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                                                                                                   Department of the Treasury
                                                                                                   Internal Revenue Service
2022

Instructions for Form 1120-C

U.S. Income Tax Return for Cooperative Associations

Section references are to the Internal             Future Developments                      2022 (IRA) imposes a corporate 
Revenue Code unless otherwise noted.                                                        alternative minimum tax (AMT). 
Contents                                    Page   For the latest information about         Applicable cooperatives (within the 
                                                   developments related to Form 1120-C 
Future Developments  .      . . . . . . . . . . 1                                           meaning of section 59(k)) may be 
                                                   and its instructions, such as 
What’s New .  . . . . . . . . . . . . . . . . . 1                                           required to pay this AMT. Short-period 
                                                   legislation enacted after they were 
Photographs of Missing Children         . . . . 1                                           filers with a tax year beginning after 
The Taxpayer Advocate Service .         . . . . 1  published, go to IRS.gov/Form1120c.      December 31, 2022, and ending 
How To Make a Contribution To                                                               before December 31, 2023, see 
Reduce Debt Held by the                            What’s New                               section 55 and the instructions for 
Public .    . . . . . . . . . . . . . . . . . . 2                                           Schedule J, line 8, later.
How To Get Forms and                               Increase in penalty for failure to 
Publications .      . . . . . . . . . . . . . . 2  file. For returns due in 2023, the       Advanced manufacturing invest-
General Instructions .  . . . . . . . . . . . . 2  minimum penalty for failure to file a    ment credit. An eligible cooperative 
Purpose of Form .   . . . . . . . . . . . . . . 2  return that is more than 60 days late    that held a qualified investment in an 
Who Must File   . . . . . . . . . . . . . . . . 2  has increased to the smaller of the tax  advanced manufacturing facility 
Where To File . . . . . . . . . . . . . . . . . 2  due or $450. See Late filing of return,  placed in service after December 31, 
When To File .  . . . . . . . . . . . . . . . . 2  later.                                   2022, can elect to treat the credit for 
Who Must Sign .   . . . . . . . . . . . . . . . 3  Form 1120-W now historical.      Form    the advanced manufacturing 
Assembling the Return .     . . . . . . . . . . 3  1120-W, Estimated Tax for                investment as a deemed payment. If 
Tax Payments    . . . . . . . . . . . . . . . . 3  Corporations, and the Instructions for   the election is made, the cooperative 
Estimated Tax Payments        . . . . . . . . . 4  Form 1120-W are now historical. The      is treated as making a payment 
Interest and Penalties .  . . . . . . . . . . . 4  2022 Form 1120-W (released in 2021)      against tax by the amount of the 
Accounting Methods .      . . . . . . . . . . . 4  and the 2022 Instructions for Form       credit. See section 48D. See the 
Accounting Period .   . . . . . . . . . . . . . 5  1120-W (released in 2021) will be the    Instructions for Form 3468 for 
Rounding Off to Whole Dollars .       . . . . . 5                                           information on how to report the 
                                                   last revision of both the form and its 
Recordkeeping .   . . . . . . . . . . . . . . . 5                                           deemed credit on the cooperative's 
                                                   instructions. Prior versions will be 
Other Forms and Statements That                                                             return.
May Be Required           . . . . . . . . . . . 5  available on IRS.gov.
Specific Instructions . . . . . . . . . . . . . 6  Payroll credit for COVID-related         Principal Business Activity Codes. 
Period Covered    . . . . . . . . . . . . . . . 6  paid sick leave and family leave.        The list of principal business activities 
Name and Address .      . . . . . . . . . . . . 6  Generally, the credit for qualified sick (PBA) codes has been updated. See 
Item A. Identifying Information .     . . . . . 6  and family leave wages, as enacted       Principal Business Activity Codes.
Item B. Employer Identification                    under the Families First Coronavirus 
Number (EIN) .        . . . . . . . . . . . . . 7  Response Act (FFCRA), and                Photographs of Missing 
Item C. Type of Cooperative .       . . . . . . 7  amended by the COVID-related Tax         Children
Item D. Initial Return, Final Return, 
Name Change, Address                               Relief Act of 2020, and the credit for   The Internal Revenue Service is a 
Change, or Amended Return .               . . . 7  qualified sick and family leave wages,   proud partner with the National Center 
Income . . . . . . . . . . . . . . . . . . . . . 7 as enacted under the American            for Missing & Exploited Children® 
Deductions .  . . . . . . . . . . . . . . . . . 9  Rescue Plan Act of 2021 (the ARP),       (NCMEC). Photographs of missing 
Tax, Refundable Credits, and                       have expired. However, employers         children selected by the Center may 
Payments .        . . . . . . . . . . . . . .   16 that paid qualified sick and family      appear in instructions on pages that 
Schedule C. Dividends, Inclusions,                 leave wages in 2022 for leave taken      would otherwise be blank. You can 
and Special Deductions .            . . . . .   17 after March 31, 2020, and before         help bring these children home by 
Schedule G. Allocation of                          October 1, 2021, may be eligible to      looking at the photographs and calling 
Patronage and Nonpatronage 
Income and Deductions .             . . . . .   20 claim a credit for qualified sick and    1-800-THE-LOST (1-800-843-5678) if 
Schedule H. Deductions and                         family leave wages in 2022. See the      you recognize a child.
Adjustments Under Section                          March 2022 revision of the 
1382      . . . . . . . . . . . . . . . . . .   21 Instructions for Form 941 and the        The Taxpayer Advocate 
Schedule J. Tax Computation .         . . . .   22 2022 Instructions for Form 944 for       Service
Schedule K. Other Information .       . . . .   24 more information. There is no double     The Taxpayer Advocate Service 
Schedule L. Balance Sheets per                     tax benefit allowed and the amounts      (TAS) is an independent 
Books .     . . . . . . . . . . . . . . . . .   25 claimed are reportable as income.        organization within the IRS that helps 
Schedule M-1. Reconciliation of                    See Line 9. Other Income, later.         taxpayers and protects taxpayer 
Income (Loss) per Books With 
Income per Return .         . . . . . . . . .   26 Alternative minimum tax.      For tax    rights. TAS's job is to ensure that 
Index . . . . . . . . . . . . . . . . . . . . . 30 years beginning after December 31,       every taxpayer is treated fairly and 
                                                   2022, the Inflation Reduction Act of 

Jan 30, 2023                                                   Cat. No. 17211X

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knows and understands their rights        subject to the rules and limitations for • Engaged in generating, 
under the Taxpayer Bill of Rights.        charitable contributions.                transmitting, or otherwise furnishing 
                                                                                   electric energy or providing telephone 
  As a taxpayer, the cooperative has      How To Get Forms                         service to persons in rural areas.
rights that the IRS must abide by in its 
dealings with the cooperative. TAS        and Publications
                                                                                   Where To File
can help the cooperative if:              Internet. You can access the IRS         If the cooperative's principal business, 
• Problems are causing financial          website 24 hours a day, 7 days a         office, or agency is located in the 
difficulty for the business;              week, at IRS.gov to:                     United States, file Form 1120-C at the 
• The business is facing an               • Download forms, instructions, and      following IRS center address:
immediate threat of adverse action; or    publications;
• The cooperative has tried               • Order IRS products online;               Department of the Treasury
repeatedly to contact the IRS but no      • Research your tax questions online;      Internal Revenue Service
one has responded, or the IRS hasn't      • Search publications online by topic      Ogden, UT 84201-0012
responded by the date promised.           or keyword;
                                          • Use the online Internal Revenue          If the cooperative's principal 
  TAS has offices in every state, the     Code, regulations, or other official     business, office, or agency is located 
District of Columbia, and Puerto Rico.    guidance;                                in a foreign country or a U.S. 
                                          •
The cooperative's local advocate's          View Internal Revenue Bulletins        possession, file Form 1120-C at the 
number is in its local directory and at   (IRBs) published in the last few years;  following IRS center address:
TaxpayerAdvocate.IRS.gov. The             and
cooperative can also call TAS at            Sign up to receive local and             Internal Revenue Service
                                          •
877-777-4778.                             national tax news by email.                P.O. Box 409101
  TAS also works to resolve               Tax forms and publications.      The       Ogden, UT 84409
large-scale or systemic problems that     cooperative can view, print, or 
affect many taxpayers. If the             download all of the forms and            When To File
cooperative knows of one of these         publications it may need on IRS.gov/     Generally, a cooperative described in 
broad issues, please report it to TAS     FormsPubs. Otherwise, the                section 6072(d) must file its income 
through the Systemic Advocacy             cooperative can go to IRS.gov/           tax return by the 15th day of the 9th 
Management System at IRS.gov/             OrderForms to place an order and         month after the end of its tax year.
SAMS.                                     have forms mailed to it.
                                                                                     Any cooperative not described in 
  For more information, go to                                                      section 6072(d) must generally file its 
IRS.gov/Advocate.                         General Instructions
                                                                                   tax return by the 15th day of the 4th 
                                                                                   month after the end of its tax year. 
How To Make a                             Purpose of Form
                                                                                   However, a cooperative with a fiscal 
Contribution To Reduce                    Use Form 1120-C, U.S. Income Tax 
                                                                                   tax year ending June 30 must file by 
                                          Return for Cooperative Associations, 
                                                                                   the 15th day of the 3rd month after the 
Debt Held by the Public                   to report income, gains, losses, 
                                                                                   end of its tax year. A cooperative with 
To help reduce debt held by the           deductions, credits, and to figure the 
                                                                                   a short tax year ending anytime in 
public, make a check payable to           income tax liability of the cooperative.
“Bureau of the Fiscal Service.” Send it                                            June will be treated as if the short year 
                                                                                   ended on June 30, and must file by 
to:                                       Who Must File                            the 15th day of the 3rd month after the 
    Bureau of the Fiscal Service          Any corporation operating on a           end of its tax year.
    Attn: Dept G                          cooperative basis under section 1381 
    P.O. Box 2188                         and allocating amounts to patrons on       If the due date falls on a Saturday, 
    Parkersburg, WV 26106-2188            the basis of business done with or for   Sunday, or legal holiday, the 
                                          such patrons should file Form 1120-C     cooperative can file on the next 
                                          (including farmers' cooperatives under  business day.
  Or, enclose the check with the 
                                          section 521 whether or not it has 
corporation's income tax return. In the                                            Private Delivery Services
                                          taxable income).
memo section of the check, make a 
                                                                                   Cooperatives can use certain private 
note that it is a gift to reduce the debt Exceptions.  This does not apply to 
                                                                                   delivery services (PDS) designated by 
held by the public. For information on    organizations which are:
                                                                                   the IRS to meet the “timely mailing as 
how to make this type of contribution     • Exempt from income tax under 
                                                                                   timely filing” rule for tax returns. Go to 
online, go to www.treasurydirect.gov      chapter 1 (other than exempt farmers' 
                                                                                   IRS.gov/PDS for the current list of 
and click on “How To Make a               cooperatives under section 521);
                                                                                   designated services.
Contribution To Reduce the Debt.”         • Subject to Part II (section 591 and 
                                          following), subchapter H, chapter 1        The PDS can tell you how to get 
  Do not add the contributions to any     (relating to mutual savings banks);      written proof of the mailing date.
tax the cooperative may owe. See the      • Subject to subchapter L (section 
instructions for line 32 for details on   801 and following), chapter 1 (relating    For the IRS mailing address to use 
how to pay any tax the cooperative        to insurance companies); or              if you’re using PDS, go to IRS.gov/
owes. Contributions to reduce debt                                                 PDSStreetAddresses.
held by the public are deductible 
                                                          -2-                        Instructions for Form 1120-C

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        Private Delivery Services can't  Paid Preparer Authorization               Complete every applicable entry 
  !     deliver items to P.O. boxes.     If the cooperative wants to allow the     space on Form 1120-C. Do not enter 
CAUTION You must use the U.S. Postal                                               “See Attached” or “Available Upon 
                                         IRS to discuss its 2022 tax return with 
Service to mail any item to an IRS       the paid preparer who signed it, check    Request” instead of completing the 
P.O. box address.                        the “Yes” box in the signature area of    entry spaces. If more space is needed 
                                         the return. This authorization applies    on the forms or schedules, attach 
Extension of Time To File                only to the individual whose signature    separate sheets using the same size 
File Form 7004, Application for          appears in the “Paid Preparer Use         and format as the printed forms.
Automatic Extension of Time To File      Only” section of the cooperative's 
                                                                                   If there are supporting statements 
Certain Business Income Tax,             return. It does not apply to the firm, if 
                                                                                   and attachments, arrange them in the 
Information, and Other Returns, to       any, shown in that section.
request an extension of time to file.                                              same order as the schedules or forms 
                                          If the “Yes” box is checked, the 
Generally, the cooperative must file                                               they support and attach them last. 
                                         cooperative is authorizing the IRS to 
Form 7004 by the regular due date of                                               Show the totals on the printed forms. 
                                         call the paid preparer to answer any 
the return. See the Instructions for                                               Enter the cooperative's name and EIN 
                                         questions that may arise during the 
Form 7004.                                                                         on each supporting statement or 
                                         processing of its return. The             attachment.
                                         cooperative is also authorizing the 
Who Must Sign
                                         paid preparer to:                         Tax Payments
                                         •
The return must be signed and dated       Give the IRS any information that is     Generally, the cooperative must pay 
by:                                      missing from the return;                  any tax due in full no later than the 
                                         •
• The president, vice president,          Call the IRS for information about       due date for filing its return (not 
treasurer, assistant treasurer, chief    the processing of the return or the       including extensions). If the due date 
accounting officer; or                   status of any related refund or           falls on a Saturday, Sunday, or legal 
• Any other cooperative officer (such    payment(s); and                           holiday, the payment is due on the 
                                         •
as tax officer) authorized to sign.       Respond to certain IRS notices           next day that isn't a Saturday, 
  If a return is filed on behalf of a    about math errors, offsets, and return    Sunday, or legal holiday. See the 
cooperative by a receiver, trustee, or   preparation.                              instructions for line 32.
assignee, the fiduciary must sign the     The cooperative is not authorizing       Electronic Deposit 
return, instead of the cooperative       the paid preparer to receive any 
                                                                                   Requirement
officer. Returns and forms signed by a   refund check, bind the cooperative to 
receiver or trustee in bankruptcy on     anything (including any additional tax    Cooperatives must use electronic 
behalf of a cooperative must be          liability), or otherwise represent the    funds transfer to make all federal tax 
accompanied by a copy of the order       cooperative before the IRS.               deposits (such as deposits of 
or instructions of the court authorizing                                           employment, excise, and corporate 
signing of the return or form.            The authorization will automatically     income tax). Generally, electronic 
                                         end no later than the due date            funds transfers are made using the 
Paid Preparer Use Only section.       If (excluding extensions) for filing the     Electronic Federal Tax Payment 
an employee of the cooperative           cooperative's 2023 tax return. If the     System (EFTPS). However, if the 
completes Form 1120-C, the paid          cooperative wants to expand the paid      cooperative does not want to use 
preparer section should remain blank.    preparer's authorization or revoke the    EFTPS, it can arrange for its tax 
Anyone who prepares Form 1120-C          authorization before it ends, see Pub.    professional, financial institution, 
but does not charge the cooperative      947, Practice Before the IRS and          payroll service, or other trusted third 
should not complete that section.        Power of Attorney.                        party to make deposits on its behalf. 
Generally, anyone who is paid to 
                                                                                   Also, it may arrange for its financial 
prepare the return must sign and         Assembling the Return                     institution to submit a same-day wire 
complete the section.                    To ensure that the cooperative's tax      payment (discussed below) on its 
  The paid preparer must complete        return is correctly processed, attach     behalf. EFTPS is a free service 
the required preparer information and:   all schedules and other forms after       provided by the Department of the 
• Sign the return in the space           Form 1120-C, page 5, in the following     Treasury. Services provided by a tax 
provided for the preparer's signature,   order.                                    professional, financial institution, 
• Include their Preparer Tax              1. Schedule N (Form 1120).               payroll service, or other third party 
Identification Number (PTIN), and         2. Form 4136.                            may have a fee.
• Give a copy of the return to the 
taxpayer.                                 3. Form 8978.                            To get more information about 
                                          4. Form 8941.                            EFTPS or to enroll in EFTPS, visit 
        A paid preparer may sign                                                   EFTPS.gov or call 800-555-4477. To 
TIP     original or amended returns       5. Form 3800.
                                                                                   contact EFTPS using the 
        by rubber stamp, mechanical       6. Additional schedules in               Telecommunications Relay Services 
device, or computer software             alphabetical order.                       (TRS), for people who are deaf, hard 
program.                                  7. Additional forms in numerical         of hearing, or have a speech 
                                         order.                                    disability, dial 711 and provide the 
                                          8. Supporting statements and             TRS assistant the 800-555-4477 
                                         attachments.                              number above or 800-733-4829.

