2023 Instructions for Form 1120

Userid: CPM Schema: instrx Leadpct: 100% Pt. size: 9

Draft Ok to Print

AH XSL/XML

Fileid: … ions/i1120/2023/a/xml/cycle06/source (Init. & Date) _______

Page 1 of 32 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

2023

Instructions for Form 1120

U.S. Corporation Income Tax Return

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless

otherwise noted.

Contents Page

Future Developments ........................ 1

What’s New ............................... 1

Photographs of Missing Children ................ 1

The Taxpayer Advocate Service ................. 2

Direct Deposit of Refund ...................... 2

How To Make a Contribution To Reduce Debt Held

by the Public ........................... 2

How To Get Forms and Publications .............. 2

General Instructions ......................... 2

Purpose of Form ............................ 2

Who Must File ............................. 2

When To File .............................. 3

Where To File .............................. 4

Who Must Sign ............................. 4

Paid Preparer Authorization .................... 4

Assembling the Return ....................... 5

Tax Payments .............................. 5

Estimated Tax Payments ...................... 5

Interest and Penalties ........................ 6

Accounting Methods ......................... 6

Accounting Period .......................... 7

Rounding Off to Whole Dollars .................. 7

Recordkeeping ............................. 7

Other Forms and Statements That May Be

Required .............................. 7

Specific Instructions ......................... 8

Period Covered ............................ 8

Name and Address .......................... 8

Identifying Information ........................ 8

Employer Identification Number (EIN) ............. 9

Total Assets ............................... 9

Initial Return, Final Return, Name Change, or

Address Change ......................... 9

Income ................................. 10

Deductions .............................. 11

Schedule C. Dividends, Inclusions, and Special

Deductions ........................... 18

Schedule J. Tax Computation and Payment ....... 20

Schedule K. Other Information ................. 22

Schedule L. Balance Sheets per Books .......... 26

Schedule M-1. Reconciliation of Income (Loss) per

Books With Income per Return ............. 27

Schedule M-2. Analysis of Unappropriated

Retained Earnings per Books .............. 27

Principal Business Activity Codes .............. 29

Index ................................... 32

Future Developments

For the latest information about developments related to Form

1120 and its instructions, such as legislation enacted after they

were published, go to

IRS.gov/Form1120.

What’s New

Increase in penalty for failure to file. For tax returns required

to be filed in 2024, the minimum penalty for failure to file a return

that is more than 60 days late has increased to the smaller of the

tax due or $485. See

Late filing of return, later.

Electronically filed returns. The electronic-filing threshold for

corporate returns required to be filed on or after January 1, 2024,

has decreased to 10 or more returns. See Electronic Filing, later.

Deduction for certain energy efficient commercial building

property. For tax years beginning in 2023, corporations filing

Form 1120 and claiming the energy efficient commercial

buildings deduction should report the deduction on line 25. See

the instructions for line 25.

Expiration of 100% business meal expense deduction. The

temporary 100% business meal expenses deduction for food

and beverages provided by a restaurant does not apply to

amounts paid or incurred after 2022.

Corporate alternative minimum tax (CAMT). For tax years

beginning after 2022, certain corporations must determine

whether they are subject to the new CAMT and calculate CAMT

if applicable. See the instructions for Schedule J, line 3. Also,

see new

Schedule K, Question 29.

Elective payment election. Applicable entities and electing

taxpayers can elect to treat certain credits as elective payments.

Resulting overpayment may result in refunds. See the

instructions for

Schedule J, Part II, line 22. Also, see the

Instructions for Form 3800.

Relief from additions to tax for underpayments applicable

to the new corporate alternative minimum tax. For tax year

2023, the IRS will waive the penalty for failure to make estimated

tax payments for taxes attributable to a CAMT liability. Affected

corporations must still file the 2023 Form 2220, even if they owe

no estimated tax penalty. However, affected corporations may

exclude the CAMT tax liability when calculating the required

annual payment on Form 2220. Affected corporations must also

include an amount of estimated tax penalty on line 34 of Form

1120 (or other appropriate line of the corporation's income tax

return), even if that amount is zero. Failure to follow these

instructions could result in affected corporations receiving a

penalty notice that will require an abatement request to apply the

relief provided by Notice 2023-42. See Notice 2023-42, 2023-26

I.R.B. 1085, available at

IRS.gov/irb/

2023-26_IRB#NOT-2023-42. Also, see the instructions for

line 34.

Photographs of

Missing Children

The Internal Revenue Service is a proud partner with the

National Center for Missing & Exploited Children® (NCMEC).

Photographs of missing children selected by the Center may

Jan 17, 2024

Cat. No. 11455T

Page 2 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

appear in instructions on pages that would otherwise be blank.

You can help bring these children home by looking at the

photographs and calling 1-800-THE-LOST (1-800-843-5678) if

you recognize a child.

The Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is an independent

organization within the IRS that helps taxpayers and protects

taxpayer rights. TAS's job is to ensure that every taxpayer is

treated fairly and knows and understands their rights under the

Taxpayer Bill of Rights.

As a taxpayer, the corporation has rights that the IRS must

abide by in its dealings with the corporation. TAS can help the

corporation if:

•

A problem is causing financial difficulty for the business;

•

The business is facing an immediate threat of adverse action;

•

The corporation has tried repeatedly to contact the IRS but no

one has responded, or the IRS hasn't responded by the date

promised.

TAS has offices in every state, the District of Columbia, and

Puerto Rico. Local advocates' numbers are in their local

directories and at TaxpayerAdvocate.IRS.gov. The corporation

can also call TAS at 877-777-4778.

TAS also works to resolve large-scale or systemic problems

that affect many taxpayers. If the corporation knows of one of

these broad issues, please report it to TAS through the Systemic

Advocacy Management System at IRS.gov/SAMS.

For more information, go to IRS.gov/Advocate.

Direct Deposit of Refund

To request a direct deposit of the corporation's income tax refund

into an account at a U.S. bank or other financial institution, attach

Form 8050, Direct Deposit of Corporate Tax Refund. See the

instructions for line 37.

How To Make a Contribution To

Reduce Debt Held by the Public

To help reduce debt held by the public, make a check payable to

“Bureau of the Fiscal Service.” Send it to:

Bureau of the Fiscal Service

Attn: Dept G

P.O. Box 2188

Parkersburg, WV 26106-2188

Or, enclose the check with the corporation's income tax return. In

the memo section of the check, make a note that it is a gift to

reduce the debt held by the public. For information on how to

make this type of contribution online, go to

www.treasurydirect.gov and click on “How to Make a

Contribution to Reduce the Debt.”

Do not add the contributions to any tax the corporation may

owe. See the instructions for line 35 for details on how to pay any

tax the corporation owes. Contributions to reduce debt held by

the public are deductible subject to the rules and limitations for

charitable contributions.

How To Get Forms

and Publications

Internet. You can access the IRS website 24 hours a day, 7

days a week, at IRS.gov to:

•

Download forms, instructions, and publications;

•

Order IRS products online;

•

Research your tax questions online;

•

Search publications online by topic or keyword;

•

View Internal Revenue Bulletins (IRBs) published in recent

years; and

•

Tax forms and publications. The corporation can view, print,

or download all of the forms and publications it may need on

IRS.gov/FormsPubs. Otherwise, the corporation can go to

IRS.gov/OrderForms to place an order and have forms mailed to

it.

General Instructions

Purpose of Form

Use Form 1120, U.S. Corporation Income Tax Return, to report

the income, gains, losses, deductions, credits, and to figure the

income tax liability of a corporation.

Who Must File

Unless exempt under section 501, all domestic corporations

(including corporations in bankruptcy) must file an income tax

return whether or not they have taxable income. Domestic

corporations must file Form 1120, unless they are required, or

elect to file a special return. See

Special Returns for Certain

Organizations, later.

Entities electing to be taxed as corporations. A domestic

entity electing to be classified as an association taxable as a

corporation must file Form 1120, unless it is required to or elects

to file a special return listed under

Special Returns for Certain

Organizations. The entity must also file Form 8832, Entity

Classification Election, and attach a copy of Form 8832 to Form

1120 (or the applicable return) for the year of the election. For

more information, see Form 8832 and its instructions.

Limited liability companies (LLC). If an entity with more than

one owner was formed as an LLC under state law, it is generally

treated as a partnership for federal income tax purposes and

files Form 1065, U.S. Return of Partnership Income. Generally, a

single-member LLC is disregarded as an entity separate from its

owner and reports its income and deductions on its owner's

federal income tax return. The LLC can file a Form 1120 only if it

has filed Form 8832 to elect to be treated as an association

taxable as a corporation. For more information about LLCs, see

Pub. 3402, Taxation of Limited Liability Companies.

Corporations engaged in farming. A corporation (other than

a corporation that is a subchapter T cooperative) that engages in

farming should use Form 1120 to report the income (loss) from

such activities. Enter the income and deductions of the

corporation according to the instructions for lines 1 through 10

and 12 through 29.

Ownership interest in a Financial Asset Securitization In-

vestment Trust (FASIT). Special rules apply to a FASIT in

existence on October 22, 2004, to the extent that regular

interests issued by the FASIT before October 22, 2004, continue

to remain outstanding in accordance with their original terms.

If a corporation holds an ownership interest in a FASIT to

which these special rules apply, it must report all items of

income, gain, deductions, losses, and credits on the

corporation's income tax return (except as provided in section

860H). Show a breakdown of the items on an attached

statement. For more information, see sections 860H and 860L

(repealed with certain exceptions).

Foreign-owned domestic disregarded entities. If a foreign

person, including a foreign corporation, wholly owns a domestic

disregarded entity (DE), the domestic DE is treated as a

domestic corporation separate from its owner (the foreign

corporation) for the limited purposes of the requirements under

Instructions for Form 1120

Page 3 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

section 6038A that apply to 25% foreign-owned domestic

corporations. While a DE is not required to file a U.S. income tax

return, a DE covered by these rules is required to file a pro forma

Form 1120 with Form 5472 attached by the due date (including

extensions) of the return. See the Instructions for Form 5472 for

additional information and coordination with Form 5472 reporting

by the domestic DE.

Qualified opportunity fund. To certify as a qualified

opportunity fund (QOF), the corporation must file Form 1120 and

attach Form 8996, even if the corporation had no income or

expenses to report. See

Schedule K, Question 25, later. Also,

see the Instructions for Form 8996.

Qualified opportunity investment. If the corporation held a

qualified investment in a QOF at any time during the year, the

corporation must file its return with Form 8997 attached. See the

instructions for Form 8997.

Special Returns for

Certain Organizations

Instead of filing Form 1120, certain organizations, as shown below, file special

returns.

If the organization is a: File Form

▼ ▼

Exempt organization with unrelated

trade or business income

990-T

Religious or apostolic organization

exempt under section 501(d)

1065

Entity formed as a limited liability

company under state law and treated

as a partnership for federal income tax

purposes

1065

Subchapter T cooperative association

(including a farmers' cooperative)

1120-C

Entity that elects to be treated as a real

estate mortgage investment conduit

(REMIC) under section 860D

1066

Interest charge domestic international

sales corporation (section 992)

1120-IC-DISC

Foreign corporation (other than life or

property and casualty insurance

company filing Form 1120-L or Form

1120-PC)

1120-F

Foreign sales corporation (section 922) 1120-FSC

Condominium management,

residential real estate management, or

timeshare association that elects to be

treated as a homeowners association

under section 528

1120-H

Life insurance company

(section 801)

1120-L

Fund set up to pay for nuclear

decommissioning costs (section 468A)

1120-ND

Property and casualty insurance

company

(section 831)

1120-PC

Political organization

(section 527)

1120-POL

Real estate investment trust (section

856)

1120-REIT

Regulated investment company

(section 851)

1120-RIC

S corporation (section 1361) 1120-S

Settlement fund

(section 468B)

1120-SF

Electronic Filing

Corporations can generally electronically file (e-file) Form 1120,

related forms, schedules, and attachments; Form 7004

(automatic extension of time to file); and Forms 940, 941, and

944 (employment tax returns). If there is a balance due, the

corporation can authorize an electronic funds withdrawal while

e-filing. Form 1099 and other information returns can also be

electronically filed. The option to e-file does not, however, apply

to certain returns.

For returns filed on or after January 1, 2024, corporations that

file 10 or more returns are required to e-file Form 1120. See

Regulations section 301.6011-5. However, these corporations

can request a waiver of the electronic filing requirements.

