                 Interest and penalties    4                Late filing 4
Consolidated return 26                       Interest due:                              Late payment   4
Contributions to reduce debt held by           Late payment of tax    4                Pension, profit-sharing, etc., plans 13
  the public  2                              Interest expense   12                     Per-unit retain allocations   9
Contributions, charitable 12                 Interest expense (relating to section     Preparer, tax return   3
Corporate alternative minimum tax     23,      263A)   10                              Principal business activity codes   29
  27                                         Interest income:                          Private delivery services 3
Cost of goods sold  9                          Tax-exempt   26 28, 
Credits:                                     Inventory:                                Q
  Foreign tax 23                               Section 263A uniform capitalization     Qualified written notice of allocation 22
  Form 2439   17                               rules    10                             Qualifying shipping activities, Income 
  Form 4136   17                                                                        from   8
  General business  23                       L
  Recapture of 24                            Limitations on deductions    10 13,       R
  Reducing expenses   11                     Lobbying expenses,                        Reconciliation of income (Sch M-1)   27
                                               nondeductibility   15                   Recordkeeping   5
D                                                                                      Refund  18
Deductions  10                               M                                         Refundable credits 17
Deductions and adjustments under             Merchant Marine capital construction      Related taxpayer transactions     10
  section 1382   22                            fund:                                   Rents (expense)  11
Depletion  14                                  Deduction for contributions  17
Depository methods of tax payment     4      Minimum tax:                              S
Depreciation  13                               Prior year, credit for 24               Salaries and wages     11
Disclosure statement, reportable                                                       Schedule:
  transaction  6                             N                                          C 18
Dividends  9
                                             Name and address   6
Dividends and special deductions    18                                                  G 21
                                             Name change      8
Dividends-received deduction   21                                                       H 22
                                             Net operating loss 16 26, 
Domestic production activities                                                          J 23
  deduction allocation  23                   Nonaccrual experience method      8        K 25
Dues, membership and other    15             Nonpatronage income       22               L 27
                                                                                        M-1   27
                                                                                        M-3 (Form 1120)  7

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Section 1382, deductions and        Tax issues, unresolved 2             Where to file 2
 adjustments 16                     Tax-exempt securities 27             Who must file 2
Section 1383 adjustment 17          Taxes and licenses 12                Who must sign  3
Section 263A costs 10               Taxpayer Advocate  2                 Worksheet:
Shareholders' equity adjustments 27 Travel and entertainment 27          Schedule C
Signature 3                         Travel, meals, and entertainment  15 Written notice of allocation:
Specific instructions 6             Trust fund recovery penalty 4        Nonqualified   23
                                    Type of cooperative 7                Qualified 22
T
Tax computation 23                  W
                                    When to file 2

                                                                                                                         33

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