Instructions for Form 1120-C                               -3-

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Depositing on time. For deposits Refund of Overpayment of Estimated to reasonable cause. See Caution,
made by EFTPS to be on time, the Tax. See the instructions for lines 30b earlier.
cooperative must submit the deposit and 30c.
Late payment of tax. Generally, a
by 8 p.m. Eastern time the day before See section 6655 for more cooperative that does not pay the tax
the date the deposit is due. If the information on how to figure estimated when due may be penalized / of 1% 1 2
cooperative uses a third party to make taxes. of the unpaid tax for each month or
deposits on its behalf, they may have part of a month the tax is not paid, up
Estimated tax penalty. A
different cutoff times. to a maximum of 25% of the unpaid
cooperative that does not make
Same-day wire payment option. If estimated tax payments when due tax. See Caution, earlier.
the cooperative fails to submit a may be subject to an underpayment Trust fund recovery penalty. This
deposit transaction on EFTPS by 8 penalty for the period of penalty may apply if certain excise,
p.m. Eastern time the day before the underpayment. Generally, a income, social security, and Medicare
date a deposit is due, it can still make cooperative is subject to the penalty if taxes that must be collected or
the deposit on time by using the its tax liability is $500 or more and it withheld are not collected or withheld,
Federal Tax Collection Service did not timely pay at least the smaller or these taxes are not paid. These
(FTCS). To use the same-day wire of: taxes are generally reported on:
payment method, the cooperative will • Its tax liability for the current year, • Form 720, Quarterly Federal Excise
need to make arrangements with its or Tax Return;
financial institution ahead of time • Its prior year's tax. • Form 941, Employer's
regarding availability, deadlines, and Use Form 2220, Underpayment of QUARTERLY Federal Tax Return;
costs. The cooperative's financial Estimated Tax by Corporations, to • Form 943, Employer's Annual
institution may charge a fee for see if the cooperative owes a penalty Federal Tax Return for Agricultural
payments made this way. To learn and to figure the amount of the Employees;
more about the information the penalty. If Form 2220 is completed, • Form 944, Employer's ANNUAL
cooperative will need to provide to its enter the penalty on line 31. See the Federal Tax Return; or
financial institution to make a instructions for line 31. • Form 945, Annual Return of
same-day wire payment, go to Withheld Federal Income Tax.
IRS.gov/SameDayWire. Interest and Penalties The trust fund recovery penalty
Estimated Tax Payments If the cooperative receives a may be imposed on all persons who
are determined by the IRS to have
Generally, the following rules apply to ! notice about penalties after it been responsible for collecting,
the cooperative's payments of CAUTION files its return, send the IRS
estimated tax. an explanation and we will determine accounting for, or paying over these
• The cooperative must make if the cooperative meets reasonable taxes, and who acted willfully in not
installment payments of estimated tax cause criteria. Do not attach an doing so. The penalty is equal to the
if it expects its total tax for the year explanation when the cooperative's unpaid trust fund tax. See the
(less applicable credits) to be $500 or return is filed. Instructions for Form 720; Pub. 15
(Circular E), Employer's Tax Guide; or
more. Pub. 51 (Circular A), Agricultural
Interest. Interest is charged on taxes
• The installments are due by the Employer's Tax Guide, for details,
paid late even if an extension of time
15th day of the 4th, 6th, 9th, and 12th including the definition of responsible
to file is granted. Interest is also
months of the tax year. If any due date persons.
charged on penalties imposed for
falls on a Saturday, Sunday, or legal
failure to file, negligence, fraud,
holiday, the payment of the Note. The trust fund recovery
substantial valuation misstatements,
installment is due on the next regular penalty will not apply to any amount of
substantial understatements of tax,
business day. trust fund taxes an employer holds
and reportable transaction
• The cooperative must use back in anticipation of the credit for
understatements from the due date
electronic funds transfer to make qualified sick and family leave wages
(including extensions) to the date of
installment payments of estimated or the employee retention credit that
payment. The interest charge is
tax. they are entitled to. See Pub. 15 and
figured at a rate determined under
• If, after the cooperative figures and Pub. 51 for more information.
section 6621.
deposits estimated tax, it finds that its
tax liability for the year will be more or Late filing of return. A cooperative Other penalties. Other penalties can
less than originally estimated, it may that does not file its tax return by the be imposed for negligence,
have to refigure its required due date, including extensions, may substantial understatement of tax,
installments. If earlier installments be penalized 5% of the unpaid tax for reportable transaction
were underpaid, the cooperative may each month or part of a month the understatements, and fraud. See
owe a penalty. See Estimated tax return is late, up to a maximum of 25% sections 6662, 6662A, and 6663.
penalty below. of the unpaid tax. The minimum
• If the cooperative overpaid penalty for a return that is over 60 Accounting Methods
estimated tax, it may be able to get a days late is the smaller of the tax due Figure taxable income using the
quick refund by filing Form 4466, or $450. The penalty will not be method of accounting regularly used
Corporation Application for Quick imposed if the cooperative can show in keeping the cooperative's books
that the failure to file on time was due and records. In all cases, the method

-4- Instructions for Form 1120-C

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used must clearly show taxable or expense from being duplicated or needed to figure the basis of the
income. Permissible methods include: omitted. See section 481(d). Also, see original or replacement property.
• Cash, the Instructions for Form 3115. The cooperative should keep
• Accrual, or If the net section 481(a) adjustment copies of all filed returns. They help in
• Any other method authorized by the is positive, report the ratable portion preparing future and amended returns
Internal Revenue Code. on Form 1120-C, line 9, as other and in the calculation of earnings and
Certain cooperatives must use an income. If the net section 481(a) profits.
accrual method of accounting. An adjustment is negative, report it on
exception applies for a small business Form 1120-C, line 23, as a deduction. Other Forms and
taxpayer (defined below). Statements That May
Accounting Period
See Pub. 538, Accounting Periods A cooperative must figure its taxable Be Required
and Methods, for more information. income on the basis of a tax year. A Reportable transaction disclosure
Small business taxpayer. For tax tax year is the annual accounting statement. Disclose information for
years beginning in 2022, a period a cooperative uses to keep its each reportable transaction in which
cooperative qualifies as a small records and report its income and the cooperative participated. Form
business taxpayer if (a) it has average expenses. Generally, cooperatives 8886, Reportable Transaction
annual gross receipts of $27 million or can use a calendar year or a fiscal Disclosure Statement, must be filed
less for the 3 prior tax years, and (b) it year. for each tax year that the federal
is not a tax shelter (as defined in Change of tax year. Generally, a income tax liability of the cooperative
section 448(d)(3)). cooperative must get the consent of is affected by its participation in the
A small business taxpayer can the IRS before changing its tax year transaction. The following are
account for inventory by (a) treating by filing Form 1128, Application to reportable transactions.
the inventory as non-incidental Adopt, Change, or Retain a Tax Year. 1. Any listed transaction, which is
materials and supplies, or (b) However, under certain conditions, a transaction that is the same as or
conforming to its treatment of exceptions may apply. See the substantially similar to one of the
inventory in an applicable financial Instructions for Form 1128 and Pub. types of transactions that the IRS has
statement (as defined in section 538 for more information. determined to be a tax avoidance
451(b)(3)). If it does not have an transaction and identified by notice,
applicable financial statement, it can Rounding Off to regulation, or other published
guidance as a listed transaction.
use the method of accounting used in Whole Dollars
its books and records prepared The cooperative may enter decimal 2. Any transaction offered under
according to its accounting points and cents when completing its conditions of confidentiality for which
procedures. return. However, the cooperative the cooperative (or a related party)
Change in accounting method. should round off cents to whole paid an advisor a fee of at least
Generally, the cooperative must get dollars on its return, forms, and $250,000.
IRS consent to change either an schedules to make completing its 3. Certain transactions for which
overall method of accounting or the return easier. The cooperative must the cooperative (or a related party)
accounting treatment of any material either round off all amounts on its has contractual protection against
item for income tax purposes. To return to whole dollars, or use cents disallowance of the tax benefits.
obtain consent, the cooperative must for all amounts. To round, drop 4. Certain transactions resulting in
generally file Form 3115, Application amounts under 50 cents and increase a loss of at least $10 million in any
for Change in Accounting Method, amounts from 50 to 99 cents to the single year or $20 million in any
during the tax year for which the next dollar. For example, $8.40 combination of years.
change is requested. See the rounds to $8 and $8.50 rounds to $9.
5. Any transaction identified by the
Instructions for Form 3115 and Pub. If two or more amounts must be IRS by notice, regulation, or other
538 for more information and added to figure the amount to enter on published guidance as a “transaction
exceptions. Also see the Instructions a line, include cents when adding the of interest.”
for Form 3115 for procedures that amounts and round off only the total.
may apply for obtaining automatic For more information, see
consent to change certain methods of Regulations section 1.6011-4. Also,
Recordkeeping
accounting, non-automatic change see the Instructions for Form 8886.
Keep the cooperative's records for as
procedures, and reduced Form 3115
long as they may be needed for the Penalties. The cooperative may
filing requirements.
administration of any provision of the have to pay a penalty if it is required to
Section 481(a) adjustment. If the Internal Revenue Code. Usually, disclose a reportable transaction
cooperative's taxable income for the records that support an item of under section 6011 and fails to
current tax year is figured under a income, deduction, or credit on the properly complete and file Form 8886.
method of accounting different from return must be kept for 3 years from Penalties may also apply under
the method used in the preceding tax the date the return is due or filed, section 6707A if the cooperative fails
year, the cooperative may have to whichever is later. Keep records that to file Form 8886 with its cooperative
make an adjustment under section verify the cooperative's basis in return, fails to provide a copy of Form
481(a) to prevent amounts of income property for as long as they are 8886 to the Office of Tax Shelter

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Analysis (OTSA), or files a form that Other forms and statements. See If the cooperative has a foreign
fails to include all the information Pub. 542, Corporations, for a list of address, include the city or town,
required (or includes incorrect other forms and statements that a state or province, country, and foreign
information). Other penalties, such as cooperative may need to file in postal code. Do not abbreviate the
an accuracy-related penalty under addition to the forms and statements country name. Follow the country's
section 6662A, may also apply. See discussed throughout these practice for entering the name of the
the Instructions for Form 8886 for instructions. state or province and postal code.
details on these and other penalties.
Item A. Identifying
Reportable transactions by materi- Specific Instructions
al advisors. Material advisors to any Information
reportable transaction must disclose Period Covered Consolidated return. Cooperatives
certain information about the filing a consolidated return must
File the 2022 return for calendar year
reportable transaction by filing Form check box 1, and attach Form 851,
2022 and fiscal years that begin in
8918 with the IRS. For details, see the Affiliations Schedule, and other
2022 and end in 2023. For a fiscal or
Instructions for Form 8918. supporting statements to the return.
short tax year return, fill in the tax year
Transfers to a cooperative control- space at the top of the form. Also, for the first year a subsidiary
led by the transferor. Every cooperative is being included in a
significant transferor (as defined in The 2022 Form 1120-C can also be consolidated return, attach Form 1122
Regulations section 1.351-3(d)(1)) used if: to the parent's consolidated return.
that receives stock of a cooperative in • The cooperative has a tax year of Attach a separate Form 1122 for each
exchange for property in a less than 12 months that begins and new subsidiary being included in the
nonrecognition event must include the ends in 2023, and consolidated return.
statement required by Regulations • The 2023 Form 1120-C is not
If the cooperative is a farmers'
section 1.351-3(a) on or with the available at the time the cooperative is
tax exempt cooperative and
transferor's tax return for the tax year required to file its return. CAUTION!
checked Item C, box 1, it
of the exchange. The transferee cannot file a consolidated return.
cooperative must include the The cooperative must show its
statement required by Regulations 2023 tax year on the 2022 Form File supporting statements for each
section 1.351-3(b) on or with its return 1120-C and take into account any tax cooperative/corporation included in
for the tax year of the exchange, law changes that are effective for tax the consolidated return. Do not use
unless all the required information is years beginning after December 31, Form 1120-C as a supporting
included in any statement(s) provided 2022. statement. On the supporting
by a significant transferor that is statement, use columns to show the
attached to the same return for the Name and Address following, both before and after
same section 351 exchange. Enter the cooperative's true name (as adjustments.
set forth in the charter or other legal
1. Items of gross income and
Dual consolidated losses. If a document creating it), address, and
deductions.
cooperative incurs a dual EIN on the appropriate lines. Enter the
consolidated loss (as defined in address of the cooperative's principal 2. A computation of taxable
Regulations section 1.1503(d)-1(b) office or place of business. Include income.
(5)), the cooperative (or consolidated the suite, room, or other unit number 3. Balance sheets as of the
group) may need to attach a domestic after the street address. If the post beginning and end of the tax year.
use agreement and/or annual office does not deliver mail to the 4. A reconciliation of income per
certification, as provided in street address and the cooperative books with income per return.
Regulations sections 1.1503(d)-6(d) has a P.O. box, show the box number
and (g). instead. 5. A reconciliation of retained
earnings.
Election to reduce basis under
section 362(e)(2)(C). If property is Note. Do not use the address of the Enter on Form 1120-C the totals for
transferred to a cooperative in registered agent for the state in which each item of income, gain, loss,
transfers subject to section 362(e)(2), the cooperative is incorporated. For expense, or deduction, net of
the transferor and the transferee example, if the cooperative is eliminating entries for intercompany
cooperative may elect, under section incorporated in Delaware or Nevada transactions between cooperatives/
362(e)(2)(C), to reduce the and the cooperative's principal office corporations within the consolidated
transferor's basis in the stock received is located in Little Rock, Arkansas, the group. Attach consolidated balance
instead of reducing the transferee cooperative should enter the Little sheets and a reconciliation of
corporation's basis in the property Rock address. consolidated retained earnings.
transferred. Once made, the election
If the cooperative receives its mail The cooperative does not
is irrevocable. For more information,
in care of a third party (such as an TIP have to provide the
see section 362(e)(2) and Regulations
accountant or an attorney), enter on information requested in (3),
section 1.362-4. If an election is
the street address line “C/O” followed (4), and (5) above if its total receipts
made, a statement must be filed in
by the third party's name and street (page 1, lines 1a plus lines 4 through
accordance with Regulations section
address or P.O. box. 9) and its total assets at the end of the
1.362-4(d)(3).