For more information on e-filing, see E-file for Business and

Self-employed Taxpayers on IRS.gov.

Exclusions From Electronic Filing

Waivers. The IRS may waive the electronic filing rules if the

corporation demonstrates that a hardship would result if it were

required to file its return electronically. A corporation interested in

requesting a waiver of the mandatory electronic filing

requirement must file a written request, and request one in the

manner prescribed by the IRS. All written requests for waivers

should be mailed to:

Internal Revenue Service

Ogden Submission Processing Center

Attn: Form 1120 e-file Waiver Request

Mail Stop 1057

Ogden, UT 84201

If using a delivery service, requests for waivers should be mailed

to:

Internal Revenue Service

Ogden Submission Processing Center

Attn: Form 1120 e-file Waiver Request

Mail Stop 1057

1973 N. Rulon White Blvd.

Ogden, UT 84404

Waiver requests can also be faxed to 877-477-0575. Contact the

e-Help Desk at 866-255-0654 for questions regarding the waiver

procedures or process.

Exemptions. The IRS may provide exemptions from the

requirements to electronically file. If using the technology

required to electronically file conflicts with religious beliefs, the

corporation is exempt from the requirement. Clearly indicate the

exemption on the corporation’s return. Write "Religious

Exemption" at the top of Form 1120. File the corporation's return

at the applicable IRS address. See

Where To File, later. For

more information see Notice 2024-18.

When To File

Generally, a corporation must file its income tax return by the

15th day of the 4th month after the end of its tax year. A new

corporation filing a short-period return must generally file by the

15th day of the 4th month after the short period ends. A

Instructions for Form 1120

Page 4 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

corporation that has dissolved must generally file by the 15th day

of the 4th month after the date it dissolved.

However, a corporation with a fiscal tax year ending June 30

must file by the 15th day of the 3rd month after the end of its tax

year. A corporation with a short tax year ending anytime in June

will be treated as if the short year ended on June 30, and must

file by the 15th day of the 3rd month after the end of its tax year.

If the due date falls on a Saturday, Sunday, or legal holiday,

the corporation can file on the next business day.

Private Delivery Services

Corporations can use certain private delivery services (PDS)

designated by the IRS to meet the “timely mailing as timely filing”

rule for tax returns. Go to

IRS.gov/PDS.

The PDS can tell you how to get written proof of the mailing

date.

For the IRS mailing address to use if you’re using a PDS, go

IRS.gov/PDSstreetAddresses.

Private delivery services can't deliver items to P.O.

boxes. You must use the U.S. Postal Service to mail any

item to an IRS P.O. box address.

Extension of Time To File

File Form 7004, Application for Automatic Extension of Time To

File Certain Business Income Tax, Information, and Other

Returns, to request an extension of time to file. Generally, the

corporation must file Form 7004 by the regular due date of the

return. See the Instructions for Form 7004.

Who Must Sign

The return must be signed and dated by:

•

The president, vice president, treasurer, assistant treasurer,

chief accounting officer; or

•

Any other corporate officer (such as tax officer) authorized to

sign.

If a return is filed on behalf of a corporation by a receiver,

trustee, or assignee, the fiduciary must sign the return, instead of

CAUTION

the corporate officer. Returns and forms signed by a receiver or

trustee in bankruptcy on behalf of a corporation must be

accompanied by a copy of the order or instructions of the court

authorizing signing of the return or form.

Paid Preparer Use Only section. If an employee of the

corporation completes Form 1120, the paid preparer section

should remain blank. Anyone who prepares Form 1120 but does

not charge the corporation should not complete that section.

Generally, anyone who is paid to prepare the return must sign

and complete the section.

The paid preparer must complete the required preparer

information and:

•

Sign the return in the space provided for the preparer's

signature,

•

Include their Preparer Tax Identification Number (PTIN), and

•

Give a copy of the return to the taxpayer.

A paid preparer may sign original or amended returns by

rubber stamp, mechanical device, or computer software

program.

Paid Preparer Authorization

If the corporation wants to allow the IRS to discuss its 2023 tax

return with the paid preparer who signed it, check the “Yes” box

in the signature area of the return. This authorization applies only

to the individual whose signature appears in the “Paid Preparer

Use Only” section of the return. It does not apply to the firm, if

any, shown in that section.

If the “Yes” box is checked, the corporation is authorizing the

IRS to call the paid preparer to answer any questions that may

arise during the processing of its return. The corporation is also

authorizing the paid preparer to:

•

Give the IRS any information that is missing from the return;

•

Call the IRS for information about the processing of the return

or the status of any related refund or payment(s); and

•

Respond to certain IRS notices about math errors, offsets,

and return preparation.

TIP

Where To File

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

If the corporation's principal business,

office, or agency is located in:

And the total assets at the end of

the tax year are: Use the following address:

Connecticut, Delaware, District of Columbia,

Georgia, Illinois, Indiana, Kentucky, Maine,

Maryland, Massachusetts, Michigan, New

Hampshire, New Jersey, New York, North

Carolina, Ohio, Pennsylvania, Rhode Island,

South Carolina, Tennessee, Vermont, Virginia,

West Virginia, Wisconsin

Less than $10 million and

Schedule M-3 is not filed

Department of the Treasury

Internal Revenue Service Center

Kansas City, MO 64999-0012

$10 million or more, or

less than $10 million and

Schedule M-3 is filed

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0012

Alabama, Alaska, Arizona, Arkansas, California,

Colorado, Florida, Hawaii, Idaho, Iowa, Kansas,

Louisiana, Minnesota, Mississippi, Missouri,

Montana, Nebraska, Nevada, New Mexico,

North Dakota, Oklahoma, Oregon, South

Dakota, Texas, Utah, Washington, Wyoming

Any amount

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0012

A foreign country or U.S. territory

Any amount

Internal Revenue Service Center

P.O. Box 409101

Ogden, UT 84409

A group of corporations with members located in more than one service center area will often keep all the books and records at the principal office of

the managing corporation. In this case, the tax returns of the corporations may be filed with the service center for the area in which the principal

office of the managing corporation is located.

Instructions for Form 1120

Page 5 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

The corporation is not authorizing the paid preparer to receive

any refund check, bind the corporation to anything (including any

additional tax liability), or otherwise represent the corporation

before the IRS.

The authorization will automatically end no later than the due

date (excluding extensions) for filing the corporation's 2024 tax

return. If the corporation wants to expand the paid preparer's

authorization or revoke the authorization before it ends, see Pub.

947, Practice Before the IRS and Power of Attorney.

Assembling the Return

To ensure that the corporation's tax return is correctly processed,

attach all schedules and other forms after page 6 of Form 1120

in the following order.

1. Schedule N (Form 1120).

2. Schedule D (Form 1120).

3. Form 4797.

4. Form 8949.

5. Form 8996.

6. Form 4626.

7. Form 8050.

8. Form 1125-A.

9. Form 4136.

10.

Form 8978.

11.

Form 965-B.

12.

Form 8941.

13.

Form 3800.

14.

Form 8997.

15.

Form 6252.

16.

Form 8936, Schedule A.

17.

Additional schedules in alphabetical order.

18.

Additional forms in numerical order.

19.

Supporting statements and attachments.

Complete every applicable entry space on Form 1120. Do not

enter “See Attached” or “Available Upon Request” instead of

completing the entry spaces. If more space is needed on the

forms or schedules, attach separate sheets using the same size

and format as the printed forms.

If there are supporting statements and attachments, arrange

them in the same order as the schedules or forms they support

and attach them last. Show the totals on the printed forms. Enter

the corporation's name and EIN on each supporting statement or

attachment.

Note. If the corporation had tax withheld under Chapter 3 or 4 of

the Internal Revenue Code and received a Form 1042-S, Form

8805, or Form 8288-A showing the amount of income tax

withheld, attach such form(s) to the corporation’s income tax

return to claim a withholding credit. The corporation should

report the tax withheld on Schedule J, Part II, line 20z. See the

instructions for Schedule J, Part II, Line 20z.

Tax Payments

Generally, the corporation must pay any tax due in full no later

than the due date for filing its tax return (not including

extensions). See the instructions for line 35. If the due date falls

on a Saturday, Sunday, or legal holiday, the payment is due on

the next day that isn't a Saturday, Sunday, or legal holiday.

Electronic Deposit Requirement

Corporations must use electronic funds transfer to make all

federal tax deposits (such as deposits of employment, excise,

and corporate income tax). Generally, electronic funds transfers

are made using the Electronic Federal Tax Payment System

(EFTPS). However, if the corporation does not want to use

EFTPS, it can arrange for its tax professional, financial

institution, payroll service, or other trusted third party to make

deposits on its behalf. Also, it may arrange for its financial

institution to submit a same-day payment (discussed below) on

its behalf. EFTPS is a free service provided by the Department of

the Treasury. Services provided by a tax professional, financial

institution, payroll service, or other third party may have a fee.

To get more information about EFTPS or to enroll in EFTPS,

visit EFTPS.gov or call 800-555-4477. To contact EFTPS using

the Telecommunications Relay Services (TRS), for people who

are deaf, hard of hearing, or have a speech disability, dial 711

and provide the TRS assistant the 800-555-4477 number above

or 800-733-4829.

Depositing on time. For any deposit made by EFTPS to be on

time, the corporation must submit the deposit by 8 p.m. Eastern

time the day before the date the deposit is due. If the corporation

uses a third party to make deposits on its behalf, they may have

different cutoff times.

Same-day wire payment option. If the corporation fails to

submit a deposit transaction on EFTPS by 8 p.m. Eastern time

the day before the date a deposit is due, it can still make its

deposit on time by using the Federal Tax Collection Service

(FTCS). To use the same-day wire payment method, the

corporation will need to make arrangements with its financial

institution ahead of time regarding availability, deadlines, and

costs. Financial institutions may charge a fee for payments made

this way. To learn more about the information the corporation will

need to provide to its financial institution to make a same-day

wire payment, go to

IRS.gov/SameDayWire.

Estimated Tax Payments

Generally, the following rules apply to the corporation's

payments of estimated tax.

•

The corporation must make installment payments of

estimated tax if it expects its total tax for the year (less applicable

credits) to be $500 or more.

•

The installments are due by the 15th day of the 4th, 6th, 9th,

and 12th months of the tax year. If any date falls on a Saturday,

Sunday, or legal holiday, the installment is due on the next

regular business day.

•

The corporation must use electronic funds transfer to make

installment payments of estimated tax.

•

If, after the corporation figures and deposits estimated tax, it

finds that its tax liability for the year will be more or less than

originally estimated, it may have to refigure its required

installments. If earlier installments were underpaid, the

corporation may owe a penalty. See Estimated tax penalty

below.

•

If the corporation overpaid estimated tax, it may be able to get

a quick refund by filing Form 4466, Corporation Application for

Quick Refund of Overpayment of Estimated Tax. See the

instructions for Schedule J, Part II, line 15.

See section 6655 and Pub. 542, Corporations, for more

information on how to figure estimated taxes.

Estimated tax penalty. A corporation that does not make

estimated tax payments when due may be subject to an

underpayment penalty for the period of underpayment.

Generally, a corporation is subject to the penalty if its tax liability

is $500 or more and it did not timely pay at least the smaller of:

•

Its tax liability for the current year, or

•

Its prior year's tax.

Instructions for Form 1120

Page 6 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Use Form 2220, Underpayment of Estimated Tax by

Corporations, to see if the corporation owes a penalty and to

figure the amount of the penalty. If Form 2220 is completed,

enter the penalty on line 34. See the instructions for line 34. Also

see Relief from additions to tax for underpayments applicable to

the new corporate alternative minimum tax (CAMT), earlier.

Interest and Penalties

If the corporation receives a notice about penalties after

it files its return, send the IRS an explanation and we will

determine if the corporation meets reasonable-cause

criteria.

Do not attach an explanation when the corporation's

return is filed.

Interest. Interest is charged on taxes paid late even if an

extension of time to file is granted. Interest is also charged on

penalties imposed for failure to file, negligence, fraud, substantial

valuation misstatements, substantial understatements of tax,

and reportable transaction understatements from the due date

(including extensions) to the date of payment. The interest

charge is figured at a rate determined under section 6621.

Late filing of return. A corporation that does not file its tax

return by the due date, including extensions, may be penalized

5% of the unpaid tax for each month or part of a month the return

is late, up to a maximum of 25% of the unpaid tax. The minimum

penalty for a tax return required to be filed in 2024 that is more

than 60 days late is the smaller of the tax due or $485. The

penalty will not be imposed if the corporation can show that the

failure to file on time was due to reasonable cause. See

Caution,

earlier.