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tax year (Schedule L, line 13(d)) are Cooperatives located in the (including a change to an “in care of”
less than $250,000. See Schedule K, ! United States or U.S. address), check the “Address
Question 14. CAUTION possessions can use the change” box.
online application. Foreign • If the cooperative must change its
For more information on corporations should call originally filed return for any year, it
consolidated returns, see the 267-941-1099 (not a toll-free number) should file a new return including any
regulations under section 1502. for more information on obtaining an required attachments. Use the
Schedule M-3 (Form 1120). A EIN. See the Instructions for Form revision of the form applicable to the
cooperative with total assets SS-4. year being amended. The amended
(non-consolidated or consolidated for return must provide all the information
all cooperatives/corporations included EIN applied for, but not received. If called for by the form and instructions,
with the consolidated tax group) of the cooperative has not received its not just the new or corrected
$10 million or more on the last day of EIN by the time the return is due, information. Check the “Amended
the tax year must file Schedule M-3 enter “Applied for” and the date you return” box.
(Form 1120) instead of Form 1120-C, applied in the space for the EIN.
Schedule M-1. For more information, see the Note. If a change in address or
Cooperatives that (a) are required Instructions for Form SS-4. responsible party occurs after the
return is filed, use Form 8822-B,
to file Schedule M-3 (Form 1120) and Change of Address or Responsible
have less than $50 million total assets Item C. Type of
Party—Business, to notify the IRS of
at the end of the tax year, or (b) are Cooperative the new address. For more
not required to file Schedule M-3 information, see the instructions for
Farmers' tax exempt cooperative.
(Form 1120) and voluntarily file Form 8822-B.
Check the “Farmers' tax exempt
Schedule M-3 (Form 1120), must
cooperative” box if the cooperative
either (i) complete Schedule M-3
applied for and received status as a
(Form 1120) entirely, or (ii) complete Income
tax exempt farmers', fruit growers', or
Schedule M-3 (Form 1120) through Except as otherwise provided in the
like association, organized and
Part I, and complete Form 1120-C, Internal Revenue Code, gross income
operated on a cooperative basis, as
Schedule M-1, instead of completing includes all income from whatever
described in section 521.
Parts II and III of Schedule M-3 (Form source derived.
1120). If the cooperative chooses to If the cooperative has submitted
complete Schedule M-1 instead of Form 1028, Application for Exception for income from qualify-
completing Parts II and III of Recognition of Exemption, but has not ing shipping activities. Gross
Schedule M-3, the amount on received a determination letter from income does not include income from
Schedule M-1, line 1, must equal the the IRS, enter “Application Pending” qualifying shipping activities if the
amount on Schedule M-3, Part I, on Form 1120-C at the top of page 1. cooperative makes an election under
section 1354 to be taxed on its
line 11. See the Instructions for Nonexempt cooperative. All other notional shipping income (as defined
Schedule M-3 for more details. Also, subchapter T cooperatives including in section 1353) at the highest
see the instructions for Schedule M-1, farmers' cooperatives without section corporate rate. If the election is made,
later. 521 exempt status, organized and the cooperative may generally not
If you are filing Schedule M-3, operated as described under Who claim any loss, deduction, or credit
check Item A, box 2, to indicate that Must File, earlier, should check the with respect to qualifying shipping
Schedule M-3 is attached. “Nonexempt cooperative” box. activities. A cooperative making this
Form 1120 filed previous year. election may also elect to defer gain
Item D. Initial Return, Final
Check box 3 if the cooperative filed on the disposition of a qualifying
Form 1120 in a prior year as a Return, Name Change, vessel.
subchapter T cooperative. Address Change, or Use Form 8902, Alternative Tax on
Amended Return Qualifying Shipping Activities, to
Item B. Employer • If this is the cooperative's first figure the tax. Include the alternative
Identification Number return, check the “Initial return” box. tax on Schedule J, line 8.
(EIN) • If this is the cooperative's final Line 1. Gross Receipts or Sales
Enter the cooperative's EIN. If the return and it will no longer exist, file
Enter gross receipts or sales from all
cooperative does not have an EIN, it Form 1120-C and check the “Final
business operations except those that
must apply for one. An EIN can be return” box.
must be reported on lines 4
applied for: • If the cooperative changed its name
through 9. Special rules apply to
• Online. Go to IRS.gov/EIN. The EIN since it last filed a return, check the
certain income, as discussed below.
is issued immediately once the “Name change” box. Generally, a
application information is validated. cooperative must also have amended Advance payments. In general,
• By faxing or mailing Form SS-4, its articles of incorporation and filed advance payments are reported in the
Application for Employer Identification the amendment with the state in which year of receipt. For exceptions to this
Number. it was incorporated. general rule for cooperatives that use
• If the cooperative has changed its the accrual method of accounting, see
address since it last filed a return the following:

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• To report income from long-term on their experience, will not be corporate bonds, tax refunds, etc. Do
contracts, see section 460. collected if: not offset interest expense against
• For rules that allow a limited • The services are in the fields of interest income. Special rules apply to
deferral of advance payments beyond health, law, engineering, architecture, interest income from certain
the current tax year, see section accounting, actuarial science, below-market-rate loans. See section
451(c). Also, see Regulations performing arts, or consulting; or 7872 for details.
sections 1.451-8(c), (d), and (e). For • The cooperative meets the section
applicability dates, see Regulations 448(c) gross receipts test for all prior Note. Report tax-exempt interest
section 1.451-8(h). years. income on Schedule K, Item 10. Also,
if required, include the same amount
• For information on adopting or This provision does not apply to
on Schedule M-1, line 7, or
changing to a permissible method for any amount if interest is required to be
Schedule M-3 (Form 1120), Part II,
reporting certain advance payments paid on the amount or if there is any
line 13, if applicable.
for services and certain goods by an penalty for failure to timely pay the
accrual method cooperative, see the amount. See Regulations section Line 6. Gross Rents and
Instructions for Form 3115. 1.448-3 for more information on the Royalties
Installment sales. Generally, the nonaccrual experience method,
Enter the gross amount received from
installment method cannot be used for including information on safe harbor
the rental of property and royalties.
dealer dispositions of property. A methods.
Deduct expenses such as repairs,
“dealer disposition” is any disposition For information on a book safe interest, taxes, and depreciation on
of (a) personal property by a person harbor method of accounting for the applicable lines.
who regularly sells or otherwise cooperatives that use the nonaccrual
disposes of personal property of the experience method of accounting, see Line 9. Other Income
same type on the installment plan, or Rev. Proc. 2011-46, 2011-42 I.R.B. Enter any other taxable income not
(b) real property held for sale to 518, available at IRS.gov/irb/ reported on lines 1 through 8. List the
customers in the ordinary course of 2011-42_IRB#RP-2011-46, or any type and amount of income on an
the taxpayer's trade or business. successor. Also, see the Instructions attached statement. If the cooperative
The restrictions on using the for Form 3115 for procedures to has only one item of other income,
installment method do not apply to the obtain automatic consent to change to describe it in parentheses on line 9.
following. this method or make certain changes Patronage dividends and per-unit
• Dispositions of property used or within this method.
retain allocations. Include on line 9
produced in the trade or business of Cooperatives that qualify to use the the patronage dividends and per-unit
farming. nonaccrual experience method should retain allocations listed below. Attach
• Certain dispositions of timeshares attach a statement showing total a statement listing the name of each
and residential lots reported under the gross receipts, the amount not declaring association from which the
installment method for which the accrued as a result of the application cooperative received income from
cooperative elects to pay interest of section 448(d)(5), and the net patronage dividends and per-unit
under section 453(l)(3). amount accrued. Enter the net retain allocations, and the total
Enter on line 1a (and carry to line 3) amount on line 1a. amount received from each
the gross profit on collections from Line 2. Cost of Goods Sold association.
installment sales. Attach a statement Include the items listed below.
showing the following information for Complete and attach Form 1125-A,
the current and the 3 preceding years: Cost of Goods Sold, if applicable. 1. Patronage dividends received
(a) gross sales, (b) cost of goods sold, Enter on Form 1120-C, line 2, the in:
(c) gross profits, (d) percentage of amount from Form 1125-A, line 8. See • Money,
gross profits to gross sales, (e) Form 1125-A and its instructions. • Qualified written notices of
allocation, or
amount collected, and (f) gross profit Line 4. Dividends and • Other property (except nonqualified
on the amount collected. Inclusions written notices of allocation).
For sales of timeshares and See the instructions for Schedule C, 2. Nonpatronage distributions
residential lots reported under the later. Complete Schedule C and enter received on a patronage basis from
installment method, if the cooperative on line 4 the amount from Schedule C, tax-exempt farmers' cooperatives in:
elects to pay interest under section line 23. • Money;
453(l)(3), the cooperative's income
• Qualified written notices of
tax is increased by the interest Note. Do not report patronage allocation; or
payable under section 453(l)(3). dividends received on Schedule C. Other property (except nonqualified
•
Report this addition to tax on Report income from patronage written notices of allocation), based
Schedule J, line 8. dividends and per-unit retain on earnings of that cooperative either
Nonaccrual experience method for allocations on line 9. from business done with or for the
service providers. Cooperatives are Line 5. Interest United States or any of its agencies
not required to accrue certain Enter taxable interest on U.S. (or from sources other than
amounts to be received from the obligations and on loans, notes, patronage, such as investment
performance of services that, based mortgages, bonds, bank deposits, income).

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3. Qualified written notices of identify the amount from each Note. A credit is available only if the
allocation at their stated dollar partnership. leave was taken after March 31, 2020,
amounts and property at its fair • The transferred loss amount and before October 1, 2021, and only
market value (FMV). identified as "Section 91 Transferred after the qualified leave wages were
4. Amounts received on the Loss Amount," which is required to be paid, which might under certain
redemption, sale, or other disposition recognized when substantially all the circumstances not occur until a
of nonqualified written notices of assets of a foreign branch are quarter after September 30, 2021,
allocation. transferred to a specified 10%-owned including quarters in 2022.
foreign corporation (as defined in
Generally, patronage dividends
section 245A(b)) with respect to which Deductions
from purchases of capital assets or
the corporation was a U.S.
depreciable property are not Limitations on Deductions
shareholder immediately after the
includible in income but must be used
transfer. See section 91.
to reduce the basis of the assets. See Section 263A uniform capitaliza-
• The ratable portion of any net
section 1385(b) and the related tion rules. The uniform capitalization
positive section 481(a) adjustment.
regulations. rules of section 263A generally
See Section 481(a) adjustment, require cooperatives to capitalize, or
5. Amounts received (or the stated earlier. include in inventory, certain costs.
dollar value of qualified per-unit retain • Part or all of the proceeds received Cooperatives subject to the section
certificates received) from the sale or from certain cooperative-owned life 263A uniform capitalization rules are
redemption of nonqualified per-unit insurance contracts issued after required to capitalize:
retain certificates. August 17, 2006. See section 101(j)
6. Per-unit retain allocations for details. Form 8925, Report of 1. Direct costs of assets produced
received (except nonqualified per-unit Employer-Owned Life Insurance or acquired for resale, and
retain certificates). See section 1385. Contracts, may also be required. See 2. Certain indirect costs (including
Form 8925 and its instructions. taxes) that are properly allocable to
Note. Payments from the Commodity • Income from cancellation of debt property produced or acquired for
Credit Corporation to a farmers' (COD) for the repurchase of a debt resale.
cooperative for certain expenses of instrument for less than its adjusted
The costs required to be
the co-op's farmers-producers under issue price.
capitalized under section 263A are
•
a “reseal” program of the U.S. The cooperative's share of the not deductible until the property (to
Department of Agriculture are following income from Form 8621, which the costs relate) is sold, used,
patronage-source income that may Information Return by a Shareholder or otherwise disposed of by the
give rise to patronage dividends under of a Passive Foreign Investment cooperative. The cooperative
section 1382(b)(1). Company or Qualified Electing Fund. recovers these costs through
Other. Examples of other income to 1. Ordinary earnings of a qualified depreciation, amortization, or costs of
report on line 9 include the following. electing fund (QEF). goods sold.
• Recoveries of bad debts deducted A small business taxpayer (defined
2. Gain or loss from marking
in prior years under the specific earlier) is not required to capitalize
passive foreign investment company
charge-off method. costs under section 263A. A small
(PFIC) stock to market.
• The amount included in income business taxpayer that wants to
from Form 6478, Biofuel Producer 3. Gain or loss from sale or other
Credit. disposition of section 1296 stock. discontinue capitalizing costs under
section 263A must change its method
• The amount included in income 4. Excess distributions from a of accounting. See section 263A(i),
from Form 8864, Biodiesel, section 1291 fund allocated to the Regulation section 1.263A-1(j), and
Renewable Diesel, or Sustainable current year and pre-PFIC years, if the Instructions for Form 3115.
Aviation Fuels Credit. any.
• Refunds of taxes deducted in prior For more information on the
See Form 8621 and the
years to the extent they reduced the uniform capitalization rules, see Pub.
amount of tax imposed. See section Instructions for Form 8621 for details. 538. Also, see Regulations sections
111 and the related regulations. Do • The amount of payroll tax credit 1.263A-1 through 1.263A-3. For more
not offset current-year taxes against taken by an employer on its 2022 information on non-small business
employment tax returns (Forms 941,
any tax refunds. taxpayers, see Regulations section
943, and 944) for qualified paid sick
• Ordinary income from trade or 1.263A-4 . For rules for property
and qualified paid family leave under
business activities of a partnership produced in a farming business, see
(from Schedule K-1 (Form 1065)). Do FFCRA and ARP (both the Pub. 225.
nonrefundable and refundable
not offset ordinary losses against Transactions between related tax-
ordinary income. Instead, include the portions). The cooperative must
include the full amount of the credit for payers. Generally, an accrual basis
losses on line 23. Show the taxpayer can only deduct business
partnership's name, address, and EIN qualified sick and family leave wages
in gross income for the tax year that expenses and interest owed to a
on a separate statement attached to related party in the year payment is
this return. If the amount entered is includes the last day of any calendar
quarter in which the credit is allowed. included in the income of the related
from more than one partnership, party. See sections 163(e)(3), 163(j),
and 267(a)(2) for the limitations on

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deductions for unpaid interest and in which the active trade or business cooperative claims certain credits, it
expenses. begins. may need to reduce the otherwise
allowable deductions for expenses
Limitations on business interest Note. The election to either amortize used to figure the credit. This applies
expense. Business interest expense or capitalize start-up costs is to credits such as the following.
may be limited. See section 163(j) and irrevocable and applies to all start-up • Work opportunity credit (Form
Form 8990. Also, see Limitation on costs that are related to the trade or 5884).
deduction in the instructions for business. • Credit for increasing research
line 16 and Schedule K, Questions 17
and 18, later. Report the deductible amount of activities (Form 6765).
start-up and organizational costs and • Orphan drug credit (Form 8820).
Section 291 limitations. any amortization on line 23. For • Disabled access credit
Cooperatives may be required to amortization that begins during the (Form 8826).
adjust deductions for depletion of iron current tax year, complete and attach • Empowerment zone employment
ore and coal, intangible drilling, Form 4562, Depreciation and credit (Form 8844).
exploration and development costs, Amortization. • Indian employment credit (Form
and the amortizable basis of pollution 8845).
control facilities. See section 291 to Passive activity limitations.
determine the amount of the Limitations on passive activity losses • Credit for employer social security
and Medicare taxes paid on certain
adjustment, later. and credits under section 469 apply to
employee tips (Form 8846).
closely held cooperatives (defined
Election to deduct business later). • Credit for small employer pension
start-up and organizational costs. plan start-up costs (Form 8881).
Generally, the two kinds of passive • Credit for employer-provided
A cooperative can elect to deduct a activities are: childcare facilities and services
limited amount of start-up and
• Trade or business activities in
organizational costs it paid or (Form 8882).
which the cooperative did not
incurred. Any remaining costs must • Low sulfur diesel fuel production
materially participate for the tax year,
generally be amortized over a credit (Form 8896).
and
180-month period. See sections 195 • Mine rescue team training credit
• Rental activities, regardless of its
and 248 and the related regulations. (Form 8923).
participation. • Credit for employer differential
Time for making an election. Cooperatives subject to the wage payments (Form 8932).
The cooperative generally elects to passive activity limitations must • Credit for small employer health
deduct start-up or organizational costs complete Form 8810 to compute their insurance premiums (Form 8941).
by claiming the deduction on its allowable passive activity loss and • Employer credit for paid family and
income tax return filed by the due date credit. Before completing Form 8810, medical leave (Form 8994).
(including extensions) for the tax year see Temporary Regulations section If the cooperative has any of the
in which the active trade or business 1.163-8T, which provides rules for credits listed above, figure the current
begins. For more details, including allocating interest expense among year credit before figuring the
special rules for costs paid or incurred activities. If a passive activity is also deduction for expenses on which the
before September 9, 2008, see the subject to the at-risk rules of section credit is based. If the cooperative
Instructions for Form 4562. Also, see 465, or the tax-exempt use loss rules capitalized any costs on which it
Pub. 535, Business Expenses. of section 470, those rules apply figured the credit, it may need to
If the cooperative timely filed its before the passive loss rules. reduce the amount capitalized by the
return for the year without making an For more information, see section credit attributable to these costs.
election, it can still make an election 469, the related regulations, and Pub. See the instructions for the form
by filing an amended return within 6 925, Passive Activity and At-Risk used to figure the applicable credit for
months of the due date of the return Rules. more details.
(excluding extensions). Clearly
indicate the election on the amended Closely held cooperatives. A Limitations on deductions related
return and write “Filed pursuant to cooperative is “closely held” (as to property leased to tax-exempt
section 301.9100-2” at the top of the defined in section 469(j)(1)) if at any entities. If a cooperative leases
amended return. File the amended time during the last half of the tax year property to a governmental or other
return at the same address the more than 50% in value of its tax-exempt entity, the cooperative
cooperative filed its original return. outstanding stock is owned, directly or cannot claim deductions related to the
The election applies when figuring indirectly, by or for not more than five property to the extent that they
taxable income for the current tax year individuals. exceed the cooperative's income from
and all subsequent years. Certain organizations are treated the lease payments. This disallowed
The cooperative can choose to as individuals for purposes of this test. tax-exempt use loss can be carried
forgo the elections above by See section 542(a)(2). For rules for over to the next tax year and treated
affirmatively electing to capitalize its determining stock ownership, see as a deduction with respect to the
start-up or organizational costs on its section 544 (as modified by section property for that tax year. See section
income tax return filed by the due date 465(a)(3)). 470(d) for exceptions.
(including extensions) for the tax year Reducing certain expenses for
which credits are allowable. If the

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Line 11. Compensation of the deduction for vehicle lease • Taxes assessed against local
Officers expense may have to be reduced by benefits that increase the value of the
an amount includible in income called property assessed (such as for
Enter deductible officers'
the inclusion amount. The cooperative paving, etc.).
compensation on line 11. Do not
include compensation deductible • Taxes deducted elsewhere on the
may have an inclusion amount if:
return, such as those reflected in cost
elsewhere on the return, such as And the of goods sold.
amounts included in cost of goods vehicle's FMV
sold, elective contributions to a on the first day See section 164(d) for the rule on
section 401(k) cash or deferred of the lease apportionment of taxes on real
arrangement, or amounts contributed The lease term began: exceeded: property between the seller and
under a salary reduction SEP Cars (excluding Trucks purchaser.
agreement or a SIMPLE IRA plan. and Vans)
Do not reduce the
If the cooperative's total receipts After 12/31/21 but before ! cooperative’s deduction for
1/1/23 . . . . . . . . . . . . $56,000
(line 1a plus lines 4 through 9) are CAUTION social security and Medicare
$500,000 or more, complete Form After 12/31/20 but before taxes by the nonrefundable and
1/1/22 . . . . . . . . . . . . $51,000
1125-E, Compensation of Officers. On refundable portions of the FFCRA and
Form 1120-C, enter on line 11 the After 12/31/17 but before ARP credits for qualified sick and
1/1/21 . . . . . . . . . . . . $50,000
amount from Form 1125-E, line 4. family leave wages claimed on its
After 12/31/12 but before employment tax returns. Instead,
Line 12. Salaries and Wages 1/1/18 . . . . . . . . . . . . $19,000
report this amount as income on
Enter the total salaries and wages After 12/31/07 but before line 9.
paid for the tax year. Do not include 1/1/13 . . . . . . . . . . . . $18,500
salaries and wages deductible Trucks and Vans Line 16. Interest
elsewhere on the return, such as After 12/31/21 but before
amounts included in officers' 1/1/23 . . . . . . . . . . . . $56,000 Note. Do not offset interest income
compensation, cost of goods sold, After 12/31/20 but before against interest expense.
elective contributions to a section 1/1/22 . . . . . . . . . . . . $51,000 The cooperative must make an
401(k) cash or deferred arrangement, After 12/31/17 but before interest allocation if the proceeds of a
or amounts contributed under a salary 1/1/21 . . . . . . . . . . . . $50,000 loan were used for more than one
reduction SEP agreement or a After 12/31/13 but before purpose (for example, to purchase a
SIMPLE IRA plan. 1/1/18 . . . . . . . . . . . . $19,500
portfolio investment and to acquire an
After 12/31/09 but before interest in a passive activity). See
If the cooperative provided taxable 1/1/14 . . . . . . . . . . . . $19,000
Temporary Regulations section
fringe benefits to its employees, such After 12/31/08 but before 1.163-8T for the interest allocation
as personal use of a car, do not 1/1/10 . . . . . . . . . . . . $18,500
rules.
deduct as wages the amount After 12/31/07 but before
allocated for depreciation and other 1/1/09 . . . . . . . . . . . . $19,000 Do not deduct the following
expenses claimed on lines 18 and 23. interest.
If the cooperative claims a • Interest on indebtedness incurred
! credit for any wages paid or See Pub. 463, Travel, Gift, and Car or continued to purchase or carry
CAUTION incurred, it may need to Expenses, for instructions on figuring obligations if the interest is wholly
reduce any corresponding deduction the inclusion amount. The inclusion exempt from income tax. For
for officers' compensation and amount for lease terms beginning in exceptions, see section 265(b).
salaries and wages. See Reducing 2023 will be published in the Internal • For cash basis taxpayers, prepaid
certain expenses for which credits are Revenue Bulletin in early 2023. interest allocable to years following
allowable, earlier. the current tax year. For example, a
Line 15. Taxes and Licenses cash basis calendar year taxpayer
Line 13. Bad Debts Enter taxes paid or accrued during the who in 2022 prepaid interest allocable
Enter the total debts that became tax year, but do not include the to any period after 2022 can deduct
worthless in whole or in part during following. only the amount allocable to 2022.
the tax year. A cooperative that uses • Federal income taxes. • Interest and carrying charges on
the cash method of accounting cannot • Foreign or U.S. possession income straddles. Generally, these amounts
claim a bad debt deduction unless the taxes if a foreign tax credit is claimed. must be capitalized. See section
amount was previously included in • Taxes not imposed on the 263(g).
income. cooperative. • Interest on debt allocable to the
• Taxes, including state or local sales production of designated property by
Line 14. Rents taxes, that are paid or incurred in a cooperative for its own use or for
If the cooperative rented or leased a connection with an acquisition or sale. The cooperative must capitalize
vehicle, enter the total annual rent or disposition of property (these taxes this interest. Also, capitalize any
lease expense paid or incurred during must be treated as part of the cost of interest on debt allocable to an asset
the year. Also, complete Form 4562, the acquired property, or in the case used to produce the property. See
Part V. If the cooperative leased a of a disposition, as a reduction in the section 263A(f) and Regulations
vehicle for a term of 30 days or more, amount realized on the disposition).

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sections 1.263A-8 through 1.263A-15 Cooperatives reporting taxable without regard to the general 10%
for definitions and more information. income on the accrual method can limit. This applies to:
• Interest paid or incurred on any elect to treat as paid during the tax • A qualified farmer or rancher (as
portion of an underpayment of tax that year any contributions paid by the due defined in section 170(b)(1)(E)(v))
is attributable to an understatement date for filing the cooperative’s return that does not have publicly traded
arising from an undisclosed listed (not including extensions), if the stock; and
transaction or an undisclosed contributions were authorized by the • A Native Corporation (as defined in
reportable avoidance transaction board of directors during the tax year. section 170(b)(2)(C)(iii)) that
(other than a listed transaction) Attach a declaration to the return contributes property which was land
entered into in tax years beginning stating that the resolution authorizing conveyed under the Alaska Native
after October 22, 2004. the contributions was adopted by the Claims Settlement Act.
board of directors during the tax year.
Special rules apply to: The total amount of the contribution
The declaration must include the date
• Forgone interest on certain claimed for the qualified conservation
the resolution was adopted.
below-market-rate loans (see section property cannot exceed 100% of the
7872). Limitation on deduction. Generally, excess of the cooperative's taxable
• Original issue discount (OID) on the total amount claimed cannot be income (as computed above
certain high yield discount obligations. more than 10% of taxable income substituting “100%” for “10%”) over all
See section 163(e)(5) to determine (line 27) computed without regard to other allowable charitable
the amount of the deduction for OID the following. contributions. Any excess qualified
that is deferred and the amount that is • Any deduction for contributions. conservation contributions can be
disallowed on a high yield discount • The special deductions on line 26b. carried over to the next 15 years,
obligation. The rules under section • The limitation under section 249 on subject to the 100% limitation. See
163(e)(5) do not apply to certain high the deduction for bond premium. section 170(b)(2)(B) and (C).
yield discount obligations issued after • Any net operating loss (NOL) Cash contributions. For
August 31, 2008, and before January carryback to the tax year under contributions of cash, check, or other
1, 2011. See section 163(e)(5)(F). section 172. monetary gifts (regardless of the
• Interest allocable to unborrowed • Any capital loss carryback to the tax amount), the cooperative must
policy cash values of life insurance, year under section 1212(a)(1). maintain a bank record, or a receipt,
endowment, or annuity contracts • Any deduction for income letter, or other written communication
issued after June 8, 1997. See section attributable to domestic production from the donee organization indicating
264(f). Attach a statement showing activities of specified agricultural or the name of the organization, the date
the computation of the deduction. horticultural cooperatives under of the contribution, and the amount of
section 199A(g).
Limitation on deduction. Under the contribution.
section 163(j), business interest Carryover. Charitable contributions Contributions of $250 or more. A
expense is generally limited to the over the 10% limitation cannot be cooperative can deduct a contribution
sum of business interest income, 30% deducted for the tax year but can be of $250 or more only if it gets a written
of the adjusted taxable income, and carried over to the next 5 tax years. acknowledgment from the donee
floor plan financing interest. The See the exception below for farmers organization that shows the amount of
amount of any business interest and ranchers and certain Native cash contributed, describes any
expense that is not allowed as a Corporations. property contributed (but not its
deduction for the tax year is carried Special rules apply if the value), and either gives a description
forward to the following year. If cooperative has an NOL carryover to and a good faith estimate of the value
section 163(j) applies, use Form 8990 the tax year. In figuring the charitable of any goods or services provided in
to figure the amount of business contributions deduction for the current return for the contribution or states
interest expense the corporation can tax year, the 10% limit is applied using that no goods or services were
deduct for the current tax year and the the taxable income after taking into provided in return for the contribution.
amount that can be carried forward to account any deduction for the NOL. The acknowledgment must be
the next year. See the Instructions for obtained by the due date (including
To figure the amount of any
Form 8990. Also, see Schedule K, extensions) of the cooperative's
remaining NOL carryover to later
Question 17 and 18, later. years, taxable income must be return, or, if earlier, the date the return
Line 17. Charitable modified (see section 172(b)). To the is filed. Do not attach the
Contributions extent that contributions are used to acknowledgment to the tax return, but
reduce taxable income for this keep it with the cooperative's records.
Enter contributions or gifts actually
purpose and increase an NOL
paid within the tax year to or for the Contributions of property other
carryover, a contributions carryover is
use of charitable and governmental than cash. If a cooperative
not allowed. See section 170(d)(2)(B).
organizations described in section contributes property other than cash
170(c) and any unused contributions Suspension of 10% limitation for and claims over a $500 deduction for
carried over from prior years. Special farmers and ranchers and certain the property, it must attach a
rules and limits apply to contributions Native Corporations. Certain statement to the return describing the
to organizations conducting lobbying cooperatives can deduct contributions kind of property contributed and the
activities. See section 170(f)(9). of qualified conservation property method used to determine its fair
market value (FMV). Complete and

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attach Form 8283, Noncash Form 5500-SF. Short Form Annual cooperatives are considered
Charitable Contributions, for Return/Report of Small Employee “nonexempt.” Special rules apply to
contributions of property (other than Benefit Plan. File this form instead of specified cooperatives with both
money) if the total claimed deduction Form 5500, generally if there were patronage and nonpatronage income
for all property contributed was more under 100 participants at the and losses.
than $5,000. Special rules apply to the beginning of the plan year. If you are a A specified cooperative's section
contribution of certain property. See small plan (generally under 100 199A(g) deduction generally equals
the Instructions for Form 8283. participants at the beginning of the 9% of the lesser of:
Qualified conservation plan year), you may be eligible to file 1. Qualified production activity
contributions. Special rules apply to the Form 5500-SF instead of the Form income (QPAI), or
qualified conservation contributions, 5500. For more information, see the
including contributions of certain instructions to the Form 5500-SF. 2. Taxable income.
easements on buildings located in a Instructions and more information can
Note. QPAI and taxable income are
registered historic district. See section be found at the Department of Labor
computed without regard to any
170(h) and Pub. 526, Charitable website at www.EFAST.dol.gov.
deductions for patronage dividends,
Contributions. per-unit retain allocations, or
Note. Form 5500 and Form 5500-SF
Other special rules. The must be filed electronically under the nonpatronage distributions under
cooperative must reduce its deduction computerized ERISA Filing section 1382(b) or (c).
for contributions of certain capital gain Acceptance System (EFAST2). For A specified cooperative with
property. See sections 170(e)(1) and more information, see the EFAST2 oil-related QPAI must also reduce the
170(e)(5). website at www.EFAST.dol.gov. deduction by 3% of the least of the
For more information on charitable Form 5500-EZ. Annual Return of A following amounts.
contributions, including substantiation One-Participant (Owners/Partners • Oil-related QPAI.
and recordkeeping requirements, see and Their Spouses) Retirement Plan • QPAI.
section 170 and the related or A Foreign Plan. File this form for a • Taxable income figured without the
regulations, and Pub. 526. For special plan that only covers the owner (or the deduction.
rules that apply to corporations, see owner and spouse) or a foreign plan The deduction shall not exceed
Pub. 542. that is required to file an annual return 50% of the Form W-2 wages allocable
Line 18. Depreciation and does not file the annual return to domestic production gross receipts
electronically on Form 5500-SF. See (DPGR) of the specified cooperative
Include on line 18 depreciation and the Instructions for Form 5500-EZ. for the tax year.
the cost of certain property that the
cooperative elected to expense under Line 21. Employee Benefit Reporting the deduction. Specified
section 179 from Form 4562. Include Programs cooperatives may use Form 8903,
amounts not claimed on Form 1125-A Enter contributions to employee Domestic Production Activities
or elsewhere on the return. See Form benefit programs not claimed Deduction, to compute the section
4562 and the Instructions for Form elsewhere on the return (for example, 199A(g) deduction. Write “Specified
4562. insurance or health and welfare Cooperative Section 199A(g)
Line 20. Pension, programs) that are not an incidental deduction” across the top of Form
Profit-Sharing, etc., Plans part of a pension, profit-sharing, etc., 8903. Form 8903 must be attached to
plan included on line 20. the cooperative's return. See the
Enter the deduction for contributions Instructions for Form 8903.
to qualified pension, profit-sharing, or Line 22. Section 199A(g) Alternatively, specified cooperatives
other funded deferred compensation Deduction may create and attach a schedule
plans. Generally, employers who similar to Form 8903 to compute the
maintain such a plan must file one of This deduction applies only to section 199A(g) deduction.
the forms listed below unless exempt ! specified agricultural and
from filing under regulations or other CAUTION horticultural cooperatives Note. For tax years beginning after
applicable guidance, even if the plan (specified cooperatives). January 19, 2021, a specified
cooperative should apply the final
is not a qualified plan under the Specified agricultural or
regulations under section 199A(g)
Internal Revenue Code. The filing horticultural cooperatives (specified
(T.D. 9947) published January 19,
requirement applies even if the cooperatives) to which Part I of
2021. However, a specified
cooperative does not claim a subchapter T applies may qualify for a
cooperative may choose to apply the
deduction for the current tax year. deduction under section 199A(g). A
final rules to tax years beginning on or
There are penalties for failure to file specified cooperative is a cooperative
before January 19, 2021, provided the
these forms timely and for overstating that markets or is engaged in the
cooperative follows the rules in their
the pension plan deduction. See manufacturing, production, growth or
entirety and in a consistent manner.
sections 6652(e) and 6662(f). Also, extraction of agricultural or
Alternatively, the cooperative may rely
see the instructions for the applicable horticultural products. Specified
on the proposed regulations
form. cooperatives that qualify under
(REG-118425-18), published June 19,
Form 5500. Annual Return/Report of section 521 are considered “exempt”
2019, for tax years beginning on or
Employee Benefit Plan. cooperatives. All other specified
before January 19, 2021, provided the