Late payment of tax. A corporation that does not pay the tax

when due may generally be penalized

/2 of 1% of the unpaid tax

for each month or part of a month the tax is not paid, up to a

maximum of 25% of the unpaid tax. See

Caution, earlier.

Trust fund recovery penalty. This penalty may apply if certain

excise, income, social security, and Medicare taxes that must be

collected or withheld are not collected or withheld, or these taxes

are not paid. These taxes are generally reported on:

•

Form 720, Quarterly Federal Excise Tax Return;

•

Form 941, Employer's QUARTERLY Federal Tax Return;

•

Form 943, Employer's Annual Federal Tax Return for

Agricultural Employees;

•

Form 944, Employer's ANNUAL Federal Tax Return; or

•

Form 945, Annual Return of Withheld Federal Income Tax.

The trust fund recovery penalty may be imposed on all

persons who are determined by the IRS to have been

responsible for collecting, accounting for, or paying over these

taxes, and who acted willfully in not doing so. The penalty is

equal to the full amount of the unpaid trust fund tax. See the

Instructions for Form 720, Pub. 15 (Circular E), Employer's Tax

Guide, or Pub. 51 (Circular A), Agricultural Employer's Tax

Guide, for details, including the definition of responsible persons.

Note. The trust fund recovery penalty will not apply to any

amount of trust fund taxes an employer holds back in anticipation

of the credit for qualified sick and family leave wages or the

employee retention credit that they are entitled to. See Pub. 15 or

Pub. 51 for more information.

Other penalties. Other penalties can be imposed for

negligence, substantial understatement of tax, reportable

transaction understatements, and fraud. See sections 6662,

6662A, and 6663.

Accounting Methods

Figure taxable income using the method of accounting regularly

used in keeping the corporation's books and records. In all

CAUTION

cases, the method used must clearly show taxable income.

Permissible methods include cash, accrual, or any other method

authorized by the Internal Revenue Code.

Generally, the following rules apply. For more information, see

Pub. 538, Accounting Periods and Methods.

•

A corporation, or a partnership that has a corporation as a

partner, cannot use the cash method of accounting unless it is a

small business taxpayer (defined later). A tax shelter (defined in

section 448(d)(3)) may never use the cash method. See sections

448(a)(1) through (a)(3). However, see

Nonaccrual experience

method for service providers in the instructions for line 1a.

•

Unless it is a small business taxpayer (defined below), a

corporation must use an accrual method for sales and

purchases of inventory items. See the instructions for Form

1125-A.

•

A corporation engaged in farming must use an accrual

method. For exceptions, see section 447 and Pub. 225.

•

Special rules apply to long-term contracts. See section 460.

•

Dealers in securities must use the mark-to-market accounting

method. Dealers in commodities and traders in securities and

commodities can elect to use the mark-to-market accounting

method. See section 475.

Small business taxpayer. For tax years beginning in 2023, a

corporation qualifies as a small business taxpayer if (a) it has

average annual gross receipts of $29 million or less for the 3

prior tax years, and (b) it is not a tax shelter (as defined in

section 448(d)(3)).

A small business taxpayer can account for inventory by (a)

treating the inventory as non-incidental materials and supplies,

or (b) conforming to its treatment of inventory in an applicable

financial statement (as defined in section 451(b)(3)). If it does

not have an applicable financial statement, it can use the method

of accounting used in its books and records prepared according

to its accounting procedures.

Change in accounting method. Generally, the corporation

must get IRS consent to change either an overall method of

accounting or the accounting treatment of any material item for

income tax purposes. To obtain consent, the corporation must

generally file Form 3115, Application for Change in Accounting

Method, during the tax year for which the change is requested.

See the Instructions for Form 3115 and Pub. 538 for more

information and exceptions. Also see the Instructions for Form

3115 for procedures that may apply for obtaining automatic

consent to change certain methods of accounting,

non-automatic change procedures, and reduced Form 3115

filing requirements.

Section 481(a) adjustment. If the corporation's taxable

income for the current tax year is figured under a method of

accounting different from the method used in the preceding tax

year, the corporation may have to make an adjustment under

section 481(a) to prevent amounts of income or expense from

being duplicated or omitted. The section 481(a) adjustment

period is generally 1 year for a net negative adjustment and 4

years for a net positive adjustment. For an eligible terminated S

corporation, the section 481(a) adjustment period is generally 6

years for a negative or positive adjustment that is attributable to

the S corporation's revocation of its election under section

1362(a) after December 21, 2017, and before December 22,

2019. See section 481(d). Also, see the Instructions for Form

3115.

Exceptions to the general section 481(a) adjustment period

may apply. Also, in some cases, a corporation can elect to

modify the section 481(a) adjustment period. The corporation

may have to complete the appropriate lines of Form 3115 to

make an election. See the Instructions for Form 3115 for more

information and exceptions.

Instructions for Form 1120

Page 7 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

If the net section 481(a) adjustment is positive, report the

ratable portion on Form 1120, line 10, as other income. If the net

section 481(a) adjustment is negative, report the ratable portion

on line 26 as a deduction.

Accounting Period

A corporation must figure its taxable income on the basis of a tax

year. A tax year is the annual accounting period a corporation

uses to keep its records and report its income and expenses.

Generally, corporations can use a calendar year or a fiscal year.

Personal service corporations, however, must use a calendar

year unless they meet one of the exceptions discussed later

under

Personal Service Corporation.

Change of tax year. Generally, a corporation, including a

personal service corporation, must get the consent of the IRS

before changing its tax year by filing Form 1128, Application To

Adopt, Change, or Retain a Tax Year. However, exceptions may

apply. See the Instructions for Form 1128 and Pub. 538 for more

information.

Rounding Off to

Whole Dollars

The corporation may enter decimal points and cents when

completing its return. However, the corporation should round off

cents to whole dollars on its return, forms, and schedules to

make completing its return easier. The corporation must either

round off all amounts on its return to whole dollars, or use cents

for all amounts. To round, drop amounts under 50 cents and

increase amounts from 50 to 99 cents to the next dollar. For

example, $8.40 rounds to $8 and $8.50 rounds to $9.

If two or more amounts must be added to figure the amount to

enter on a line, include cents when adding the amounts and

round off only the total.

Recordkeeping

Keep the corporation's records for as long as they may be

needed for the administration of any provision of the Internal

Revenue Code. Usually, records that support an item of income,

deduction, or credit on the return must be kept for 3 years from

the date the return is due or filed, whichever is later. Keep

records that verify the corporation's basis in property for as long

as they are needed to figure the basis of the original or

replacement property.

The corporation should keep copies of all filed returns. They

help in preparing future and amended returns and in the

calculation of earnings and profits.

Other Forms and Statements That

May Be Required

Amended return. Use Form 1120-X, Amended U.S.

Corporation Income Tax Return, to correct a previously filed

Form 1120.

Reportable transaction disclosure statement. Disclose

information for each reportable transaction in which the

corporation participated. Form 8886, Reportable Transaction

Disclosure Statement, must be filed for each tax year that the

federal income tax liability of the corporation is affected by its

participation in the transaction. The following are reportable

transactions.

1. Any listed transaction, which is a transaction that is the

same as or substantially similar to one of the types of

transactions that the IRS has determined to be a tax avoidance

transaction and identified by notice, regulation, or other

published guidance as a listed transaction.

Any transaction offered under conditions of confidentiality

for which the corporation (or a related party) paid an advisor a

fee of at least $250,000.

3. Certain transactions for which the corporation (or a

related party) has contractual protection against disallowance of

the tax benefits.

4. Certain transactions resulting in a loss of at least $10

million in any single year or $20 million in any combination of

years.

5. Any transaction identified by the IRS by notice, regulation,

or other published guidance as a “transaction of interest.”

For more information, see Regulations section 1.6011-4.

Also, see the Instructions for Form 8886.

Penalties. The corporation may have to pay a penalty if it is

required to disclose a reportable transaction under section 6011

and fails to properly complete and file Form 8886. Penalties may

also apply under section 6707A if the corporation fails to file

Form 8886 with its corporate return, fails to provide a copy of

Form 8886 to the Office of Tax Shelter Analysis (OTSA), or files a

form that fails to include all the information required (or includes

incorrect information). Other penalties, such as an

accuracy-related penalty under section 6662A, may also apply.

See the Instructions for Form 8886 for details on these and other

penalties.

Reportable transactions by material advisors. Material

advisors to any reportable transaction must disclose certain

information about the reportable transaction by filing Form 8918

with the IRS. For details, see the Instructions for Form 8918.

Transfers to a corporation controlled by the transferor.

Every significant transferor (as defined in Regulations section

1.351-3(d)(1)) that receives stock of a corporation in exchange

for property in a nonrecognition event must include the

statement required by Regulations section 1.351-3(a) on or with

the transferor's tax return for the tax year of the exchange. The

transferee corporation must include the statement required by

Regulations section 1.351-3(b) on or with its return for the tax

year of the exchange, unless all the required information is

included in any statement(s) provided by a significant transferor

that is attached to the same return for the same section 351

exchange. If the transferor or transferee corporation is a

controlled foreign corporation (CFC), each U.S. shareholder

(within the meaning of section 951(b)) must include the required

statement on or with its return.

Distributions under section 355. Every corporation that

makes a distribution of stock or securities of a controlled

corporation, as described in section 355 (or so much of section

356 as it relates to section 355), must include the statement

required by Regulations section 1.355-5(a) on or with its return

for the year of the distribution. A significant distributee (as

defined in Regulations section 1.355-5(c)) that receives stock or

securities of a controlled corporation must include the statement

required by Regulations section 1.355-5(b) on or with its return

for the year of receipt. If the distributing or distributee corporation

is a CFC, each U.S. shareholder (within the meaning of section

951(b)) must include the statement on or with its return.

Dual consolidated losses. If a domestic corporation incurs a

dual consolidated loss (as defined in Regulations section

1.1503(d)-1(b)(5)), the corporation (or consolidated group) may

need to attach a domestic use agreement and/or an annual

certification, as provided in Regulations section 1.1503(d)-6(d)

and (g).

Election to reduce basis under section 362(e)(2)(C). If

property is transferred to a corporation subject to section 362(e)

(2), the transferor and the transferee corporation may elect,

under section 362(e)(2)(C), to reduce the transferor's basis in

the stock received instead of reducing the transferee

Instructions for Form 1120

Page 8 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

corporation's basis in the property transferred. Once made, the

election is irrevocable. For more information, see section 362(e)

(2) and Regulations section 1.362-4. If an election is made, a

statement must be filed in accordance with Regulations section

1.362-4(d)(3).

Annual information reporting by specified domestic enti-

ties under section 6038D. Certain domestic corporations that

are formed or availed of to hold specified foreign financial assets

(“specified domestic entities”) must file Form 8938. Form 8938

must be filed each year the value of the corporation's specified

foreign financial assets is more than $50,000 on the last day of

the tax year or more than $75,000 at any time during the tax

year. For more information on domestic corporations that are

specified domestic entities and the types of foreign financial

assets that must be reported, see the Instructions for Form 8938,

generally, and in particular,

Who Must File, Specified Domestic

Entity, Specified Foreign Financial Assets, Interests in Specified

Foreign Financial Assets, Assets Not Required To Be Reported,

and Exceptions to Reporting.

In addition, a domestic corporation required to file Form 8938

with its Form 1120 for the tax year should check “Yes” to

Schedule N (Form 1120), Question 8, and also include that

schedule with its Form 1120.

Form 8975. Certain U.S. persons that are the ultimate parent

entity of a U.S. multinational enterprise group with annual

revenue for the preceding reporting period of $850 million or

more are required to file Form 8975, Country-by-Country Report.

Form 8975 and Schedule A (Form 8975) must be filed with the

income tax return of the ultimate parent entity of a U.S.

multinational enterprise group for the tax year in or within which

the reporting period covered by Form 8975 ends. For more

information, see Form 8975, Schedule A (Form 8975) and the

Instructions for Form 8975, and Schedule A (Form 8975).

Paycheck Protection Program (PPP) loans. A corporation

that had tax-exempt income resulting from the forgiveness of a

PPP loan should attach a statement to its return reporting each

tax year for which the corporation is applying Rev. Proc.