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cooperative follows the proposed ordinary losses. Instead, include the such as labor and supplies, that are
rules in their entirety and in a income on line 9. Show the not payments to produce or improve
consistent manner. For purposes of partnership's name, address, and EIN tangible or real property. See
the W-2 Wage Limitation, also see on a separate statement attached to Regulations section 1.263(a)-1. For
Rev. Proc. 2021-11, 2021-6 I.R.B. this return. If the amount entered is example, amounts are paid for
833, available at IRS.gov/irb/ from more than one partnership, improvements if they are for
2021-6_IRB#REV-PROC-2021-11. identify the amount from each betterments to the property,
partnership. restorations of the property (such as
Line 23. Other Deductions Any extraterritorial income the replacements of major
•
Attach a statement, listing by type and exclusion (from Form 8873). components or substantial structural
amount, all allowable deductions that • Any net negative section 481(a) parts), or if they adapt the property to
are not deductible elsewhere on Form adjustment. See the instructions for a new or different use. Amounts paid
1120-C. Enter the total on line 9. to produce or improve property must
line 23. • Dividends paid in cash on stock be capitalized. See Regulations
See Pub. 535 for details on other held by an employee stock ownership sections 1.263(a)-2 and (a)-3.
deductions that may apply to plan. The cooperative can deduct repair
cooperatives. However, a deduction can only be and maintenance expenses only to
taken for the dividends above if, the extent they relate to a trade or
Examples of other deductions according to the plan, the dividends business activity. See Regulations
include the following. are: section 1.162-4. The cooperative may
• Amortization. See Form 4562, Part elect to capitalize certain repair and
VI. 1. Paid in cash directly to the plan
• Any applicable deduction under participants or beneficiaries; maintenance costs consistent with its
books and records. See Regulations
section 179D for costs of energy 2. Paid to the plan, which
section 1.263(a)-3(n) for information
efficient commercial building property distributes them in cash to the plan
on how to make the election.
placed in service during the tax year. participants or their beneficiaries no
Complete and attach new Form 7205, later than 90 days after the end of the Travel, meals, and entertainment.
if applicable. plan year in which the dividends are Subject to limitations and restrictions
• Certain business start-up and paid; discussed below, a cooperative can
organizational costs (discussed 3. At the election of such deduct ordinary and necessary travel,
earlier under Election to deduct participants or their beneficiaries (a) meals, and nonentertainment
business start-up and organizational payable as provided under (1) or (2) expenses paid or incurred in its trade
costs). above, or (b) paid to the plan and or business. Generally, entertainment
• Reforestation costs. The reinvested in qualifying employer expenses, membership dues, and
cooperative can elect to deduct up to securities; or facilities used in connection with these
$10,000 of qualifying reforestation activities cannot be deducted.
4. Used to make payments on a
expenses for each qualified timber Generally, no deduction is allowed for
loan described in section 404(a)(9).
property. The cooperative can elect to qualified transportation fringe
amortize over 84 months any amount See section 404(k) for more details benefits. Also, special rules apply to
not deducted. See Pub. 535. and the limitation on certain deductions for gifts and convention
• Depletion. See sections 613 and dividends. expenses. See section 274, Pub. 463,
613A for percentage depletion rates and Pub. 535 for details.
Do not deduct the following.
applicable to natural deposits. Also, Travel. The cooperative cannot
see section 291 for the limitation on • Amounts paid or incurred to, or at
the direction of, a government or deduct travel expenses of any
the depletion deduction for iron ore individual accompanying a
governmental entity for the violation,
and coal (including lignite). Attach cooperative officer or employee,
or investigation or inquiry into the
Form T (Timber), Forest Activities including a spouse or dependent of
potential violation, of a law. See
Schedule, if a deduction for depletion the officer or employee, unless:
of timber is taken. See Pub. 535 for section 162(f) for more information
and exceptions. • That individual is an employee of
more information on depletion. the cooperative, and
• Insurance premiums. • Any amount that is allocable to a
class of exempt income. See section • That individual’s travel is for a bona
• Legal and professional fees. fide business purpose and would
265(b) for exceptions.
• Repairs and maintenance otherwise be deductible by that
(discussed later). • Lobbying expenses. However, see
exceptions (discussed later). individual.
• Supplies used and consumed in the
business. • Amounts paid or incurred for any Meals. Generally, the cooperative
settlement, payout, or attorney fees
• Travel, meals, and entertainment can deduct only 50% of the amount
related to sexual harassment or
expenses. Special rules apply otherwise allowable for
sexual abuse, if such payments are
(discussed later). nonentertainment related meal
subject to a nondisclosure agreement.
• Utilities. expenses paid or incurred in its trade
See section 162(q).
• Ordinary losses from trade or or business. However, the
business activities of a partnership Repairs and maintenance. Enter cooperative can deduct 100% of
(from Schedule K-1 (Form 1065)). Do the cost of repairs and maintenance business meal expenses if the meals
not offset ordinary income against not claimed elsewhere on the return, are food and beverages provided by a

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restaurant. This applies only to entertainment, amusement, or • Holding real property placed in
amounts paid or incurred after recreation. service by the cooperative before
December 31, 2020, and before 1987;
Amounts treated as
January 1, 2023. • Equipment leasing under sections
compensation. Generally, the
465(c)(4), (5), and (6); or
Meals not separately stated from cooperative may be able to deduct
• Any qualifying business of a
entertainment are generally not otherwise nondeductible
qualified cooperative under section
deductible. In addition (subject to entertainment, amusement, or
465(c)(7).
exceptions under section 274(k)(2)): recreation expenses if the amounts
• Meals must not be lavish or are treated as compensation to the However, the at-risk rules do apply
extravagant, and recipient and reported on Form W-2, to the holding of mineral property.
• An employee of the cooperative Wage and Tax Statement, for an If the at-risk rules apply, adjust the
must be present at the meal. For more employee or on Form 1099-NEC, amount on this line for any section
information, see Pub. 535. Nonemployee Compensation, for an 465(d) losses. These losses are
See section 274(n)(3) for a special independent contractor. limited to the amount for which the
rule that applies to expenses for However, if the recipient is an cooperative is at risk for each
meals consumed by individuals officer, director, beneficial owner separate activity at the close of the tax
subject to the hours of service limits of (directly or indirectly), or other year. If the cooperative is involved in
the Department of Transportation. “specified individual” (as defined in one or more activities, any of which
Qualified transportation fringes section 274(e)(2)(B) and Regulations incurs a loss for the year, report the
(QTFs). Generally, no deduction is section 1.274-9(b)), special rules losses for each activity separately.
allowed for QTFs provided by apply. Attach Form 6198, At-Risk
Limitations, showing the amount at
employers to their employees. QTFs Lobbying expenses. Generally, risk and gross income and deductions
are defined in section 132(f)(1) and lobbying expenses are not deductible. for the activities with the losses.
include: These expenses include amounts
If the cooperative sells or otherwise
• Transportation in a commuter paid or incurred in connection with:
disposes of an asset or its interest
highway vehicle between the • Influencing legislation, or
(either total or partial) in an activity to
employee's residence and place of • Any communication with certain
which the at-risk rules apply,
employment, federal executive branch officials in an
determine the net profit or loss from
• Any transit pass, and attempt to influence the official actions
the activity by combining the gain or
• Qualified parking. or positions of the officials. See
loss on the sale or disposition with the
See section 274, Pub. 15-B, and Pub. Regulations section 1.162-29 for the
profit or loss from the activity. If the
535 for more information. definition of “influencing legislation.”
cooperative has a net loss, the loss
Membership dues. The Dues and other similar amounts may be limited because of the at-risk
cooperative can deduct amounts paid paid to certain tax-exempt rules.
or incurred for membership dues in organizations may not be deductible.
Treat any loss from an activity not
civic or public service organizations, If certain in-house expenditures do
allowed for the current tax year as a
professional organizations (such as not exceed $2,000, they are
deduction allocable to the activity in
bar and medical associations), deductible. See section 162(e)(4)(B).
the next tax year.
business leagues, trade associations,
Line 25a. Taxable Income
chambers of commerce, boards of Cooperatives are required to
trade, and real estate boards. Before Adjustments and allocate income and deductions
However, no deduction is allowed if a Special Deductions between patronage and
nonpatronage-related business.
principal purpose of the organization At-risk rules. Generally, special
Cooperatives with gross receipts and
is to entertain, or provide at-risk rules under section 465 apply
assets of $250,000 or more must
entertainment facilities for members to closely held cooperatives (see
complete Schedule G. See the
or their guests. In addition, Passive activity limitations, earlier)
instructions for Schedule G.
cooperatives cannot deduct engaged in any activity as a trade or
membership dues in any club business or for the production of Line 25b. Deductions and
organized for business, pleasure, income. These cooperatives may Adjustments From
recreation, or other social purpose. have to adjust the amount on line 25a. Schedule H
This includes country clubs, golf and (See below.)
athletic clubs, airline and hotel clubs, Complete Schedule H. Enter on
A taxpayer is generally considered
and clubs operated to provide meals line 25b the amount from Schedule H,
“at-risk” for an amount equal to the
under conditions favorable to line 5. See the instructions for
taxpayer’s investment in the entity.
business discussion. Schedule H.
That investment consists of money
Entertainment facilities. The and other property contributed to the Line 25c. Taxable Income
cooperative cannot deduct an entity and amounts borrowed on Before Net Operating Loss and
expense paid or incurred for a facility behalf of the entity. Special Deductions
(such as a yacht or hunting lodge) The at-risk rules do not apply to: Subtract line 25b from line 25a and
used for an activity usually considered enter the result on line 25c.

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Line 26a. Net Operating Loss • If a cooperative elects the period and instead carry the NOL
Deduction alternative tax on qualifying shipping forward to future tax years.
activities under section 1354, no
A cooperative can use the NOL See the instructions for
deduction is allowed for an NOL
incurred in 1 tax year to reduce its Schedule K, Item 12 for information
attributable to the qualifying shipping
taxable income in another tax year. on making the election to waive the
activities to the extent that the loss is
Enter on line 26a the total NOL carryback period. See the Instructions
carried forward from a tax year
carryovers from other tax years, but for Form 1139 for other special rules
preceding the first tax year for which
do not enter more than the and elections.
the alternative tax election was made.
cooperative's taxable income (after The NOL deduction for tax year
See section 1358(b)(2).
special deductions). Attach a 2022 cannot exceed the aggregate
statement showing the computation of For more details on the NOL amount of NOLs arising in tax years
the NOL deduction. Also, complete deduction, see section 172 and the beginning before January 1, 2018,
Schedule K, Item 12, if applicable. Instructions for Form 1139. carried to such year plus the lesser of:
1. The aggregate amount of NOLs
The cooperative must attach a Line 26b. Special Deductions arising in tax years beginning after
statement separately accounting for
patronage and nonpatronage-sourced See the instructions for Schedule C. December 31, 2017, carried to such
NOLs. Then, complete Schedule C and enter tax year; or
on line 26b the amount from
2. 80% of the excess, if any, of
Note. Patronage-sourced NOLs Schedule C, line 24.
taxable income determined without
cannot be used to reduce Line 26c. Total NOL and Special any NOL deduction, section 199A
nonpatronage-sourced taxable deduction, or section 250 deduction,
Deductions
income. over any NOL carryover to the tax
Combine lines 26a and 26b and enter
year from tax years beginning before
The following special rules apply. the result on line 26c.
• If an ownership change (described January 1, 2018.
in section 382(g)) occurs, the amount Tax, Refundable Credits, An exception applies for NOLs of
of the taxable income of a loss insurance companies other than life
and Payments
cooperative that may be offset by the insurance companies. The 80%
pre-change NOL carryovers may be Line 27. Taxable Income taxable income limit does not apply to
limited. See section 382 and the See Schedule K, Question 14, to these entities. See sections 172(b)
related regulations. A loss cooperative determine if the cooperative needs to and (f).
must include the information complete Schedule G. Taxable Merchant Marine capital construc-
statement as provided in Regulations income reported on line 27 cannot be tion fund. To take a deduction for
section 1.382-11(a) with its income less than the nonpatronage taxable amounts contributed to a capital
tax return for each tax year that it is a income shown on Schedule G, construction fund (CCF), reduce the
loss cooperative in which an line 10, column b. amount that would otherwise be
ownership shift, equity structure shift,
or other transaction described in Patronage source losses entered on line 27 by the amount of
Temporary Regulations section ! cannot be used to offset the deduction. On the dotted line next
1.382-2T(a)(2)(i) occurs. If the CAUTION nonpatronage income. See to the entry space, enter “CCF” and
cooperative makes the the instructions for Schedule G. the amount of the deduction. For more
closing-of-the-books election, see information, see section 7518.
Regulations section 1.382-6(b). Minimum taxable income. The
cooperative's taxable income cannot Line 29
The limitations under section 382 be less than the inversion gain of the Reserved for future use.
do not apply to certain ownership cooperative for the tax year, if the Line 30a. 2021 Overpayment
changes after February 17, 2009, cooperative is an expatriated entity or
made according to a restructuring a partner in an expatriated entity. See Credited to 2022
plan under the Emergency Economic section 7874(a). Enter the amount of overpayment
Stabilization Act of 2008. See section credited to 2022 from the tax return
382(n). Net operating loss (NOL). If line 27 filed for 2021.
For guidance in applying section (figured without regard to the
382 to loss cooperatives whose minimum taxable income rule stated Line 30b. Estimated Tax
instruments were acquired by above) is zero or less, the cooperative Payments
Treasury under certain programs may have an NOL that can be carried Enter any estimated tax payments the
under the Emergency Economic back or forward as a deduction to cooperative made for the tax year.
Stabilization Act of 2008, see Notice other tax years.
Beneficiaries of trusts. If the
2010-2, 2010-2 I.R.B. 251. Only farming losses and losses of
cooperative is the beneficiary of a
• If a cooperative acquires control of an insurance company (other than a
trust, and the trust makes a section
another cooperative (or acquires its life insurance company) can be
643(g) election to credit its estimated
assets in a reorganization), the carried back. The carryback period for
tax payments to its beneficiaries,
amount of pre-acquisition losses that these losses is 2 years. For NOLs that
include the cooperative's share of the
may offset recognized built-in gain can be carried back, the cooperative
payment in the total for line 30b. Enter
may be limited (see section 384). can elect to waive the carryback

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“T” and the amount of the payment in in the issue years' taxes on this line. installment agreement, such as
the shaded space beside line 30b. Attach a statement showing how the paying the liability within 24 months
adjustment was figured. This and making all required deposits and
Line 30c. Overpaid Estimated adjustment is treated as a payment, timely filing tax returns during the
Tax and any amount that is more than the length of the agreement. If the
If the cooperative overpaid estimated tax on line 28 will be refunded. installment agreement is accepted,
tax, it may be able to get a quick the cooperative will be charged a fee
refund by filing Form 4466. The Line 30j. Total Payments, and it will be subject to penalties and
overpayment must be at least 10% of Refundable Credits, and interest on the amount of tax not paid
the cooperative's expected income Section 1383 Adjustments by the due date of the return.
tax liability and at least $500. File Add the amounts on lines 30d through
Line 34. Refund
Form 4466 after the end of the 30h and enter the total on line 30j.
cooperative's tax year, and no later Enter the amount of any overpayment
than the due date for filing the Backup withholding. If the that should be refunded or applied to
cooperative’s tax return. Form 4466 cooperative had federal income tax next year's estimated tax.
must be filed before the cooperative withheld from any payments it
files its tax return. See the instructions received because, for example, it Note. This election to apply some or
for Form 4466. failed to give the payer its correct EIN, all of the overpayment amount to the
include the amount withheld in the cooperative's 2023 estimated tax
Line 30d. Net Tax Payments total for line 30j. Enter the amount cannot be changed at a later date.
Combine lines 30a through 30c and withheld and the words “Backup
Direct deposit of refund. If the
enter the result on line 30d. withholding” in the blank space above
cooperative has a refund of $1 million
line 30j.
Line 30f or more and wants it directly
Line 31. Estimated Tax Penalty deposited into its checking or savings
Credit from Form 2439. Enter any account at any U.S. bank or other
Generally, the cooperative does not
credit from Form 2439, Notice to financial institution instead of having a
have to file Form 2220 because the
Shareholder of Undistributed check sent to the cooperative,
IRS can figure the penalty amount, if
Long-Term Capital Gains, for the complete Form 8302 and attach it to
any, and bill the cooperative.
cooperative's share of the tax paid by the cooperative's tax return.
However, even if the cooperative
a regulated investment company
does not owe the penalty, it must
(RIC) or a real estate investment trust
complete and attach Form 2220 if:
(REIT) on undistributed long-term Schedule C.
capital gains included in the • The annualized income or adjusted
seasonal installment method is used, Dividends, Inclusions, and
cooperative's income. Attach Form Special Deductions
or
2439.
• The cooperative is a large
Credit for federal tax on fuels. corporation (as defined in the Note. Do not report income from
Enter the total income tax credit Instructions for Form 2220) computing patronage dividends on Schedule C.
claimed on Form 4136, Credit for its first required installment based on Report income from patronage
Federal Tax Paid on Fuels. Attach the prior year's tax. See the dividends and per-unit retain
Form 4136. Instructions for Form 2220. allocations on page 1, line 9.
For purposes of the 20% ownership
Credit for tax on ozone-depleting If Form 2220 is attached, check the test on lines 1 through 7, the
chemicals. Include on line 30f any box on line 31, and enter any penalty percentage of stock owned by the
credit the cooperative is claiming on this line. cooperative is based on voting power
under section 4682(g)(2) for tax on and value of the stock. Preferred
ozone-depleting chemicals. Enter Line 32. Amount Owed
“ODC” next to the entry space. If the cooperative cannot pay the full stock described in section 1504(a)(4)
amount of tax owed, it can apply for is not taken into account.
Line 30g an installment agreement online. The Consolidated returns.
Reserved for future use. cooperative can apply for an Cooperatives filing a consolidated
installment agreement online if: return should see Regulations
Line 30h. Section 1383
• It cannot pay the full amount shown sections 1.1502-13, 1.1502-26, and
Adjustment on line 32, 1.1502-27 before completing
If the cooperative would pay less total • The total amount owed is $25,000 Schedule C.
tax by claiming the deduction for the or less, and Cooperatives filing a consolidated
redemption of nonqualified written • The cooperative can pay the liability return must not report as dividends on
notices of allocation or nonqualified in full in 24 months. Schedule C any amounts received
per-unit retain certificates in the issue To apply using the Online Payment from corporations within the
year versus the current tax year, Agreement Application, go to IRS.gov/ consolidated group. Such dividends
refigure the tax for the years the OPA. Under an installment are eliminated in consolidation rather
nonqualified written notices or agreement, the cooperative can pay than offset by the dividends-received
certificates were originally issued what it owes in monthly installments. deduction.
(deducting them in the issue year), There are certain conditions that must
then enter the amount of the reduction be met to enter into and maintain an

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Line 1, Column (a) acquired by incurring a debt (for the foreign corporation by vote and
Enter dividends (except those example, it borrowed money to buy value.
received on certain debt-financed the stock).
Also, include dividends received
stock acquired after July 18, 1984— • Dividends received from a RIC on
from a less-than-20%-owned foreign
see section 246A) that are: debt-financed stock. The amount of
sales corporation (FSC) that:
• Received from dividends eligible for the
less-than-20%-owned domestic dividends-received deduction is • Are attributable to income treated
as effectively connected with the
corporations subject to income tax, limited by section 854(b). The
conduct of a trade or business within
and cooperative should receive a notice
the United States (excluding foreign
• Qualified for the 50% deduction from the RIC specifying the amount of
trade income), and
under section 243(a)(1). dividends that qualify for the
deduction. • Qualify for the 50% deduction
Also, include on line 1 the under section 245(c)(1)(B).
following. Line 3, Columns (b) and (c)
Line 7, Column (a)
• Taxable distributions from an Dividends received on certain
Enter the U.S.-source portion of
interest charge domestic international debt-financed stock acquired after
dividends that:
sales corporation (IC-DISC) or former July 18, 1984, are not entitled to the
domestic international sales full 50% or 65% dividends-received • Are received from
20%-or-more-owned foreign
corporation (former DISC) that are deduction under section 243 or
corporations, and
designated as eligible for the 50% 245(a). The 50% or 65% deduction is
deduction and certain dividends of reduced by a percentage that is • Qualify for the 65% deduction
under sections 245(a) and 243.
Federal Home Loan Banks. See related to the amount of debt incurred
section 246(a)(2). to acquire the stock. See section Also, include dividends received
• Dividends (except those received 246A. Also, see section 245(a) before from a 20%-or-more-owned FSC that:
on debt-financed stock acquired after making this computation for an • Are attributable to income treated
July 18, 1984) from a RIC. The additional limitation that applies to as effectively connected with the
amount of dividends eligible for the certain dividends received from conduct of a trade or business within
dividends-received deduction under foreign corporations. Attach a the United States (excluding foreign
section 243 is limited by section statement to Form 1120-C showing trade income), and
854(b). The cooperative should how the amount on line 3, column (c), • Qualify for the 65% deduction
receive a notice from the RIC was figured. under section 245(c)(1)(B).
specifying the amount of dividends
Line 4, Column (a)
that qualify for the deduction. Line 8, Column (a)
Enter dividends received on preferred Enter dividends received from wholly
Report so-called dividends or stock of a less-than-20%-owned owned foreign subsidiaries that are
earnings received from mutual public utility that is subject to income eligible for the 100% deduction under
savings banks, etc., as interest. Do tax and is allowed the 23.3% section 245(b).
not treat them as dividends. deduction provided in sections 244
Line 2, Column (a) and 247 (as affected by P.L. 113-295, In general, the deduction under
Div. A, section 221(a)(41)(A), Dec. 19, section 245(b) applies to dividends
Enter on line 2: paid out of the earnings and profits of
2014, 128 Stat. 4043) for dividends
• Dividends (except those received a foreign corporation for a tax year
paid.
on certain debt-financed stock during which:
acquired after July 18, 1984) that are Line 5, Column (a) • All of its outstanding stock is
received from 20%-or-more-owned Enter dividends received on preferred directly or indirectly owned by the
domestic corporations subject to stock of a 20%-or-more-owned public domestic cooperative receiving the
income tax and that are subject to the utility that is subject to income tax and dividends, and
65% deduction under section 243(c), is allowed the 26.7% deduction • All of its gross income from all
and provided in sections 244 and 247 (as sources is effectively connected with
• Taxable distributions from an affected by P.L. 113-295, Div. A, the conduct of a trade or business
IC-DISC or former DISC that are section 221(a)(41)(A), Dec. 19, 2014, within the United States.
considered eligible for the 65% 128 Stat. 4043) for dividends paid. Line 9, Column (c)
deduction.
Line 6, Column (a) Generally, line 9, column (c), cannot
Line 3, Column (a) exceed the amount from the
Enter the U.S.-source portion of
Enter the following. dividends that: worksheet below. However, in a year
• Dividends received on certain • Are received from in which an NOL occurs, this limitation
debt-financed stock acquired after less-than-20%-owned foreign does not apply even if the loss is
July 18, 1984, from domestic and corporations, and created by the dividends-received
foreign corporations subject to income • Qualify for the 50% deduction deduction. See sections 172(d) and
tax that would otherwise be subject to under section 245(a). To qualify for 246(b).
the dividends-received deduction the 50% deduction, the cooperative
under section 243(a)(1), 243(c), or must own at least 10% of the stock of
245(a). Generally, debt-financed
stock is stock that the cooperative
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                                        Investment Act of 1958 at the time it    period requirement under section 
Worksheet for Schedule C, line 9
    (keep for your records)             received the dividends.                  246(c)(5), etc.).
                                        Line 11, Columns (a) and (c)             Also, include on line 14 the 
1. Refigure Form 1120-C, page 
    1, line 25a, without any            Enter only dividends that qualify under  cooperative's share of distributions 
    deduction under section             section 243(b) for the 100%              from a section 1291 fund from Form 
    199A, any adjustment under          dividends-received deduction             8621, to the extent that the amounts 
    section 1059, and without any       described in section 243(a)(3).          are taxed as dividends under section 
    capital loss carryback to the       Cooperatives taking this deduction       301. See Form 8621 and the 
    tax year under section 1212(a)      are subject to the provisions of section Instructions for Form 8621.
    (1) . . . . . . . . . . . . . . .  
2. Complete lines 10, 11, 12,           1561.                                    Attach a statement identifying the 
    and 13, column (c) and enter          The 100% deduction does not            amount of each dividend reported on 
    the total . . . . . . . . . . . .                                            line 14 and the provision pursuant to 
                                        apply to affiliated group members that 
3. Subtract line 2 from                                                          which a deduction is not allowed with 
    line 1 . . . . . . . . . . . . .    are joining in the filing of a 
4. Multiply line 3 by 65%               consolidated return.                     respect to such dividend.
    (0.65) . . . . . . . . . . . . .                                             Line 15
                                        Line 12, Columns (a) and (c)
5. Add lines 2, 5, 7, and 8,                                                     Reserved for future use.
    column (c) and the part of the      Enter in column (a) dividends from 
    deduction on line 3, column         FSCs that are attributable to foreign    Line 16a, Column (a)
    (c), that is attributable to        trade income and that are eligible for 
                                                                                 Enter the foreign-source portion of 
    dividends received from             the 100% deduction provided in 
                                                                                 any subpart F inclusions attributable 
    20%-or-more-owned                   section 245(c)(1)(A).
    corporations . . . . . . . . .                                               to the sale or exchange by a CFC of 
6. Enter the smaller of line 4 or         For cooperatives described in          stock in another foreign corporation 
    line 5. If line 5 is greater than   section 1381 that are engaged in the     described in section 964(e)(4). This 
    line 4, stop here; enter the        marketing of agricultural or             should equal the sum of the amounts 
    amount from line 6 on line 9,       horticultural products and are           reported by the U.S. shareholder on 
    column (c). Do not complete         shareholders in a FSC, multiply the      Form(s) 5471, Schedule I, line 1a. (Do 
    the rest of this 
    worksheet   . . . . . . . . . .     total dividends reported in column (a)   not include on line 16a any portion of 
7. Enter the total amount of            by  /  (or, 0.6957) for the exempt 16 23 such subpart F inclusion that is not 
    dividends received from             portion of the dividends that are        eligible for the section 245A deduction 
    20%-or-more-owned                   attributable to foreign trade income,    pursuant to Regulations section 
    corporations that are included      and enter the amount in column (c).      1.245A-5(g)(2). Include such amounts 
    on lines 2, 3, 5, 7, and 8,         See sections 245(c)(2) and 923(a)(4)     on line 16c.)
    column (a) . . . . . . . . . .     
                                        (repealed by P. L. 106-519, section 2, 
                                                                                 Line 16b, Column (a)
8. Subtract line 7 from                 Nov. 15, 2000) for additional 
    line 3 . . . . . . . . . . . . .                                             Enter the total subpart F inclusions 
9. Multiply line 8 by 50%               information.
    (0.50) . . . . . . . . . . . . .                                             attributable to tiered hybrid dividends. 
                                        Line 13, Column (a)
10. Subtract line 5 from line 9,                                                 This should equal the sum of the 
    column (c)  . . . . . . . . . .     Enter the foreign-source portion of      amounts reported by the U.S. 
11. Enter the smaller of line 9 or      dividends that:                          shareholder on Form(s) 5471, 
    line 10. . . . . . . . . . . . .    • Are received from a specified          Schedule I, line 1b.
12. Dividends-received                  10%-owned foreign corporation (as 
                                                                                 Line 16c, Column (a)
    deduction after limitation          defined in section 245A(b)), including, 
    (section 246(b)). Add lines 6       for example, gain from the sale of       Enter all other amounts included in 
    and 11. Enter the result here       stock of a foreign corporation that is   income under section 951. This 
    and on line 9, column                                                        should equal the sum of the amounts 
    (c) . . . . . . . . . . . . . . .   treated as a dividend under section 
                                        1248(a) and (j); and                     reported by the U.S. shareholder on 
                                        • Qualify for the section 245A           Form(s) 5471, Schedule I, lines 1(c) 
Line 10, Columns (a) and (c)            deduction.                               through 1(h), 2, and 4.
Small business investment               Line 14, Column (a)                      Line 17, Column (a)
companies operating under the Small     Enter foreign dividends not reportable   Enter amounts included in income 
Business Investment Act of 1958 must    on lines 3, 6, 7, 8, 11, 12, or 13 of    under section 951A. See Form 8992, 
enter dividends that are received from  column (a).                              Part II, line 5, and the Instructions for 
domestic corporations subject to                                                 Form 8992. Also, if applicable, attach 
income tax even though a deduction        Include on line 14 the                 Form(s) 5471.
is allowed for the entire amount of     foreign-source portion of any dividend 
those dividends. To claim the 100%      that does not qualify for the section    Note. Consider the applicability of 
deduction on line 10, column (c), the   245A deduction (for example, hybrid      section 951A with respect to CFCs 
cooperative must file with its return a dividends within the meaning of          owned by domestic partnerships in 
statement that it was a federal         section 245A(e), ineligible amounts of   which the cooperative has an interest.
licensee under the Small Business       dividends within the meaning of 
                                        Regulations section 1.245A-5(b), 
                                        dividends that fail to meet the holding 

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Line 18, Column (a) (4) and Regulations section 1.246-5 inventory), then the source may be
Include gross-up for taxes deemed for more details. Preferred dividends patronage.
paid under section 960. attributable to periods totaling less
Special rules also apply if a
than 367 days are subject to the
cooperative has acquired the assets
Line 19, Column (a) 46-day holding period rule above.
of another cooperative under a
Enter taxable distributions from an c. Dividends on any share of stock section 381(a) transaction.
IC-DISC or former DISC that are to the extent the cooperative is under Cooperatives may elect to net
designated as not eligible for a an obligation (including a short sale) earnings against losses under section
dividends-received deduction. to make related payments with 1388(j) and still be eligible for
No deduction is allowed under respect to positions in substantially tax-exempt treatment.
section 243 for a dividend from an similar or related property.
IC-DISC or former DISC (as defined in 5. Any other taxable dividend Line 6
section 992(a)) to the extent the income not properly reported For agricultural and horticultural
dividend: elsewhere on Schedule C. cooperatives only, special rules apply
• Is paid out of the cooperative's in determining and reporting the
accumulated IC-DISC income or Line 21, Column (c) section 199A(g) deduction. See the
previously taxed income, or Section 247 (as affected by P.L. instructions for page 1, line 22. Also,
• Is a deemed distribution under 113-295, Div. A, section 221(a)(41) see the Instructions for Form 8903.
section 995(b)(1). (A), Dec. 19, 2014, 128 Stat. 4043)
Line 8, Columns (a) and (b)
allows public utilities a deduction of
Line 20, Column (a) 40% of the smaller of (a) dividends Complete Schedule H before entering
Include the following. paid on their preferred stock during an amount on this line. Allocate the
1. Dividends (other than capital the tax year, or (b) taxable income amount on Schedule H, line 5,
gain distributions reported on computed without regard to this between patronage and
Schedule D (Form 1120) and deduction. In a year in which an NOL nonpatronage. Only farmers'
exempt-interest dividends) that are occurs, compute the deduction cooperatives exempt under section
received from RICs and that are not without regard to section 247(a)(1)(B). 521 are allowed to take a deduction in
subject to the 50% deduction. column (b) for nonpatronage
Line 22, Column (c) distributions under section 1382(c).
2. Dividends from tax-exempt Enter the section 250 deduction
Line 9a, Columns (a) and (b)
organizations. claimed for foreign-derived intangible
3. Dividends (other than capital income (FDII) and global intangible Compute and carry back or carry over
gain distributions) received from a low-taxed income (GILTI). This should patronage and nonpatronage NOLs
REIT that, for the tax year of the trust equal the sum of Form 8993, Part III, separately. Under section 1388(j)(1),
in which the dividends are paid, lines 28 and 29. cooperatives can use losses from one
qualifies under sections 856 through or more allocation units to offset
860. earnings of one or more other
4. Dividends not eligible for a Schedule G. allocation units, as permitted by their
dividends-received deduction, which Allocation of Patronage bylaws, but only to the extent that the
earnings and losses are from
include the following. and Nonpatronage Income
business done with or for patrons. If a
a. Dividends received on any and Deductions cooperative exercises this option, it
share of stock held for less than 46 If the cooperative's total receipts must provide the information specified
days during the 91-day period (page 1, line 1a plus lines 4 through 9) in section 1388(j)(3) in a written notice
beginning 45 days before the for the tax year and its total assets at to its patrons.
ex-dividend date. When counting the the end of the tax year are less than
number of days the cooperative held $250,000, the cooperative is not Line 9b, Columns (a) and (b)
the stock, you cannot count certain required to complete Schedule G. See Allocate the amount of total special
days during which the cooperative's Schedule K, Question 14. deductions reported on Schedule C,
risk of loss was diminished. See line 20, between patronage and
section 246(c)(4) and Regulations Cooperatives are required to nonpatronage business.
section 1.246-5 for more details. allocate income and deductions
between patronage and Line 10, Columns (a) and (b)
b. Dividends received on any nonpatronage business. If the The taxable income reported on
share of preferred stock, which are transaction producing the income page 2, line 27, may not be less than
attributable to periods totaling more merely enhances the overall the nonpatronage taxable income
than 366 days, if such stock was held profitability of the cooperative, being shown on Schedule G, line 10
for less than 91 days during the merely incidental to the cooperative's (column b).
181-day period that began 90 days operation, the income is from a
before the ex-dividend date. When nonpatronage source. But if the Line 11, Column (a)
counting the number of days the source of income or loss is from an Combine lines 10(a) and 10(b).
cooperative held the stock, you activity that is an integral part of the
cannot count certain days during cooperative's business (such as Note. Any patronage source losses
which the cooperative's risk of loss (line 10, column (a)) cannot be used
was diminished. See section 246(c)
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to offset nonpatronage income              allocation.” See section 1382(c)(2)(B)    In general, a qualified written notice 
(line 10, column (b)).                     for deductibility of amounts paid in    of allocation is a written notice of 
                                           redemption of nonqualified written      allocation that is:
Line 12, Column (a)                        notices of allocation. See section      • Paid as part of a patronage 
Enter any unused patronage loss from       1388(d) for a definition of a           dividend, in money or by qualified 
line 10, column (a).                       nonqualified written notice of          check equal to at least 20% of the 
Line 13, Column (b)                        allocation.                             patronage dividend, and
                                                                                   • One of the following conditions is 
Enter any unused nonpatronage loss         Line 3. Patronage Dividends             met:
from line 10, column (b).                  To be deductible, patronage 
                                                                                     1. The patron must have at least 
                                           dividends must be paid during the 
                                                                                   90 days from the date the written 
                                           payment period that begins on the first 
Schedule H.                                                                        notice of allocation is paid to redeem it 
                                           day of the tax year in which the 
                                                                                   in cash, and must receive written 
Deductions and                             patronage occurs and ends on the 
                                                                                   notice of the right of redemption at the 
Adjustments Under                          15th day of the 9th month after the 
                                                                                   time the patron receives the 
Section 1382                               end of that tax year.
                                                                                   allocation; or
Line 1. Dividends Paid on                    See sections 1382(e) and (f) for        2. The patron must agree to have 
Capital Stock (Section 521                 special rules for the time when         the allocation treated as constructively 
                                           patronage occurs if products are 
Cooperatives Only)                                                                 received and reinvested in the 
                                           marketed under a pooling                cooperative. See section 1388(c)(2) 
Enter the amount actually or               arrangement, or if earnings are         and the related regulations for 
constructively paid as dividends           includible in the gross income of the   information on how this consent must 
during the tax year on:                    cooperative for a tax year after the    be made.
• Common stock (whether voting or          year in which the patronage occurred.
nonvoting),                                                                        Line 3d. Nonqualified written noti-
• Preferred stock,                           Patronage dividends include any       ces of allocation. If a written notice 
• Capital retain certificates,             amount paid to a patron by a            of allocation does not qualify, no 
• Revolving fund certificates,             cooperative based on the quantity or    deduction is allowable at the time it is 
• Letters of advice, or                    value of business done with or for that issued. However, the cooperative is 
• Other documentary evidence of a          patron under a pre-existing obligation  entitled to a deduction or refund of tax 
proprietary interest in the cooperative    to pay that amount. The amount is       when the nonqualified written notice 
association.                               determined by reference to the net      of allocation is finally redeemed, if that 
                                           earnings of the organization from 
  See Regulations section                                                          notice was paid as a patronage 
                                           business done with or for its patrons.
1.1382-3(b) for more information.                                                  dividend during the payment period 
                                                                                   for the tax year during which the 
Line 2. Nonpatronage Income                Note. Net earnings are not reduced 
                                                                                   patronage occurred. The deduction or 
                                           by dividends paid on capital stock of 
Allocated to Patrons (Section                                                      refund is allowed, but only to the 
                                           the organization if there is a legally 
                                                                                   extent that amounts paid to redeem 
521 Cooperatives Only)                     enforceable agreement that such 
                                                                                   the nonqualified written notices of 
Enter nonpatronage income allocated        dividends are in addition to amounts 
                                                                                   allocation are paid in money or other 
to patrons. Payment may be in:             otherwise payable to patrons derived 
                                                                                   property (other than written notices of 
• Money,                                   from business done with or for 
                                                                                   allocation) which do not exceed the 
• Qualified written notices of             patrons.
allocation, or                                                                     stated dollar amounts of the 
• Other property (except nonqualified        Patronage dividends may be paid       nonqualified written notices of 
written notices of allocation).            in:                                     allocation. See section 1382(b), 
                                           • Money,                                Regulations section 1.1382-2, and 
  The amounts must be paid during          • Qualified written notices of          section 1383.
the payment period that begins on the      allocation, or                            See section 1383 for special rules 
first day of the tax year and ends on      • Other property (except nonqualified   for figuring the cooperative's tax in the 
the 15th day of the 9th month after the    written notices of allocation).         year nonqualified written notices of 
end of the tax year in which the 
income was earned.                         Line 3b. Qualified written notices      allocation are redeemed. The 
                                           of allocation. A written notice of      cooperative is entitled to:
  Nonpatronage income.                     allocation means:                         1. A deduction in the tax year the 
Nonpatronage income includes               • Any capital stock,                    nonqualified written notices of 
incidental income from sources not         • Revolving fund certificate,           allocation are redeemed (if permitted 
directly related to:                       • Retain certificate,                   under section 1382(b)(2) or section 
• Marketing, purchasing, or service        • Certificate of indebtedness,          1382(c)(2)(B)), or
activities of the cooperative; or          • Letter of advice, or                    2. A tax credit based on a 
• Income from business done with or        • Other written notice, which states    recomputation of tax for the year(s) 
for the U.S. Government, or any of its     the dollar amount allocated to the      the nonqualified written notices of 
agencies.                                  patron by the cooperative and the       allocation were issued. See the 
  See the instructions for line 3b for a   part, if any, which is a patronage      instructions for page 2, line 30h.
definition of “qualified written notice of dividend.