2021-48, sections 3.01(1), (2), or (3). Any statement for the

current tax year should include the following information, for

each PPP loan:

1. The corporation's name, address, and EIN;

2. A statement that the corporation is applying or applied

section 3.01(1), (2), or (3) of Rev. Proc. 2021-48, and for what

tax year, as applicable;

3. The amount of tax-exempt income from forgiveness of the

PPP loan that the corporation is treating as received or accrued

and for which tax year; and

4. Whether forgiveness of the PPP loan has been granted as

of the date the return is filed.

A corporation that reported tax-exempt income from the

forgiveness of a PPP loan on its 2020 return, the timing of which

corresponds to one of the options presented in Rev. Proc.

2021-48, need not file an amended return solely to attach the

statement that is described in these instructions.

If a corporation treats tax-exempt income resulting from a

PPP loan as received or accrued prior to when forgiveness of the

PPP loan is granted and the amount of forgiveness granted is

less than the amount of tax-exempt income that was previously

treated as received or accrued, the corporation should make a

prior-period adjustment on Schedule M-2 for the tax year in

which the corporation receives notice that the PPP loan was not

fully forgiven. See the instructions for

Schedule M-2 for more

details.

Other forms and statements. See Pub. 542, Corporations, for

a list of other forms and statements a corporation may need to

file in addition to the forms and statements discussed throughout

these instructions.

Specific Instructions

Period Covered

File the 2023 return for calendar year 2023 and fiscal years that

begin in 2023 and end in 2024. For a fiscal or short tax year

return, fill in the tax year space at the top of the form.

The 2023 Form 1120 can also be used if:

•

The corporation has a tax year of less than 12 months that

begins and ends in 2024, and

•

The 2024 Form 1120 is not available at the time the

corporation is required to file its return.

The corporation must show its 2024 tax year on the 2023 Form

1120 and take into account any tax law changes that are

effective for tax years beginning after December 31, 2023.

Name and Address

Enter the corporation's true name (as set forth in the charter or

other legal document creating it), address, and EIN on the

appropriate lines. Enter the address of the corporation's principal

office or place of business. Include the suite, room, or other unit

number after the street address. If the post office does not

deliver mail to the street address and the corporation has a P.O.

box, show the box number instead.

Note. Do not use the address of the registered agent for the

state in which the corporation is incorporated. For example, if a

business is incorporated in Delaware or Nevada and the

corporation's principal office is located in Little Rock, Arkansas,

the corporation should enter the Little Rock address.

If the corporation receives its mail in care of a third party

(such as an accountant or an attorney), enter on the street

address line “C/O” followed by the third party's name and street

address or P.O. box.

If the corporation has a foreign address, include the city or

town, state or province, country, and foreign postal code. Do not

abbreviate the country name. Follow the country's practice for

entering the name of the state or province and postal code.

Item A. Identifying Information

Consolidated Return

Corporations filing a consolidated return must check Item A,

box 1a, and attach Form 851, Affiliations Schedule, and other

supporting statements to the return. Also, for the first year a

subsidiary corporation is being included in a consolidated return,

attach Form 1122 to the parent's consolidated return. Attach a

separate Form 1122 for each new subsidiary being included in

the consolidated return.

File supporting statements for each corporation included in

the consolidated return. Do not use Form 1120 as a supporting

statement. On the supporting statement, use columns to show

the following, both before and after adjustments.

1. Items of gross income and deductions.

2. A computation of taxable income.

3. Balance sheets, as of the beginning and end of the tax

year.

4. A reconciliation of income per books with income per

return.

5. A reconciliation of retained earnings.

Enter on Form 1120 the totals for each item of income, gain,

loss, expense, or deduction, net of eliminating entries for

Instructions for Form 1120

Page 9 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

intercompany transactions between corporations within the

consolidated group. Attach consolidated balance sheets and a

reconciliation of consolidated retained earnings.

The corporation does not have to provide the information

requested in (3), (4), and (5), above, if its total receipts

(line 1a plus lines 4 through 10 on page 1 of the return)

and its total assets at the end of the tax year (Schedule L,

line 15(d)) are less than $250,000. See Schedule K, Question

13.

For more information on consolidated returns, see the

regulations under section 1502.

Life-Nonlife Consolidated Return

If Item A, box 1a, is checked and the corporation is the common

parent of a consolidated group that includes a life insurance

company, also check box 1b. See Regulations section

1.1502-47(m) for the requirements for filing a consolidated tax

return for a life-nonlife consolidated group.

Personal Holding Company

A personal holding company must check Item A, box 2, and

attach Schedule PH (Form 1120), U.S. Personal Holding

Company (PHC) Tax. See the Instructions for Schedule PH

(Form 1120) for details.

Personal Service Corporation

If the corporation is a personal service corporation, check Item

A, box 3. A personal service corporation is a corporation whose

principal activity for the testing period is the performance of

personal services. The testing period for a tax year is generally

the prior tax year unless the corporation has just been formed.

Personal services include any activity performed in the fields of

accounting, actuarial science, architecture, consulting,

engineering, health, law, and the performing arts. The services

must be substantially performed by employee-owners.

A personal service corporation must use a calendar tax year

unless:

•

It elects to use a 52-53-week tax year that ends with reference

to the calendar year or tax year elected under section 444;

•

It can establish a business purpose for a different tax year and

obtains the approval of the IRS (see the Instructions for Form

1128 and Pub. 538); or

•

It elects under section 444 to have a tax year other than a

calendar year. To make the election, use Form 8716, Election To

Have a Tax Year Other Than a Required Tax Year.

If a corporation makes the section 444 election, its deduction

for certain amounts paid to employee-owners may be limited.

See Schedule H (Form 1120), Section 280H Limitations for a

Personal Service Corporation (PSC), to figure the maximum

deduction.

If a section 444 election is terminated and the termination

results in a short tax year, type or print at the top of the first page

of Form 1120 for the short tax year “SECTION 444 ELECTION

TERMINATED.”

Schedule M-3 (Form 1120)

A corporation with total assets (nonconsolidated or consolidated

for all corporations included within a consolidated tax group) of

$10 million or more on the last day of the tax year must file

Schedule M-3 (Form 1120) instead of Schedule M-1. A

corporation filing Form 1120 that is not required to file

Schedule M-3 may voluntarily file Schedule M-3 instead of

Schedule M-1.

Corporations that (a) are required to file Schedule M-3 (Form

1120) and have less than $50 million total assets at the end of

TIP

the tax year, or (b) are not required to file Schedule M-3 (Form

1120) and voluntarily file Schedule M-3 (Form 1120), must either

(i) complete Schedule M-3 (Form 1120) entirely, or (ii) complete

Schedule M-3 (Form 1120) through Part I, and complete Form

1120, Schedule M-1, instead of completing Parts II and III of

Schedule M-3 (Form 1120). If the corporation chooses to

complete Schedule M-1 instead of completing Parts II and III of

Schedule M-3, the amount on Schedule M-1, line 1, must equal

the amount on Schedule M-3, Part I, line 11. See the Instructions

for Schedule M-3 (Form 1120) for more details. Also, see the

instructions for Schedule M-1, later.

If you are filing Schedule M-3, check Item A, box 4, to indicate

that Schedule M-3 is attached.

Item B. Employer Identification

Number (EIN)

Enter the corporation's EIN. If the corporation does not have an

EIN, it must apply for one. An EIN can be applied for:

•

Online—Go to IRS.gov/EIN. The EIN is issued immediately

once the application information is validated.

•

By faxing or mailing Form SS-4, Application for Employer

Identification Number.

Corporations located in the United States or U.S.

territories can use the online application. Foreign

corporations should call 267-941-1099 (not a toll free

number) for more information on obtaining an EIN. See the

Instructions for Form SS-4.

EIN applied for, but not received. If the corporation has not

received its EIN by the time the return is due, enter “Applied For”

and the date the corporation applied in the space for the EIN.

However, if the corporation is filing its return electronically, an

EIN is required at the time the return is filed. An exception

applies to subsidiaries of corporations whose returns are filed

with the parent's electronically filed consolidated Form 1120.

These subsidiaries should enter “Applied For” in the space for

the EIN on their returns. The subsidiaries' returns are identified

under the parent corporation's EIN.

For more information, see the Instructions for Form SS-4.

Item D. Total Assets

Enter the corporation's total assets (as determined by the

accounting method regularly used in keeping the corporation's

books and records) at the end of the tax year. If there are no

assets at the end of the tax year, enter -0-.

If the corporation is required to complete Schedule L, enter

the total assets from Schedule L, line 15, column (d), on page 1,

Item D. If filing a consolidated return, report total consolidated

assets for all corporations joining in the return.

Item E. Initial Return, Final Return,

Name Change, or Address Change

•

If this is the corporation's first return, check the “Initial return”

box.

•

If this is the corporation's final return and it will no longer exist,

check the “Final return” box.

•

If the corporation changed its name since it last filed a return,

check the “Name change” box. Generally, a corporation must

also have amended its articles of incorporation and filed the

amendment with the state in which it was incorporated.

•

If the corporation has changed its address since it last filed a

return (including a change to an “in care of” address), check the

“Address change” box.

Note. If a change in address or responsible party occurs after

the return is filed, use Form 8822-B, Change of Address or

CAUTION

Instructions for Form 1120

Page 10 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Responsible Party— Business, to notify the IRS. See the

instructions for Form 8822-B for details.

Income

Except as otherwise provided in the Internal Revenue Code,

gross income includes all income from whatever source derived.

Exception for income from qualifying shipping activities.

Gross income does not include income from qualifying shipping

activities if the corporation makes an election under section 1354

to be taxed on its notional shipping income (as defined in section

1353) at the highest corporate tax rate. If the election is made,

the corporation generally may not claim any loss, deduction, or

credit with respect to qualifying shipping activities. A corporation

making this election may also elect to defer gain on the

disposition of a qualifying vessel.

Use Form 8902, Alternative Tax on Qualifying Shipping

Activities, to figure the tax. Include the alternative tax on

Schedule J, Part I, line 9e.

Line 1. Gross Receipts or Sales

Line 1a. Gross receipts or sales. Enter on line 1a gross

receipts or sales from all business operations, except for

amounts that must be reported on lines 4 through 10.

Special rules apply to certain income, as discussed below.

Advance payments. In general, advance payments must be

included in income in the year of receipt. For exceptions to this

general rule for corporations that use the accrual method of

accounting, see the following.

•

To report income from long-term contracts, see section 460.

•

For rules that allow a limited deferral of advance payments

beyond the current tax year, see section 451(c). Also, see

Regulations sections 1.451-8(c), (d), and (e). For applicability

dates, see Regulations section 1.451-8(h).

•

For information on adopting or changing to a permissible

method for reporting advance payments for services and certain

goods by an accrual method corporation, see the Instructions for

Form 3115.

Installment sales. Generally, the installment method cannot

be used for dealer dispositions of property. A “dealer disposition”

is any disposition of (a) personal property by a person who

regularly sells or otherwise disposes of personal property of the

same type on the installment plan, or (b) real property held for

sale to customers in the ordinary course of the taxpayer's trade

or business.

The restrictions on using the installment method do not apply

to the following.

•

Dispositions of property used or produced in the trade or

business of farming.

•

Certain dispositions of timeshares and residential lots

reported under the installment method for which the corporation

elects to pay interest under section 453(I)(3).

Enter on line 1a (and carry to line 3) the gross profit on

collections from these installment sales. Attach a statement

showing the following information for the current and the 3

preceding years: (a) gross sales, (b) cost of goods sold, (c)

gross profits, (d) percentage of gross profits to gross sales, (e)

amount collected, and (f) gross profit on the amount collected.

For sales of timeshares and residential lots reported under

the installment method, if the corporation elects to pay interest

under section 453(I)(3), the corporation's income tax is

increased by the interest payable under section 453(l)(3). Report

this addition to the tax on Schedule J, Part I, line 9g.

Nonaccrual experience method for service providers.

Accrual method corporations are not required to accrue certain

amounts to be received from the performance of services that,

based on their experience, will not be collected, if:

•

The services are in the fields of health, law, engineering,

architecture, accounting, actuarial science, performing arts, or

consulting; or

•

The corporation meets the section 448(c) gross receipts test

for all prior years.

This provision does not apply to any amount if interest is

required to be paid on the amount or if there is any penalty for

failure to timely pay the amount. See Regulations section

1.448-3 for more information on the nonaccrual experience

method, including information on safe harbor methods.