Instructions for Form 1120-C                              -21-

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Amounts paid to patrons are not between the members of the group. Line 5b. Qualified Electric
patronage dividends if paid: See Schedule O and the Instructions Vehicle Credit
1. Out of earnings not from for Schedule O (Form 1120) for more
Enter any qualified electric vehicle
business done with or for patrons; information.
passive activity credits from prior
2. Out of earnings from business Line 2. Income Tax years allowed for the current tax year
done with or for other patrons to Multiply taxable income by 21%. Enter from Form 8834, Qualified Electric
whom no amounts or smaller amounts this amount on line 2. Vehicle Credit, line 7. Attach Form
are paid for substantially identical 8834.
transactions; Deferred tax under section 1291. If
the cooperative was a shareholder in Line 5c. General Business
3. To redeem capital stock, a PFIC and received an excess Credit
certificates of indebtedness, revolving distribution or disposed of its Enter on line 5c the allowable credit
fund certificates, retain certificates, investment in the PFIC during the from Form 3800, Part II, line 38.
letters of advice, or other similar year, it must include the increase in
documents; or taxes due under section 1291(c)(2) The cooperative is required to file
4. Without reference to the net (from Form 8621) in the total for line 2. Form 3800 to claim any of the
earnings of the cooperative On the dotted line next to line 2, enter business credits. See the Instructions
organization from business done with “Section 1291” and the amount. for Form 3800 for exceptions. For a
list of allowable credits, see Form
or for its patrons. Do not include on line 2 any
3800. Also, see the applicable credit
Line 4. Section 199A(g) deduction interest due under section 1291(c)(3).
form and its instructions.
allocated to patrons. For Instead, include the amount of interest
agricultural and horticultural owed on Schedule J, line 8, as other Elective allocations to patrons of
cooperatives only, cooperatives interest. subchapter T cooperatives. The
engaged in the marketing or For more information on reporting cooperative may elect to allocate any
manufacture, production, growth, or the deferred tax and interest, see the or all of certain credits among the
extraction of agricultural or Instructions for Form 8621. patrons based on the quantity or value
of business done with or for such
horticultural products may be eligible Increase in tax attributable to part- patrons. This includes the following, if
to compute a deduction under section ner's audit liability under section applicable:
199A(g). See the instructions for 6226. If the cooperative is filing Form • Biofuel producer credit (Form
page 1, line 22. 8978 to report adjustments shown on 6478);
An agricultural or horticultural Form 8986 they received from • Renewable electricity, refined coal,
cooperative, as defined in section partnerships which have been audited and Indian coal production credit
199A(g), must reduce its section 1382 and have elected to push out imputed (Form 8835);
deduction by the amount of the underpayments to their partners, • Biodiesel, renewable diesel, or
section 199A(g) deduction that was include any increase in taxes due sustainable aviation fuels credit (Form
passed through to patrons. (positive amount) from Form 8978, 8864); and
line 14, in the total for Form 1120-C, • Low sulfur diesel fuel production
Note. Only include on line 4 the Schedule J, line 2. On the dotted line credit (Form 8896).
portion of the section 199A(g) next to line 2, enter "FROM FORM
For the allocation to take effect, the
deduction attributable to the qualified 8978" and the amount. Attach Form
cooperative must designate the
payments reported on this schedule. 8978. If Form 8978, line 14, shows a
apportionment in a written notice
Marketing cooperatives that distribute decrease in tax, see the instructions
mailed to its patrons before the due
patronage as per-unit retain for Schedule J, line 6.
allocations must attach a statement date of the cooperative's return. The
showing the amount of the section Line 3. Base Erosion Minimum credit amount allocated to patrons
199A(g) deduction attributable to the Tax cannot be included on line 5c. Once
made, the election cannot be revoked.
per-unit retain allocations. If the cooperative had gross receipts
For more information, see the
of at least $500 million in any 1 of the
instructions for the applicable credit
3 tax years preceding the current tax
Schedule J. form. Also, see the Instructions for
year, complete and attach Form 8991.
Form 3800. For tax associated with a
Tax Computation Enter on line 3 the base erosion
decrease in the credit allocated to
Line 1. Members of a Controlled minimum tax amount from Form 8991,
patrons, see Other Taxes, later.
Group Part IV, line 5e. See section 59A and
the Instructions for Form 8991. Also, Required allocations to patrons of
If the cooperative is a member of a see Schedule K, Question 16, later. subchapter T cooperatives. Any
controlled group, check the box on excess of the certain credits that are
line 1. Complete and attach Line 5a. Foreign Tax Credit not used by the cooperative because
Schedule O (Form 1120), Consent To find out when a cooperative can of the tax liability limitation must be
Plan and Apportionment Schedule for take the credit for payment of income passed through to the patrons. This
a Controlled Group. Component tax to a foreign country or U.S. includes the following credits, if
members of a controlled group must possession, see Form 1118, Foreign applicable.
use Schedule O to report the Tax Credit—Corporations. • Investment credit (Form 3468).
apportionment of certain tax benefits
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• Work opportunity credit (Form Recapture of Investment Credit. See decreased, there is a tax imposed on
5884). the Instructions for Form 4255. the cooperative, not the patron.
• Empowerment zone employment • Biofuel producer credit (Form
Recapture of low-income housing
credit (Form 8844). 6478). See section 40(g)(6)(B)(iii).
credit. If the cooperative disposed of
• Indian employment credit (Form • Renewable electricity, refined coal,
property (or there was a reduction in
8845). and Indian coal production credit
the qualified basis of the property) for
• Credit for employer differential (Form 8835). See section 45(e)(11)
which it took the low-income housing
wage payments (Form 8932). (C).
credit and the cooperative did not
• Credit for small employer health • Biodiesel, renewable diesel, or
follow the procedures that would have
insurance premiums (Form 8941). sustainable aviation fuels credit (Form
prevented recapture of the credit, it
These credits cannot be carried back 8864). See section 40A(e)(6)(B)(iii).
may owe a tax. See Form 8611,
or over by the cooperative. See the • Low sulfur diesel fuel production
Recapture of Low-Income Housing
applicable form and related credit (Form 8896). See section
Credit.
instructions for details. For tax 45H(f)(3).
associated with a recapture of credit, Alternative tax on qualifying ship- For details on the recapture of the
see Other Taxes, later. ping activities. Enter any alternative credits, see the instructions for the
tax on qualifying shipping activities applicable form.
Line 5d. Credit for Prior Year from Form 8902. Check the box for
Minimum Tax Form 8902. Recapture of required excess
credit allocated to patrons. If the
To figure any allowable minimum tax Other. Check the box for “Other” if
cooperative allocated excess credit to
credit and any carryforward of that the cooperative includes any
patrons, any credit recapture applies
credit, use Form 8827. additional taxes and interest such as
as if the cooperative had claimed the
Line 5e. Bond Credits the items discussed below. If the
entire credit. For details, see section
Enter allowable credits from Form cooperative checked the “Other” box,
46(h) (as in effect prior to enactment
8912, Credit to Holders of Tax Credit attach a statement showing the
of the Revenue Reconciliation Act of
Bonds, line 12. computation of each item included in
1990). This applies to the following
the total for line 8 and identify the
credits.
Line 6. Total Credits applicable Code section and the type
• Investment credit (Form 3468).
Add lines 5a through 5e and enter the of tax or interest.
• Work opportunity credit (Form
total on line 6. • Recapture of Indian employment
5884).
credit. Generally, if an employer
• Empowerment zone employment
Decrease attributable to partner's terminates the employment of a
credit (Form 8844).
audit liability under section 6226. qualified employee less than 1 year
• Indian employment credit (Form
If the cooperative is filing Form 8978 after the date of initial employment,
8845).
to report adjustments shown on Form any Indian employment credit allowed
• Credit for small employer health
8986 they received from partnerships for a prior tax year because of wages
insurance premiums (Form 8941).
which have been audited and have paid or incurred to that employee
• Credit for employer differential
elected to push out imputed must be recaptured. For details, see
wage payments (Form 8932).
underpayments to their partners, Form 8845 and section 45A.
include any decrease in taxes due Recapture of new markets credit Alternative minimum tax (AMT).
•
(negative amount) from Form 8978, (see Form 8874, New Markets Credit, Applicable cooperatives subject to
line 14, in the total for Form 1120-C, and Form 8874-B, Notice of AMT under section 59(k), if filing a
Schedule J, line 6. On the dotted line Recapture Event for New Markets return for a short tax year that begins
next to line 6, enter "FROM FORM Credit). in 2023 and ends in 2023, include on
8978" and the amount. Attach Form Recapture of employer-provided line 8 any AMT imposed under
•
8978. If Form 8978, line 14, shows an childcare facilities and services credit section 55, as amended by the
increase in tax, see the instructions (see Form 8882). Inflation Reduction Act of 2022. On
for Schedule J, line 2. Interest on deferred tax attributable the dotted line next to line 8, enter
•
Line 8. Other Taxes to (a) installment sales of certain “CAMT” and the AMT amount. Attach
Include any of the following taxes and timeshares and residential lots a detailed statement showing the
interest in the total on line 8. Check (section 453(l)(3)), and (b) certain computation of the AMT. Include a
the appropriate box(es) for the form, if nondealer installment obligations computation of adjusted financial
any, used to compute the total. (section 453A(c)). statement income. Label the
• Interest due on deferred gain statement “CAMT.”
Recapture of investment credit. If (section 1260(b)).
the cooperative disposed of • Interest due under section 1291(c) Line 9. Total Tax
investment credit property or changed (3). See Form 8621 and the Include any deferred tax on the
its use before the end of its useful life Instructions for Form 8621. termination of a section 1294 election
or recovery period, or is required to applicable to shareholders in a
recapture a qualifying therapeutic Recapture of elective allocation qualified electing fund in the amount
discovery project grant, enter the of credit to patrons. If the amount of entered on line 9. See the Instructions
increase in tax from Form 4255, any of the following elective credits for Form 8621.
apportioned to any patron is

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Subtract any deferred tax on the 1120)), it is still considered a member section 6038A(c)(5) and the related
cooperative's share of undistributed of a controlled group for this purpose. regulations.
earnings of a qualified electing fund.
Affiliated group. An affiliated
See the Instructions for Form 8621. If the cooperative checked “Yes,”
group is one or more chains of enter on line 8a the percentage
How to report. If deferring tax, includible corporations (section owned by the foreign person specified
attach a statement showing the 1504(a)) connected through stock in Question 8. On line 8b, enter the
computation of each item included in, ownership with a common parent name of the owner's country.
or subtracted from, the total for line 9. corporation. The common parent must
On the dotted line next to line 9, be an includible corporation and the Note. If there is more than one
specify (a) the applicable Code following requirements must be met. 25%-or-more foreign owner, complete
section, (b) the type of tax, and (c) the 1. The common parent must own lines 8a and 8b for the foreign person
amount of tax. directly stock that represents at least with the highest percentage of
80% of the total voting power and at ownership.
Schedule K. least 80% of the total value of the Foreign person. The term “foreign
stock of at least one of the other person” means:
Other Information includible corporations, and • An individual who is not a citizen or
Complete all items and questions that resident of the United States;
apply to the cooperative. 2. Stock that represents at least
80% of the total voting power and at • An individual who is a citizen or
Item 2 least 80% of the total value of the resident of a U.S. possession who is
See the list of Principal Business stock of each of the other not otherwise a citizen or resident of
Activity Codes, later. Using the list of corporations (except for the common the United States;
codes and activities, determine from parent) must be owned directly by one • Any partnership, association,
which activity the cooperative derives or more of the other includible company, or corporation that is not
the highest percentage of its total corporations. created or organized in the United
States;
receipts. Enter on lines 2a, 2b, and 2c For this purpose, “stock” generally • Any foreign estate or trust within the
the principal business activity code does not include any stock that (a) is meaning of section 7701(a)(31); or
number, the cooperative's business nonvoting, (b) is nonconvertible, (c) is • A foreign government (or one of its
activity, and a description of the limited and preferred as to dividends agencies or instrumentalities) to the
principal product or service of the and does not participate significantly extent that it is engaged in the
cooperative. For nonstore retailers, in corporate growth, and (d) has conduct of a commercial activity, as
select the PBA code by the primary redemption and liquidation rights that described in section 892.
product that your establishment sells. do not exceed the issue price of the
For example, establishments primarily stock (except for a reasonable However, the term “foreign person”
selling prescription and redemption or liquidation premium). does not include any foreign person
non-prescription drugs, select PBA See section 1504(a)(4). who consents to the filing of a joint
code 456110 Pharmacies & Drug income tax return.
Retailers. Item 7 Owner's country. For individuals,
Question 5 Enter the cooperative's total assets the term “owner's country” means the
(as determined by the accounting country of residence. For all others, it
Check the “Yes” box for Question 5 if: method regularly used in keeping the is the country where incorporated,
1. The cooperative is a subsidiary cooperative's books and records) at organized, created, or administered.
in an affiliated group (defined later), the end of the tax year. If there are no
but is not filing a consolidated return assets at the end of the tax year, Requirement to file Form 5472. If
for the tax year with that group, or enter -0-. the cooperative checked “Yes,” it may
have to file Form 5472, Information
2. The cooperative is a subsidiary If the cooperative is required to Return of a 25% Foreign-Owned U.S.
in a parent-subsidiary controlled complete Schedule L, enter total Corporation or a Foreign Corporation
group. For a definition of a assets from Schedule L, line 13, Engaged in a U.S. Trade or Business.
parent-subsidiary controlled group, column (d). If filing a consolidated Generally, a 25% foreign-owned
see the Instructions for Schedule O return, report total consolidated cooperative that had a reportable
(Form 1120). assets for all cooperatives and transaction with a foreign or domestic
Any cooperative that meets either corporations joining in the return. related party during the tax year must
of the above requirements should Question 8 file Form 5472. See the Instructions
for Form 5472 for filing instructions
check the “Yes” box. This applies Check the “Yes” box if one foreign
and penalties for failure to file.
even if the cooperative is a subsidiary person owned at least 25% of (a) the
member of one group and the parent total voting power of all classes of Item 10
corporation of another. stock of the cooperative entitled to Show any tax-exempt interest
Note. If the cooperative is an vote, or (b) the total value of all received or accrued. Include any
“excluded member” of a controlled classes of stock of the cooperative. exempt-interest dividends received as
group (see definition in the The constructive ownership rules of a shareholder in a mutual fund or
Instructions for Schedule O (Form section 318 apply in determining if a other RIC. Also, if required, include
cooperative is foreign owned. See the same amount on Schedule M-1,
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line 7 (or Schedule M-3 (Form 1120), Question 17 Small business taxpayer. A small
Part II, line 13, if applicable). The limitation on business interest business taxpayer is not subject to the
Item 12 expense applies to every taxpayer business interest expense limitation
with a trade or business, unless the and is not required to file Form 8990.
Generally, if the cooperative has an
taxpayer meets certain specified A small business taxpayer is a
NOL for tax year 2022, it can elect to
exceptions. A taxpayer may elect out taxpayer that (a) is not a tax shelter
waive the entire carryback period for
of the limitation for certain businesses (as defined in section 448(d)(3)), and
the NOL and instead carry the NOL
otherwise subject to the business (b) meets the gross receipts test of
forward to future tax years. To do so,
interest expense limitation. See section 448(c), discussed next.
check the box in Item 12 and file the
Question 18. Also, see the
return by its due date, including Gross receipts test. For 2022, a
Instructions for Form 8990.
extensions. Do not attach the taxpayer meets the gross receipts test
statement described in Temporary Certain real property trades or if the taxpayer has average annual
Regulations section 301.9100-12T. businesses and farming businesses gross receipts of $27 million or less
Once made, the election is qualify to make an election not to limit for the 3 prior tax years. A taxpayer's
irrevocable. business interest expense. This is an average annual gross receipts for the
If the cooperative timely filed its irrevocable election. If you make this 3 prior tax years is determined by
return for the loss year without making election, you are required to use the adding the gross receipts for the 3
the election, it can make the election alternative depreciation system to prior tax years and dividing the total
on an amended return filed within 6 depreciate any nonresidential real by 3. Gross receipts include the
months of the due date of the loss property, residential rental property, aggregate gross receipts from all
year return (excluding extensions). and qualified improvement property persons treated as a single employer,
Attach the election to the amended for an electing real property trade or such as a controlled group of
return and write “Filed pursuant to business, and any property with a corporations, commonly controlled
section 301.9100-2” on the election recovery period of 10 years or more partnerships, or proprietorships, and
statement. See the Instructions for for an electing farming business. See affiliated service groups. See section
Form 1139. section 168(g)(1)(F). Also, you are not 448(c) and the Instructions for Form
entitled to the special depreciation 8990 for additional information.
Cooperatives filing a consolidated allowance for that property. For a
return that elect to waive the entire taxpayer with more than one Schedule L.
carryback period for the group must qualifying business, the election is
check the box in Item 12 and attach made with respect to each business. Balance Sheets per Books
the statement required by Regulations The balance sheets should agree with
section 1.1502-21(b)(3) or the Check “Yes” if the taxpayer has an the cooperative's books and records.
election will not be valid. election in effect to exclude a real
property trade or business or a Cooperatives with total receipts
Item 13 farming business from section 163(j). (page 1, line 1a plus lines 4 through 9)
Enter the amount of the NOL For more information, see section and total assets at the end of the tax
carryover to the tax year from prior 163(j) and the Instructions for Form year less than $250,000 are not
years, even if some of the loss is used 8990. required to complete Schedules L,
to offset income on this return. The M-1, and M-2 if the “Yes” box on
Question 18
amount to enter is the total of all NOLs Schedule K, Question 14, is checked.
generated in prior years but not used Generally, a taxpayer with a trade or
to offset income (either as a carryback business must file Form 8990 to claim Cooperatives with total assets
or carryover) in a tax year prior to a deduction for business interest. In non-consolidated (or consolidated for
2022. Do not reduce the amount by addition, Form 8990 must be filed by all cooperatives and corporations
any NOL deduction reported on any taxpayer that owns an interest in a included within the consolidated tax
page 1, line 26a. partnership with current year, or prior group) of $10 million or more on the
year carryover, excess business last day of the tax year must file
Question 16 interest expense allocated from the Schedule M-3 (Form 1120). However,
If the cooperative had gross receipts partnership. see the instructions for Schedule M-1,
later. See the separate Instructions for
of at least $500 million in any 1 of the Exclusions from filing. A taxpayer Schedule M-3 (Form 1120) for
3 preceding tax years, complete Form is not required to file Form 8990 if the provisions that also affect Schedule L.
8991 and attach it to this return. For taxpayer is a small business taxpayer
this purpose, the cooperative's gross and does not have excess business If filing a consolidated return, report
receipts include the gross receipts of interest expense from a partnership. A total consolidated assets, liabilities,
all persons aggregated with the taxpayer is also not required to file and shareholder's equity for all
cooperative, as specified in section Form 8990 if the taxpayer only has cooperatives and corporations joining
59A(e)(3). See the Instructions for business interest expense from these in the return. See Consolidated return,
Form 8991 to determine if the excepted trades or businesses: earlier.
cooperative is subject to the base An electing real property trade or
•
erosion minimum tax. business, Line 1. Cash
• An electing farming business, or Include certificates of deposit as cash
• Certain utility businesses. on this line.

Instructions for Form 1120-C -25-

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Line 5. Investments Schedule M-3 (Form 1120) may Line 7. Tax-exempt Interest
Include on this line: voluntarily file Schedule M-3 instead Report any tax-exempt interest
• State and local government of Schedule M-1. received or accrued, including any
obligations, the interest on which is • Cooperatives that (a) are required exempt-interest dividends received as
excludable from gross income under to file Schedule M-3 (Form 1120) and a shareholder in a mutual fund or
section 103(a); and have less than $50 million total assets other RIC. Also, report this same
• Stock in a mutual fund or other RIC at the end of the tax year, or (b) are amount on Schedule K, Item 10.
that distributed exempt-interest not required to file Schedule M-3
dividends during the tax year of the (Form 1120) and voluntarily file Paperwork Reduction Act Notice.
cooperative. Schedule M-3 (Form 1120), must We ask for the information on this
either (i) complete Schedule M-3 form to carry out the Internal Revenue
Line 26. Adjustments to (Form 1120) entirely, or (ii) complete laws of the United States. You are
Shareholders' Equity Schedule M-3 (Form 1120) through required to give us the information.
Some examples of adjustments to Part I, and complete Form 1120, We need it to ensure that you are
report on this line include: Schedule M-1 instead of completing complying with these laws and to
• Unrealized gains and losses on Parts II and III of Schedule M-3 (Form allow us to figure and collect the right
securities held “available for sale.” 1120). If the cooperative chooses to amount of tax.
• Foreign currency translation complete Schedule M-1 instead of
adjustments. completing Parts II and III of You are not required to provide the
• The excess of additional pension Schedule M-3, the amount on information requested on a form that
liability over unrecognized prior Schedule M-1, line 1, must equal the is subject to the Paperwork Reduction
service cost. amount on Schedule M-3, Part I, Act unless the form displays a valid
• Guarantees of employee stock line 11. See the Instructions for OMB control number. Books or
(ESOP) debt. Schedule M-3 (Form 1120) for more records relating to a form or its
• Compensation related to employee information. instructions must be retained as long
as their contents may become
stock award plans. Line 5c. Travel and material in the administration of any
If the total adjustment to be entered Entertainment Internal Revenue law. Generally, tax
on line 26 is a negative amount, enter Include any of the following if returns and return information are
the amount in parentheses. applicable: confidential, as required by section
• Meal expenses not deductible 6103.
Schedule M-1. under section 274(n).
• Entertainment expenses not The time needed to complete and
Reconciliation of Income deductible under section 274(a). file this form will vary depending on
(Loss) per Books With • Qualified transportation fringes not individual circumstances. The
Income per Return deductible under section 274(a)(4). estimated burden for business
In completing Schedule M-1, the • Expenses for the use of an taxpayers filing this form is approved
following apply. entertainment facility. under OMB control number
• Cooperatives with total receipts • The part of business gifts over $25. 1545-0123 and is included in the
(page 1, line 1a plus lines 4 through 9) • Expenses of an individual over estimates shown in the instructions for
and total assets at the end of the tax $2,000, which are allocable to their business income tax return.
year less than $250,000 are not conventions on cruise ships. If you have comments concerning
required to complete Schedules L, • Employee achievement awards of the accuracy of these time estimates
M-1, and M-2 if the “Yes” box on non-tangible property or of tangible or suggestions for making this form
Schedule K, Question 14, is checked. property over $400 ($1,600 if part of a simpler, we would be happy to hear
• Cooperatives with total assets qualified plan). from you. You can send us comments
non-consolidated (or consolidated for • Nondeductible club dues. through IRS.gov/FormComments. Or
all cooperatives/corporations included • The part of luxury water travel write to the Internal Revenue Service,
with the tax consolidation group) of expenses not deductible under Tax Forms and Publications Division,
$10 million or more on the last day of section 274(m). 1111 Constitution Ave. NW, IR-6526,
the tax year must file Schedule M-3 • Expenses for travel as a form of Washington, DC 20224. Do not send
(Form 1120) instead of Schedule M-1. education. Form 1120-C to this address. Instead,
• A cooperative filing Form 1120-C • Other nondeductible expenses for see Where To File, earlier.
that is not required to file travel and entertainment.

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

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

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

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Index
 
                               Dividends  8                   Lobbying expenses, 
A                              Dividends and special             nondeductibility   15           Q
                                 deductions   17
Accounting methods   4                                                                           Qualified written notice of 
                               Dividends-received             M                                   allocation   21
Accounting period  5             deduction    20
                                                              Merchant Marine capital            Qualifying shipping activities, 
Address change   7             Domestic production               construction fund:               Income from    7
Advance payments     7           activities deduction 
Affiliated group 24              allocation   22                 Deduction for 
                                                                    contributions 16
Allocation of patronage and    Dues, membership and                                              R
  nonpatronage income and        other   15                   Minimum tax:
                                                                                                 Reconciliation of income (Sch 
  deductions  20                                                 Prior year, credit for 23        M-1)  26
Allocations to patrons:        E                                                                 Recordkeeping   5
  Elective 22                                                 N                                  Refund 17
  Recapture of elective        Electronic Federal Tax 
   allocation of credit to       Payment System               Name and address      6            Refundable credits      17
   patrons    23                 (EFTPS)    3                 Name change      7                 Related taxpayer 
  Recapture of required excess Employee benefit               Net operating loss  16 25,          transactions   9
   credit allocated to           programs     13              Nonaccrual experience              Rents (expense)  11
   patrons    23               Employer identification           method    8
  Required 22                    number (EIN)    7            Nonpatronage income       21       S
Amended return   7             Estimated tax  4                                                  Salaries and wages       11
Amortization  10                 Overpaid   17                O                                  Schedule:
Assembling the return   3        Payments     16              Other deductions:                   C 17
At-risk rules 15                 Penalty  4                      Amortization  14                 G 20
                               Extension of time to file 3       Depletion   14                   H 21
B                                                                Entertainment expenses    14     J 22
                               F
Backup withholding   17                                          Insurance premiums     14        K 24
Bad debts  11                  Final return 7                    Legal and professional           L 25
Balance sheets per books   25  Foreign person (defined)  24         fees   14                     M-1 26
Bond credits  23               Foreign tax credit 22             Organizational costs   14        M-3 (Form 1120)        7
Business start-up              Forms and publications, how       Reforestations costs   14        O 22
  expenses    10                 to get  2                       Repairs and maintenance      14 Section 1382, deductions and 
                                                                 Start-up costs  14               adjustments    15
C                              G                                 Supplies  14                    Section 1383 adjustment      17
Capital construction fund      General business credit   22      Travel expenses  14             Section 263A costs      9
  (See Merchant Marine capital General instructions  2           Utilities 14                    Shareholders' equity 
  construction fund)           Gross receipts   7             Other income     8                  adjustments    26
Charitable contributions   12  Gross rents and royalties 8    Other information   24             Signature 3
Closely held cooperatives  10                                 Other taxes:                       Specific instructions    6
Compensation of officers   11  I                                 Recapture    23
                                                              Overpaid estimated tax      17     T
Consolidated return  25        Identifying information 6
                                                                                                 Tax computation  22
Contributions to reduce debt   Income  7                      P                                  Tax issues, unresolved     1
  held by the public 2         Income from qualifying 
Contributions, charitable  12    shipping activities 7        Paid preparer authorization      3 Tax-exempt securities      26
Controlled group:              Initial return 7               Partnership income (loss)       14 Taxes and licenses      11
  Member of   22               Installment sales  8           Passive activity                   Taxpayer Advocate       1
Cost of goods sold   8         Interest:                         limitations  10                 Travel and entertainment     26
Credits:                         Income   8                   Patronage dividends       8 21,    Travel, meals, and 
  Foreign tax 22               Interest and penalties 4       Payment, depository methods         entertainment   14
  Form 2439   17               Interest due:                     of 3                            Trust fund recovery penalty    4
  Form 4136   17                 Late payment of tax 4        Penalties    17                    Type of cooperative      7
  General business   22        Interest expense   11             Late filing of return 4
  Recapture of 23              Interest expense (relating to     Late payment of tax    4        W
  Reducing expenses    10        section 263A)   9               Trust fund recovery penalty   4 When to file 2
                               Interest income:               Penalty:                           Where to file 2
D                                Tax-exempt   24 26,             Estimated tax  17               Who must file 2
Deductions 9                   Inventory:                        Late filing 4                   Who must sign   3
Deductions and adjustments       Section 263A uniform            Late payment   4                Worksheet:
  under section 1382    21       capitalization rules  9      Pension, profit-sharing, etc.,      Schedule C
                                                                 plans 13
                                                                                                 Written notice of allocation:
Depletion  14                                                 Per-unit retain allocations     8
Depository methods of tax      L                                                                  Nonqualified  21
                                                              Preparer, tax return     3
                                                                                                  Qualified 21
  payment  3                   Limitations on deductions   9, Principal business activity 
Depreciation  13                 12                              codes  27
Disclosure statement,                                         Private delivery services    2
  reportable transaction   5

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