For information on a book safe harbor method of accounting

for corporations that use the nonaccrual experience method of

accounting, see Rev. Proc. 2011-46, 2011-42 I.R.B. 518

available at

IRS.gov/irb/2011-42_IRB#RP-2011-46, or any

successor. Also, see the Instructions for Form 3115 for

procedures to obtain automatic consent to change to this

method or make certain changes within this method.

Corporations that qualify to use the nonaccrual experience

method should attach a statement to its return showing total

gross receipts, the amount not accrued because of the

application of section 448(d)(5), and the net amount accrued.

Enter the net amount on line 1a.

Line 1b. Returns and allowances. Enter cash and credit

refunds the corporation made to customers for returned

merchandise, rebates, and other allowances made on gross

receipts or sales.

Line 2. Cost of Goods Sold

Complete and attach Form 1125-A, Cost of Goods Sold, if

applicable. Enter on Form 1120, line 2, the amount from Form

1125-A, line 8. See Form 1125-A and its instructions.

Line 4. Dividends and Inclusions

See the instructions for Schedule C, later. Complete Schedule C

and enter on line 4 the amount from Schedule C, line 23, column

(a).

Line 5. Interest

Enter taxable interest on U.S. obligations and on loans, notes,

mortgages, bonds, bank deposits, corporate bonds, tax refunds,

etc. Do not offset interest expense against interest income.

Special rules apply to interest income from certain

below-market-rate loans. See section 7872 for details.

Note. Report tax-exempt interest on Schedule K, item 9. Also, if

required, include the same amount on Schedule M-1, line 7, or

Schedule M-3 (Form 1120), Part II, line 13, if applicable.

Line 6. Gross Rents

Enter the gross amount received for the rental of property.

Deduct expenses such as repairs, interest, taxes, and

depreciation on the proper lines for deductions. A rental activity

held by a closely held corporation or a personal service

corporation may be subject to the passive activity loss rules. See

Passive activity limitations, later.

Line 10. Other Income

Enter any other taxable income not reported on lines 1 through

9. List the type and amount of income on an attached statement.

If the corporation has only one item of other income, describe it

in parentheses on line 10.

Examples of other income to report on line 10 include the

following.

•

Recoveries of bad debts deducted in prior years under the

specific charge-off method.

•

Any amount includible in income from Form 6478, Biofuel

Producer Credit.

Instructions for Form 1120

Page 11 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

•

Any amount includible in income from Form 8864, Biodiesel,

Renewable Diesel, or Sustainable Aviation Fuels Credit.

•

Refunds of taxes deducted in prior years to the extent they

reduced the amount of tax imposed. See section 111 and the

related regulations. Do not offset current-year taxes against tax

refunds.

•

Ordinary income from trade or business activities of a

partnership (from Schedule K-1 (Form 1065)). Do not offset

ordinary losses against ordinary income. Instead, include the

losses on line 26. Show the partnership's name, address, and

EIN on a separate statement attached to this return. If the

amount entered is from more than one partnership, identify the

amount from each partnership.

•

The transferred loss amount identified as “Section 91

Transferred Loss Amount,” which is required to be recognized

when substantially all the assets of a foreign branch are

transferred to a specified 10% owned foreign corporation (as

defined in section 245A(b)) with respect to which the corporation

was a U.S. shareholder immediately after the transfer. See

section 91.

•

Any LIFO recapture amount under section 1363(d). The

corporation may have to include a LIFO recapture amount in

income if it:

1. Used the LIFO inventory method for its last tax year

before the first tax year for which it elected to become an S

corporation, or

2. Transferred LIFO inventory assets to an S corporation in a

nonrecognition transaction in which those assets were

transferred basis property.

The LIFO recapture amount is the amount by which the C

corporation's inventory under the FIFO method exceeds the

inventory amount under the LIFO method at the close of the

corporation's last tax year as a C corporation (or for the year of

the transfer, if (2) above applies). Also, see the instructions for

Schedule J, Part I, line 11.

•

The ratable portion of any net positive section 481(a)

adjustment. See Section 481(a) adjustment, earlier.

•

Part or all of the proceeds received from certain

corporate-owned life insurance contracts issued after August 17,

2006. Corporations that own one or more employer-owned life

insurance contracts issued after this date must file Form 8925,

Report of Employer-Owned Life Insurance Contracts. See Form

8925.

•

Income from cancellation of debt (COD) from the repurchase

of a debt instrument for less than its adjusted issue price.

•

The corporation's share of the following income from Form

8621, Information Return by a Shareholder of a Passive Foreign

Investment Company or Qualified Electing Fund.

1. Ordinary earnings of a qualified electing fund.

2. Gain or loss from marking passive foreign investment

company (PFIC) stock to market.

3. Gain or loss from sale or other disposition of section 1296

stock.

4. Excess distributions from a section 1291 fund allocated to

the current year and pre-PFIC years, if any.

See Form 8621 and the Instructions for Form 8621 for details.

•

Any payroll tax credit taken by an employer on its 2023

employment tax returns (Forms 941, 943, and 944) for qualified

paid sick and qualified paid family leave under FFCRA and ARP

(both the nonrefundable and refundable portions). The

corporation must include the full amount of the credit for qualified

sick and family leave wages in gross income for the tax year that

includes the last day of any calendar quarter in which the credit

is allowed.

Note. A credit is available only if the leave was taken after

March 31, 2020, and before October 1, 2021, and only after the

qualified leave wages were paid, which might, under certain

circumstances, not occur until a quarter after September 30,

2021, including quarters in 2023.

Deductions

Limitations on Deductions

Uniform capitalization rules. The uniform capitalization rules

of section 263A require corporations to capitalize certain costs to

inventory or other property. Corporations subject to the section

263A uniform capitalization rules are required to capitalize:

1. Direct costs of assets produced or acquired for resale,

and

2. Certain indirect costs (including taxes) that are properly

allocable to property produced or property acquired for resale.

The corporation cannot deduct the costs required to be

capitalized under section 263A until it sells, uses, or otherwise

disposes of the property (to which the costs relate). The

corporation recovers these costs through depreciation,

amortization, or cost of goods sold.

A small business taxpayer (defined earlier) is not required to

capitalize costs under section 263A. A small business taxpayer

that wants to discontinue capitalizing costs under section 263A

must change its method of accounting. See section 263A(i) and

Regulations section 1.263A-1(j). Also, see the Instructions for

Form 3115.

For more information on the uniform capitalization rules, see

Pub. 538. Also, see Regulations sections 1.263A-1 through

1.263A-3. See section 263A(d), Regulations section 1.263A-4,

and Pub. 225 for rules for property produced in a farming

business.

Transactions between related taxpayers. Generally, an

accrual basis taxpayer can only deduct business expenses and

interest owed to a related party in the year the payment is

included in the income of the related party. See sections 163(e)

(3) and 267(a)(2) for limitations on deductions for unpaid interest

and expenses.

Limitations on business interest expense. Business interest

expense may be limited. See section 163(j) and Form 8990.

Also, see

Limitation on deduction in the instructions for line 18

and Schedule K, Question 23 and Question 24, later.

Section 291 limitations. Corporations may be required to

adjust deductions for depletion of iron ore and coal, intangible

drilling and exploration and development costs, certain

deductions for financial institutions, and the amortizable basis of

pollution control facilities. See section 291 to determine the

amount of the adjustment.

Election to deduct business start-up and organizational

costs. A corporation can elect to deduct a limited amount of

start-up and organizational costs it paid or incurred. Any

remaining costs must generally be amortized over a 180-month

period. See sections 195 and 248 and the related regulations.

Time for making an election. The corporation generally

elects to deduct start-up or organizational costs by claiming the

deduction on its income tax return filed by the due date

(including extensions) for the tax year in which the active trade or

business begins. For more details, see the Instructions for Form

4562.

If the corporation timely filed its return for the year without

making an election, it can still make an election by filing an

amended return within 6 months of the due date of the return

(excluding extensions). Clearly indicate the election on the

amended return and enter “Filed pursuant to section

301.9100-2” at the top of the amended return. File the amended

Instructions for Form 1120

Page 12 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

return at the same address the corporation filed its original

return. The election applies when figuring taxable income for the

current tax year and all subsequent years.

The corporation can choose to forgo the elections above by

affirmatively electing to capitalize its start-up or organizational

costs on its income tax return filed by the due date (including

extensions) for the tax year in which the active trade or business

begins.

Note. The election to either amortize or capitalize start-up costs

is irrevocable and applies to all start-up costs that are related to

the trade or business.

Report the deductible amount of start-up and organizational

costs and any amortization on line 26. For amortization that

begins during the current tax year, complete and attach Form

4562, Depreciation and Amortization.

Passive activity limitations. Limitations on passive activity

losses and credits under section 469 apply to personal service

corporations (defined earlier) and closely held corporations

(defined later).

Generally, the two kinds of passive activities are:

•

Trade or business activities in which the corporation did not

materially participate for the tax year; and

•

Rental activities, regardless of its participation.

For exceptions, see Form 8810, Corporate Passive Activity Loss

and Credit Limitations.

Corporations subject to the passive activity limitations must

complete Form 8810 to compute their allowable passive activity

loss and credit. Before completing Form 8810, see Temporary

Regulations section 1.163-8T, which provides rules for allocating

interest expense among activities. If a passive activity is also

subject to the at-risk rules of section 465 or the tax-exempt use

loss rules of section 470, those rules apply before the passive

loss rules.

For more information, see section 469, the related

regulations, and Pub. 925, Passive Activity and At-Risk Rules.

Closely held corporations. A corporation is a closely held

corporation if:

•

At any time during the last half of the tax year more than 50%

in value of its outstanding stock is directly or indirectly owned by

or for not more than five individuals, and

•

The corporation is not a personal service corporation.

Certain organizations are treated as individuals for purposes

of this test. See section 542(a)(2). For rules for determining

stock ownership, see section 544 (as modified by section 465(a)

(3)).

Reducing certain expenses for which credits are allowable.

If the corporation claims certain credits, it may need to reduce

the otherwise allowable deductions for expenses used to figure

the credit. This applies to credits such as the following.

•

Work opportunity credit (Form 5884).

•

Credit for increasing research activities (Form 6765).

•

Orphan drug credit (Form 8820).

•

Disabled access credit (Form 8826).

•

Empowerment zone employment credit (Form 8844).

•

Credit for employer social security and Medicare taxes paid

on certain employee tips (Form 8846).

•

Credit for small employer pension plan start-up costs (Form

8881).

•

Credit for employer-provided childcare facilities and services

(Form 8882).

•

Low sulfur diesel fuel production credit (Form 8896).

•

Credit for employer differential wage payments (Form 8932).

•

Credit for small employer health insurance premiums (Form

8941).

•

Employer credit for paid family and medical leave (Form

8994).

If the corporation has any of the credits listed above, figure

the current-year credit before figuring the deduction for expenses

on which the credit is based. If the corporation capitalized any

costs on which it figured the credit, it may need to reduce the

amount capitalized by the credit attributable to these costs.

See the instructions for the form used to figure the applicable

credit for more details.

Limitations on deductions related to property leased to

tax-exempt entities. If a corporation leases property to a

governmental or other tax-exempt entity, the corporation cannot

claim deductions related to the property to the extent that they

exceed the corporation's income from the lease payments. This

disallowed tax-exempt use loss can be carried over to the next

tax year and treated as a deduction with respect to the property

for that tax year. See section 470(d) for exceptions.

Limitation on tax benefits for remuneration under the Pa-

tient Protection and Affordable Care Act. The $1 million

compensation limit is reduced to $500,000 for remuneration for

services provided by individuals for or on behalf of certain health

insurance providers. The $500,000 limitation applies to

remuneration that is deductible in the tax year during which the

services were performed and remuneration for services during

the year that is deductible in a future tax year (called "deferred

deduction remuneration"). The $500,000 limitation is reduced by

any amounts disallowed as excess parachute payments. See

section 162(m)(6) and Regulations section 1.162-31 for

definitions and other special rules.

Line 12. Compensation of Officers

Enter deductible officers' compensation on line 12. Do not

include compensation deductible elsewhere on the return, such

as amounts included in cost of goods sold, elective contributions

to a section 401(k) cash or deferred arrangement, or amounts

contributed under a salary reduction SEP agreement or a

SIMPLE IRA plan.

If the corporation's total receipts (line 1a, plus lines 4 through

10) are $500,000 or more, complete Form 1125-E,

Compensation of Officers. Enter on Form 1120, line 12, the

amount from Form 1125-E, line 4.

Line 13. Salaries and Wages

Enter the total salaries and wages paid for the tax year. Do not

include salaries and wages deductible elsewhere on the return,

such as amounts included in officers' compensation, cost of

goods sold, elective contributions to a section 401(k) cash or

deferred arrangement, or amounts contributed under a salary

reduction SEP agreement or a SIMPLE IRA plan.

If the corporation provided taxable fringe benefits to its

employees, such as personal use of a car, do not deduct as

wages the amount allocated for depreciation and other expenses

claimed on lines 20 and 26.

If the corporation claims a credit for any wages paid or

incurred, it may need to reduce any corresponding

deduction for officers' compensation and salaries and

wages. See Reducing certain expenses for which credits are

allowable, earlier.

Line 14. Repairs and Maintenance

Enter the cost of repairs and maintenance not claimed

elsewhere on the return, such as labor and supplies, that are not

payments to produce or improve real or tangible personal

property. See Regulations section 1.263(a)-1. For example,

amounts are paid for improvements if they are for betterments to

the property, restorations of the property (such as the

replacements of major components or substantial structural

parts), or if they adapt the property to a new or different use.

CAUTION

Instructions for Form 1120

Page 13 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Amounts paid to produce or improve property must be

capitalized. See Regulations sections 1.263(a)-2 and (a)-3.

The corporation can deduct repair and maintenance

expenses only to the extent they relate to a trade or business

activity. See Regulations section 1.162-4. The corporation may

elect to capitalize certain repair and maintenance costs

consistent with its books and records. See Regulations section

1.263(a)-3(n) for information on how to make the election.

Line 15. Bad Debts

Enter the total debts that became worthless in whole or in part

during the tax year. A small bank or thrift institution using the

reserve method of section 585 should attach a statement

showing how it figured the current year's provision. A corporation

that uses the cash method of accounting cannot claim a bad

debt deduction unless the amount was previously included in

income.

Line 16. Rents

If the corporation rented or leased a vehicle, enter the total

annual rent or lease expense paid or incurred during the year.

Also, complete Part V of Form 4562. If the corporation leased a

vehicle for a term of 30 days or more, the deduction for vehicle

lease expense may have to be reduced by an amount includible

in income called the inclusion amount. The corporation may

have an inclusion amount if:

The lease term began:

And the vehicle's FMV on

the first day of the lease

exceeded:

Cars (excluding trucks and vans)

After 12/31/22 but before 1/1/24 ...... $60,000

After 12/31/21 but before 1/1/23 ...... $56,000

After 12/31/20 but before 1/1/22 ...... $51,000

After 12/31/17 but before 1/1/21 ...... $50,000

After 12/31/12 but before 1/1/18 ...... $19,000

Trucks and vans

After 12/31/22 but before 1/1/24 ...... $60,000

After 12/31/21 but before 1/1/23 ...... $56,000

After 12/31/20 but before 1/1/22 ...... $51,000

After 12/31/17 but before 1/1/21 ...... $50,000

After 12/31/13 but before 1/1/18 ...... $19,500

After 12/31/09 but before 1/1/14 ...... $19,000

See Pub. 463, Travel, Gift, and Car Expenses, for instructions

on figuring the inclusion amount.

Note. The inclusion amount for lease terms beginning in 2024

will be published in the Internal Revenue Bulletin in early 2024.

Line 17. Taxes and Licenses

Enter taxes paid or accrued during the tax year, but do not

include the following.

•

Federal income taxes.

•

Foreign or U.S. territory income taxes if a foreign tax credit is

claimed.

•

Taxes not imposed on the corporation.

•

Taxes, including state or local sales taxes, that are paid or

incurred in connection with an acquisition or disposition of

property (these taxes must be treated as a part of the cost of the

acquired property or, in the case of a disposition, as a reduction

in the amount realized on the disposition).

•

Taxes assessed against local benefits that increase the value

of the property assessed (such as for paving, etc.).

•

Taxes deducted elsewhere on the return, such as those

reflected in cost of goods sold.

See section 164(d) for information on apportionment of taxes

on real property between seller and purchaser.

Do not reduce the corporation's deduction for social

security and Medicare taxes by the nonrefundable and

refundable portions of any FFCRA and ARP credits for

qualified sick and family leave wages claimed on its employment

tax returns. Instead, report this amount as income on line 10.

Line 18. Interest

Note. Do not offset interest income against interest expense.

The corporation must make an interest allocation if the

proceeds of a loan were used for more than one purpose (for

example, to purchase a portfolio investment and to acquire an

interest in a passive activity). See Temporary Regulations

section 1.163-8T for the interest allocation rules.

Mutual savings banks, building and loan associations, and

cooperative banks can deduct the amounts paid or credited to

the accounts of depositors as dividends, interest, or earnings.

See section 591.

Do not deduct the following interest.

•

Interest on indebtedness incurred or continued to purchase or

carry obligations if the interest is wholly exempt from income tax.

See section 265(b) for special rules and exceptions for financial

institutions. Also, see section 265(b)(7) for a de minimis

exception for financial institutions for certain tax-exempt bonds

issued in 2009 and 2010.

•

For cash basis taxpayers, prepaid interest allocable to years

following the current tax year. For example, a cash basis

calendar year taxpayer who in 2023 prepaid interest allocable to

any period after 2023 can deduct only the amount allocable to

2023.

•

Interest and carrying charges on straddles. Generally, these

amounts must be capitalized. See section 263(g).

•

Interest on debt allocable to the production of designated

property by a corporation for its own use or for sale. The

corporation must capitalize this interest. Also, capitalize any

interest on debt allocable to an asset used to produce the

property. See section 263A(f) and Regulations sections

1.263A-8 through 1.263A-15 for definitions and more

information.

•

Interest paid or incurred on any portion of an underpayment of

tax that is attributable to an understatement arising from an

undisclosed listed transaction or an undisclosed reportable

avoidance transaction (other than a listed transaction) entered

into in tax years beginning after October 22, 2004.

Special rules apply to:

•

Forgone interest on certain below-market-rate loans (see

section 7872).

•

Original issue discount (OID) on certain high yield discount

obligations. See section 163(e)(5) to determine the amount of

the deduction for OID that is deferred and the amount that is

disallowed on a high yield discount obligation. The rules under

section 163(e)(5) do not apply to certain high yield discount

obligations issued after August 31, 2008, and before January 1,

2011. See section 163(e)(5)(F).

•

Interest which is allocable to unborrowed policy cash values of

life insurance, endowment, or annuity contracts issued after

June 8, 1997. See section 264(f). Attach a statement showing

the computation of the deduction.

CAUTION

Instructions for Form 1120

Page 14 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Limitation on deduction. Under section 163(j), business

interest expense is generally limited to the sum of business

interest income, 30% of the adjusted taxable income, and floor

plan financing interest. The amount of any business interest

expense that is not allowed as a deduction for the tax year is

carried forward to the following year. If section 163(j) applies, use

Form 8990 to figure the amount of business interest expense the

corporation can deduct for the current tax year and the amount

that can be carried forward to the next year. See the Instructions

for Form 8990. Also see

Schedule K, Question 23 and Question

24, later.

Line 19. Charitable Contributions

Enter contributions or gifts actually paid within the tax year to or

for the use of charitable and governmental organizations

described in section 170(c) and any unused contributions

carried over from prior years. Special rules and limits apply to

contributions to organizations conducting lobbying activities. See

section 170(f)(9).

Corporations reporting taxable income on the accrual method

can elect to treat as paid during the tax year any contributions

paid by the due date for filing the corporation’s tax return (not

including extensions), if the contributions were authorized by the

board of directors during the tax year. Attach a declaration to the

return stating that the resolution authorizing the contributions

was adopted by the board of directors during the tax year. The

declaration must include the date the resolution was adopted.

See section 170(a)(2)(B).

Limitation on deduction. Generally, the total amount claimed

cannot be more than 10% of taxable income (line 30) computed

without regard to the following.

•

Any deduction for contributions.

•

The special deductions on line 29b.

•

The limitation under section 249 on the deduction for bond

premium.

•

Any net operating loss (NOL) carryback to the tax year under

section 172.

•

Any capital loss carryback to the tax year under section

1212(a)(1).

•

Deduction for income attributable to domestic production

activities of specified agricultural or horticultural cooperatives.

Carryover. Charitable contributions over the 10% limitation

cannot be deducted for the tax year but can be carried over to

the next 5 tax years. See the exception below for farmers and

ranchers and certain Native Corporations.

Special rules apply if the corporation has an NOL carryover to

the tax year. In figuring the charitable contributions deduction for

the current tax year, the 10% limit is applied using the taxable

income after taking into account any deduction for the NOL.

To figure the amount of any remaining NOL carryover to later

years, taxable income must be modified (see section 172(b)). To

the extent that contributions are used to reduce taxable income

for this purpose and increase an NOL carryover, a contributions

carryover is not allowed. See section 170(d)(2)(B).

Suspension of 10% limitation for farmers and ranchers and

certain Native Corporations. Certain corporations can deduct

contributions of qualified conservation property without regard to

the general 10% limit. This applies to:

•

A qualified farmer or rancher (as defined in section 170(b)(1)

(E)(v)) that does not have publicly traded stock; and

•

A Native Corporation (as defined in section 170(b)(2)(C)(iii))

that contributes property which was land conveyed under the

Alaska Native Claims Settlement Act.

The total amount of the contribution claimed for the qualified

conservation property cannot exceed 100% of the excess of the

corporation's taxable income (as computed above substituting

“100%” for “10%” ) over all other allowable charitable

contributions. Any excess qualified conservation contributions

can be carried over to the next 15 years, subject to the 100%

limitation. See sections 170(b)(2)(B) and (C).

Cash contributions. For contributions of cash, check, or other

monetary gifts (regardless of the amount), the corporation must

maintain a bank record, or a receipt, letter, or other written

communication from the donee organization indicating the name

of the organization, the date of the contribution, and the amount

of the contribution.

Contributions of $250 or more. A corporation can deduct a

contribution of $250 or more only if it gets a written

acknowledgment from the donee organization that shows the

amount of cash contributed, describes any property contributed

(but not its value), and either gives a description and a good faith

estimate of the value of any goods or services provided in return

for the contribution or states that no goods or services were

provided in return for the contribution. The acknowledgment

must be obtained by the due date (including extensions) of the

corporation's return, or, if earlier, the date the return is filed. Do

not attach the acknowledgment to the tax return, but keep it with

the corporation's records.

Contributions of property other than cash. If a corporation

(other than a closely held or personal service corporation)

contributes property other than cash and claims over a $500

deduction for the property, it must attach a statement to the

return describing the kind of property contributed and the

method used to determine its FMV. Closely held corporations

and personal service corporations must complete Form 8283,

Noncash Charitable Contributions, and attach it to their returns.

All other corporations must generally complete and attach Form

8283 to their returns for contributions of property (other than

money) if the total claimed deduction for all property contributed

was more than $5,000. Special rules apply to the contribution of

certain property. See the Instructions for Form 8283.

Qualified conservation contributions. Special rules apply

to qualified conservation contributions, including contributions of

certain easements on buildings located in a registered historic

district. See section 170(h) and Pub. 526, Charitable

Contributions.

Other special rules. The corporation must reduce its

deduction for contributions of certain ordinary income and

capital gain property. See section 170(e).

A larger deduction is allowed for certain contributions

including:

•

Inventory and other property to certain organizations for use in

the care of the ill, needy, or infants (see section 170(e)(3)),

including qualified contributions of “apparently wholesome food”;

and

•

Scientific equipment used for research to institutions of higher

learning or to certain scientific research organizations (other than

by personal holding companies and service organizations). See

section 170(e)(4).

For more information on charitable contributions, including

substantiation and recordkeeping requirements, see section 170

and the related regulations and Pub. 526. For other special rules

that apply to corporations, see Pub. 542.

Line 20. Depreciation

Include on line 20 depreciation and the cost of certain property

that the corporation elected to expense under section 179 from

Form 4562. Include amounts not claimed on Form 1125-A or

elsewhere on the return. See Form 4562 and the Instructions for

Form 4562.

Instructions for Form 1120

Page 15 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 21. Depletion

If the corporation has an economic interest in mineral property or

standing timber, it can take a deduction for depletion. More than

one person can have an economic interest in the same mineral

deposit or timber. In the case of leased property, the depletion

deduction is divided between the lessor and the lessee.

See sections 613 and 613A for percentage depletion rates

applicable to natural deposits. Also, see section 291 for the

limitation on the depletion deduction for iron ore and coal

(including lignite).

Attach Form T (Timber), Forest Activities Schedule, if a

deduction for depletion of timber is taken.

Foreign intangible drilling costs and foreign exploration and

development costs must either be added to the corporation's

basis for cost depletion purposes or be deducted ratably over a

10-year period. See sections 263(i), 616, and 617 for details.

Line 23. Pension, Profit-Sharing, etc., Plans

Enter the deduction for contributions to qualified pension,

profit-sharing, or other funded deferred compensation plans.

Employers who maintain such a plan must generally file one of

the forms listed below unless exempt from filing under

regulations or other applicable guidance, even if the plan is not a

qualified plan under the Internal Revenue Code. The filing

requirement applies even if the corporation does not claim a

deduction for the current tax year. There are penalties for failure

to file these forms on time and for overstating the pension plan

deduction. See sections 6652(e) and 6662(f). Also, see the

instructions for the applicable form.

Form 5500, Annual Return/Report of Employee Benefit Plan.

Form 5500-SF, Short Form Annual Return/Report of Small

Employee Benefit Plan. File this form instead of Form 5500

generally if there were under 100 participants at the beginning of

the plan year.

Note. Form 5500 and Form 5500-SF must be filed electronically

under the computerized ERISA Filing Acceptance System

(EFAST2). For more information, see the EFAST2 website at

www.EFAST.dol.gov.

Form 5500-EZ, Annual Return of A One-Participant (Owners/

Partners and Their Spouses) Retirement Plan or A Foreign Plan.

File this form for a plan that only covers the owner (or the owner

and spouse) or a foreign plan that is required to file an annual

return and does not file the annual return electronically on Form

5500-SF. See the Instructions for Form 5500-EZ.

Line 24. Employee Benefit Programs

Enter contributions to employee benefit programs not claimed

elsewhere on the return (for example, insurance or health and

welfare programs) that are not an incidental part of a pension,

profit-sharing, etc., plan included on line 23.

Line 25. Energy Efficient Commercial Buildings

Deduction

Complete and attach Form 7205 if claiming the energy efficient

commercial building deduction. See the Instructions for Form

7205 for more information. Also, see section 179D.

Line 26. Other Deductions

Attach a statement, listing by type and amount, all allowable

deductions that are not deductible elsewhere on Form 1120.

Enter the total on line 26.

Examples of other deductions include the following.

•

Amortization. See Part VI of Form 4562.

•

Certain costs of a qualified film, television, or live theatrical

production commencing before January 1, 2026 (after

December 31, 2015, and before January 1, 2026, for a live

theatrical production). This deduction does not apply to any

portion of the aggregate cost of the production above $15

million. There is a higher allowance for production in certain

areas. See section 181 and the related regulations.

Note. Certain film, television, or live theatrical productions

acquired and placed in service after September 27, 2017 (for

which a deduction would have been allowable under section 181

without regard to the dollar limitation), are qualified property

eligible for the special depreciation allowance under section

168(k). See the Instructions for Form 4562.

•

Certain business start-up and organizational costs (discussed

earlier, under Limitations on Deductions).

•

Reforestation costs. The corporation can elect to deduct up to

$10,000 of qualifying reforestation expenses for each qualified

timber property. The corporation can elect to amortize over 84

months any amount not deducted. See the Instructions for Form

T (Timber).

•

Insurance premiums.

•

Legal and professional fees.

•

Supplies used and consumed in the business.

•

Travel, meals, and entertainment expenses. Special rules

apply (discussed later).

•

Utilities.

•

Ordinary losses from trade or business activities of a

partnership (from Schedule K-1 (Form 1065)). Do not offset

ordinary income against ordinary losses. Instead, include the

income on line 10. Show the partnership's name, address, and

EIN on a separate statement attached to this return. If the

amount is from more than one partnership, identify the amount

from each partnership.

•

Any extraterritorial income exclusion (from Form 8873).

•

Any net negative section 481(a) adjustment, or in the case of

an eligible terminated S corporation, the ratable portion of any

negative section 481(a) adjustment. See Section 481(a)

adjustment, earlier.

•

Dividends paid in cash on stock held by an employee stock

ownership plan.

However, a deduction may be taken for these dividends only if,

according to the plan, the dividends are:

1. Paid in cash directly to the plan participants or

beneficiaries;

2. Paid to the plan, which distributes them in cash to the

plan participants or their beneficiaries no later than 90 days after

the end of the plan year in which the dividends are paid;

3. At the election of such participants or their beneficiaries

(a) payable as provided under (1) or (2) above, or (b) paid to the

plan and reinvested in qualifying employer securities; or

4. Used to make payments on a loan described in section

404(a)(9).

See section 404(k) for more details and the limitation on certain

dividends.

Do not deduct expenses such as the following.

•

Amounts paid or incurred to, or at the direction of, a

government or governmental entity for the violation, or

investigation or inquiry into the potential violation, of a law.

However, see Fines or similar penalties, later.

•

Any amount that is allocable to a class of exempt income. See

section 265(b) for exceptions.

•

Lobbying expenses. However, see exceptions discussed later.

•

Amounts paid or incurred for any settlement, payout, or

attorney fees related to sexual harassment or sexual abuse, if

such payments are subject to a nondisclosure agreement. See

section 162(q).

Instructions for Form 1120

Page 16 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Travel, meals, and entertainment. Subject to limitations and

restrictions discussed below, a corporation can deduct ordinary

and necessary travel, meal, and non-entertainment expenses

paid or incurred in its trade or business. Generally, entertainment

expenses, membership dues, and facilities used in connection

with these activities cannot be deducted. In addition, no

deduction is generally allowed for qualified transportation fringe

benefits. Special rules apply to deductions for gifts, luxury water

travel, and convention expenses. See section 274 and Pub. 463,

for details.

Travel. The corporation cannot deduct travel expenses of any

individual accompanying a corporate officer or employee,

including a spouse or dependent of the officer or employee,

unless:

•

That individual is an employee of the corporation, and

•

That individual’s travel is for a bona fide business purpose and

would otherwise be deductible by that individual.

Meals. Generally, the corporation can deduct only 50% of the

amount otherwise allowable for non-entertainment-related meal

expenses paid or incurred in its trade or business. Meals not

separately stated from entertainment are generally not

deductible. In addition (subject to exceptions under section

274(k)(2)):

•

Meals must not be lavish or extravagant, and

•

An employee of the corporation must be present at the meal.

See section 274(n)(3) for a special rule that applies to

expenses for meals consumed by individuals subject to the

hours of service limits of the Department of Transportation.

Qualified transportation fringes (QTFs). Generally, no

deduction is allowed under section 274(a)(4) for QTFs provided

by employers to their employees. QTFs are defined in section

132(f)(1) and include:

•

Transportation in a commuter highway vehicle between the

employee's residence and place of employment,

•

Any transit pass, and

•

Qualified parking.

See section 274 and Pub. 15-B, Employers Tax Guide to

Fringe Benefits, for details.

Membership dues. The corporation can deduct amounts

paid or incurred for membership dues in civic or public service

organizations, professional organizations (such as bar and

medical associations), business leagues, trade associations,

chambers of commerce, boards of trade, and real estate boards.

However, no deduction is allowed if a principal purpose of the

organization is to entertain or provide entertainment facilities for

members or their guests. In addition, corporations cannot deduct

membership dues in any club organized for business, pleasure,

recreation, or other social purpose. This includes country clubs,

golf and athletic clubs, airline and hotel clubs, and clubs

operated to provide meals under conditions favorable to

business discussion.

Entertainment facilities. Generally, the corporation cannot

deduct an expense paid or incurred for a facility (such as a yacht

or hunting lodge) used for an activity usually considered

entertainment, amusement, or recreation.

Amounts treated as compensation. Generally, the

corporation may be able to deduct otherwise nondeductible

entertainment, amusement, or recreation expenses if the

amounts are treated as compensation to the recipient and

reported on Form W-2 for an employee or on Form 1099-NEC for

an independent contractor.

However, if the recipient is an officer, director, beneficial

owner (directly or indirectly), or other “specified individual” (as

defined in section 274(e)(2)(B) and Regulations section

1.274-9(b)), special rules apply.

Fines or similar penalties. Generally, no deduction is allowed

for fines or similar penalties paid or incurred to, or at the direction

of, a government or governmental entity for violating any law, or

for the investigation or inquiry into the potential violation of a law,

except:

•

Amounts that constitute restitution or remediation of property,

•

Amounts paid to come into compliance with the law,

•

Amounts paid or incurred as the result of orders or

agreements in which no government or governmental entity is a

party, and

•

Amounts paid or incurred for taxes due.

No deduction is allowed unless the amounts are specifically

identified in the order or agreement and the corporation

establishes that the amounts were paid for that purpose. Also,

any amount paid or incurred as reimbursement to the

government for the costs of any investigation or litigation are not

eligible for the exceptions and are nondeductible. See section

162(f).

Lobbying expenses. Generally, lobbying expenses are not

deductible. These expenses include:

•

Amounts paid or incurred in connection with influencing

federal, state, or local legislation; or

•

Amounts paid or incurred in connection with any

communication with certain federal executive branch officials in

an attempt to influence the official actions or positions of the

officials. See Regulations section 1.162-29 for the definition of

“influencing legislation.”

Dues and other similar amounts paid to certain tax-exempt

organizations may not be deductible. If certain in-house lobbying

expenditures do not exceed $2,000, they are deductible.

Line 28. Taxable Income Before NOL Deduction

and Special Deductions

At-risk rules. Generally, special at-risk rules under section 465

apply to closely held corporations (see

Passive activity

limitations, earlier) engaged in any activity as a trade or business

or for the production of income. These corporations may have to

adjust the amount on line 28. (See below.)

The at-risk rules do not apply to:

•

Holding real property placed in service by the taxpayer before

1987;

•

Equipment leasing under sections 465(c)(4), (5), and (6); or

•

Any qualifying business of a qualified corporation under

section 465(c)(7).

However, the at-risk rules do apply to the holding of mineral

property.

If the at-risk rules apply, adjust the amount on this line for any

section 465(d) losses. These losses are limited to the amount for

which the corporation is at risk for each separate activity at the

close of the tax year. If the corporation is involved in one or more

activities, any of which incurs a loss for the year, report the

losses for each activity separately. Attach Form 6198, At-Risk

Limitations, showing the amount at risk and gross income and

deductions for the activities with the losses.

If the corporation sells or otherwise disposes of an asset or its

interest (either total or partial) in an activity to which the at-risk

rules apply, determine the net profit or loss from the activity by

combining the gain or loss on the sale or disposition with the

profit or loss from the activity. If the corporation has a net loss, it

may be limited because of the at-risk rules.

Treat any loss from an activity not allowed for the tax year as a

deduction allocable to the activity in the next tax year.

Line 29a. Net Operating Loss Deduction

A corporation can use the NOL incurred in one tax year to

reduce its taxable income in another tax year. Enter on line 29a

the total NOL carryovers from other tax years, but do not enter

more than the corporation's taxable income (after special

Instructions for Form 1120

Page 17 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

deductions). Attach a statement showing the computation of the

NOL deduction. Complete item 12 on Schedule K.

The following special rules apply.

•

If an ownership change (described in section 382(g)) occurs,

the amount of the taxable income of a loss corporation that may

be offset by the pre-change NOL carryovers may be limited. See

section 382 and the related regulations. A loss corporation must

include the information statement as provided in Regulations

section 1.382-11(a) with its income tax return for each tax year

that it is a loss corporation in which an ownership shift, equity

structure shift, or other transaction described in Temporary

Regulations section 1.382-2T(a)(2)(i) occurs. If the corporation

makes the closing-of-the-books election, see Regulations

section 1.382-6(b).

The limitations under section 382 do not apply to certain

ownership changes after February 17, 2009, made pursuant to a

restructuring plan under the Emergency Economic Stabilization

Act of 2008. See section 382(n).

For guidance in applying section 382 to loss corporations

whose instruments were acquired by Treasury under certain

programs under the Emergency Economic Stabilization Act of

2008, see Notice 2010-2, 2010-2 I.R.B. 251.

•

If a corporation acquires control of another corporation (or

acquires its assets in a reorganization), the amount of

pre-acquisition losses that may offset recognized built-in gain

may be limited (see section 384).

•

If a corporation elects the alternative tax on qualifying

shipping activities under section 1354, no deduction is allowed

for an NOL attributable to the qualifying shipping activities to the

extent that the loss is carried forward from a tax year preceding

the first tax year for which the alternative tax election was made.

See section 1358(b)(2).

For more details on the NOL deduction, see section 172 and

the Instructions for Form 1139.

Line 29b. Special Deductions

See the instructions for Schedule C.

Line 30. Taxable Income

Minimum taxable income. The corporation's taxable income

cannot be less than the largest of the following amounts.

•

The inversion gain of the corporation for the tax year, if the

corporation is an expatriated entity or a partner in an expatriated

entity. See section 7874(a).

•

The sum of the corporation's excess inclusions from its

residual interest in a REMIC from Schedules Q (Form 1066),

line 2c, and the corporation's taxable income determined solely

with respect to its ownership and high-yield interests in FASITs.

See sections 860E(a) and 860J (repealed).

Net operating loss (NOL). If line 30 (figured without regard to

the items listed above under minimum taxable income) is zero or

less, the corporation may have an NOL that can be carried back

or forward as a deduction to other tax years.

Only farming losses and losses of an insurance company

(other than a life insurance company) can be carried back. The

carryback period for these losses is 2 years. For NOLs that can

be carried back, the corporation can elect to waive the carryback

period and instead carry the NOL forward to future tax years.

See the instructions for Schedule K, Item 11 for information

on making the election to waive the carryback period. See the

Instructions for Form 1139 for other special rules and elections.

The NOL deduction for tax year 2023 cannot exceed the

aggregate amount of NOLs arising in tax years beginning before

January 1, 2018, carried to such year plus the lesser of:

1. The aggregate amount of NOLs arising in tax years

beginning after December 31, 2017, carried to such tax year; or

80% of the excess, if any, of taxable income determined

without any NOL deduction, section 199A deduction, or section

250 deduction, over any NOL carryover to the tax year from tax

years beginning before January 1, 2018.

An exception applies for NOLs of insurance companies other

than life insurance companies. The 80% taxable income limit

does not apply to these entities. See sections 172(b) and (f).

Merchant Marine capital construction fund. To take a

deduction for amounts contributed to a capital construction fund

(CCF), reduce the amount that would otherwise be entered on

line 30 by the amount of the deduction. On the dotted line next to

the entry space, enter “CCF” and the amount of the deduction.

For more information, see section 7518.

Line 32

Reserved for future use.

Line 34. Estimated Tax Penalty

Generally, the corporation does not have to file Form 2220

because the IRS can figure the penalty amount, if any, and bill

the corporation. However, even if the corporation does not owe

the penalty, it must complete and attach Form 2220 if:

•

The annualized income or adjusted method is used, or

•

The corporation is a large corporation (as defined in the

Instructions for Form 2220) computing its first required

installment based on the prior year's tax.

If Form 2220 is attached, check the box on line 34, and enter

any penalty on this line.

If the corporation's tax liability includes a CAMT liability,

the corporation must complete and attach Form 2220.

The affected corporation must also include an amount of

estimated tax penalty on Form 1120, line 34, even if that amount

is zero. Failure to follow these instructions could result in the

corporation receiving a penalty notice that will require an

abatement request to apply any penalty relief. See

Notice

2023-42.

Line 35. Amount Owed

If the corporation cannot pay the full amount of tax owed, it can

apply for an installment agreement online. The corporation can

apply for an installment agreement online if:

•

It cannot pay the full amount shown on line 35,

•

The total amount owed is $25,000 or less, and

•

The corporation can pay the liability in full in 24 months.

To apply using the Online Payment Agreement Application, go to

IRS.gov/OPA.

Under an installment agreement, the corporation can pay

what it owes in monthly installments. There are certain

conditions that must be met to enter into and maintain an

installment agreement, such as paying the liability within 24

months and making all required deposits and timely filing tax

returns during the length of the agreement.

If the installment agreement is accepted, the corporation will

be charged a fee and it will be subject to penalties and interest

on the amount of tax not paid by the due date of the return.

Line 37

Enter the amount of any overpayment that should be refunded or

applied to next year's estimated tax.

Note. This election to apply some or all of the overpayment

amount to the corporation's 2024 estimated tax cannot be

changed at a later date.

Direct deposit of refund. If the corporation wants its refund

directly deposited into its checking or savings account at any

CAUTION

Instructions for Form 1120

Page 18 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

U.S. bank or other financial institution instead of having a check

sent to the corporation, complete Form 8050, Direct Deposit of

Corporate Tax Refund, and attach it to the corporation's tax

return.

Schedule C. Dividends, Inclusions,

and Special Deductions

For purposes of the 20% ownership test on lines 1 through 7, the

percentage of stock owned by the corporation is based on voting

power and value of the stock. Preferred stock described in

section 1504(a)(4) is not taken into account.

Consolidated returns. Corporations filing a consolidated

return should see Regulations sections 1.1502-13, 1.1502-26,

and 1.1502-27 before completing Schedule C.

Corporations filing a consolidated return must not report as

dividends on Schedule C any amounts received from

corporations within the consolidated group. Such dividends are

eliminated in consolidation rather than offset by the

dividends-received deduction.

Line 1, Column (a)

Enter dividends (except those received on certain debt-financed

stock acquired after July 18, 1984—see section 246A) that are:

•

Received from less-than-20%-owned domestic corporations

subject to income tax, and

•

Qualified for the 50% deduction under section 243(a)(1).

Also, include on line 1 the following.

•

Taxable distributions from an IC-DISC or former DISC that are

designated as eligible for the 50% deduction and certain

dividends of Federal Home Loan Banks. See section 246(a)(2).

•

Dividends (except those received on certain debt-financed

stock acquired after July 18, 1984) from a regulated investment

company (RIC). The amount of dividends eligible for the

dividends-received deduction under section 243 is limited by

section 854(b). The corporation should receive a notice from the

RIC specifying the amount of dividends that qualify for the

deduction.

Report so-called dividends or earnings received from mutual

savings banks, etc., as interest. Do not treat them as dividends.

Line 2, Column (a)

Enter on line 2:

•

Dividends (except those received on certain debt-financed

stock acquired after July 18, 1984) that are received from

20%-or-more-owned domestic corporations subject to income

tax and that are subject to the 65% deduction under section

243(c), and

•

Taxable distributions from an IC-DISC or former DISC that are

considered eligible for the 65% deduction.

Line 3, Column (a)

Enter the following.

•

Dividends received on certain debt-financed stock acquired

after July 18, 1984, from domestic and foreign corporations

subject to income tax that would otherwise be subject to the

dividends-received deduction under section 243(a)(1), 243(c), or

245(a). Generally, debt-financed stock is stock that the

corporation acquired by incurring a debt (for example, it

borrowed money to buy the stock).

•

Dividends received from a RIC on debt-financed stock. The

amount of dividends eligible for the dividends-received

deduction is limited by section 854(b). The corporation should

receive a notice from the RIC specifying the amount of dividends

that qualify for the deduction.

Line 3, Columns (b) and (c)

Dividends received on certain debt-financed stock acquired after

July 18, 1984, are not entitled to the full 50% or 65%

dividends-received deduction under section 243 or 245(a). The

50% or 65% deduction is reduced by a percentage that is related

to the amount of debt incurred to acquire the stock. See section

246A. Also, see section 245(a) before making this computation

for an additional limitation that applies to certain dividends

received from foreign corporations. Attach a statement to Form

1120 showing how the amount on line 3, column (c), was figured.

Line 4, Column (a)

Enter dividends received on preferred stock of a

less-than-20%-owned public utility that is subject to income tax

and is allowed the 23.3% deduction provided in sections 244

and 247 (as affected by P.L.113-295, Div. A, section 221(a)(41)

(A), Dec. 19, 2014, 128 Stat. 4043) for dividends paid.

Line 5, Column (a)

Enter dividends received on preferred stock of a

20%-or-more-owned public utility that is subject to income tax

and is allowed the 26.7% deduction provided in sections 244

and 247 (as affected by P.L.113-295, Div. A, section 221(a)(41)

(A), Dec. 19, 2014, 128 Stat. 4043) for dividends paid.

Line 6, Column (a)

Enter the U.S.-source portion of dividends that:

•

Are received from less-than-20%-owned foreign corporations,

and

•

Qualify for the 50% deduction under section 245(a). To qualify

for the 50% deduction, the corporation must own at least 10% of

the stock of the foreign corporation by vote and value.

Also, include dividends received from a

less-than-20%-owned FSC that:

•

Are attributable to income treated as effectively connected

with the conduct of a trade or business within the United States

(excluding foreign trade income), and

•

Qualify for the 50% deduction under section 245(c)(1)(B).

Line 7, Column (a)

Enter the U.S.-source portion of dividends that:

•

Are received from 20%-or-more-owned foreign corporations,

and

•

Qualify for the 65% deduction under sections 243 and 245(a).

Also, include dividends received from a 20%-or-more-owned

FSC that:

•

Are attributable to income treated as effectively connected

with the conduct of a trade or business within the United States

(excluding foreign trade income), and

•

Qualify for the 65% deduction under section 245(c)(1)(B).

Line 8, Column (a)

Enter dividends received from wholly owned foreign subsidiaries

that are eligible for the 100% deduction under section 245(b).

In general, the deduction under section 245(b) applies to

dividends paid out of the earnings and profits of a foreign

corporation for a tax year during which:

•

All of its outstanding stock is directly or indirectly owned by

the domestic corporation receiving the dividends, and

•

All of its gross income from all sources is effectively

connected with the conduct of a trade or business within the

United States.

Line 9, Column (c)

Generally, line 9, column (c), cannot exceed the amount from the

Worksheet for Schedule C, line 9. However, in a year in which an

Instructions for Form 1120

Page 19 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

NOL occurs, this limitation does not apply even if the loss is

created by the dividends-received deduction. See sections

172(d) and 246(b).

Line 10, Columns (a) and (c)

Small business investment companies operating under the Small

Business Investment Act of 1958 must enter dividends that are

received from domestic corporations subject to income tax even

though a deduction is allowed for the entire amount of those

dividends. To claim the 100% deduction on line 10, column (c),

the company must file with its return a statement that it was a

federal licensee under the Small Business Investment Act of

1958 at the time it received the dividends.

Line 11, Columns (a) and (c)

Enter only dividends that qualify under section 243(b) for the

100% dividends-received deduction described in section 243(a)

(3). Corporations taking this deduction are subject to the

provisions of section 1561.

The 100% deduction does not apply to affiliated group

members that are joining in the filing of a consolidated return.

Line 12, Column (a)

Enter dividends from FSCs that are attributable to foreign trade

income and that are eligible for the 100% deduction provided in

section 245(c)(1)(A).

Line 13, Column (a)

Enter the foreign-source portion of dividends that:

•

Are received from specified 10%-owned foreign corporations

(as defined in section 245A(b)), including, for example, gain from

the sale of stock of a foreign corporation that is treated as a

dividend under sections 1248(a) and (j); and

•

Qualify for the section 245A deduction.

Line 14, Column (a)

Enter the foreign dividends not reportable on line 3, 6, 7, 8, 11,

12, or 13 of column (a).

Include on line 14 the foreign-source portion of any dividend

that does not qualify for the section 245A deduction (for

example, hybrid dividends within the meaning of section

245A(e), ineligible amounts of dividends within the meaning of

Regulations section 1.245A-5(b), dividends that fail to meet the

holding period requirement under section 246(c)(5), etc.).

Also, include on line 14 the corporation's share of

distributions from a section 1291 fund from Form 8621, to the

extent that the amounts are taxed as dividends under section

301. See Form 8621 and the Instructions for Form 8621.

Attach a statement identifying the amount of each dividend

reported on line 14 and the provision pursuant to which a

deduction is not allowed with respect to such dividend.

Line 15, Column (a)

Reserved for future use.

Line 15, Column (c)

Reserved for future use.

Line 16a, Column (a)

Enter the foreign-source portion of any subpart F inclusions

attributable to the sale or exchange by a CFC of stock in another

foreign corporation described in section 964(e)(4). This should

equal the sum of the amounts reported by the U.S. shareholder

on Form(s) 5471, Schedule I, line 1a. (Do not include on line 16a

any portion of such subpart F inclusion that is not eligible for the

section 245A deduction pursuant to Regulations section

1.245A-5(g)(2). Include such amounts on line 16c.)

Line 16b, Column (a)

Enter the total subpart F inclusions attributable to tiered hybrid

dividends. This should equal the sum of the amounts reported by

the U.S. shareholder on Form(s) 5471, Schedule I, line 1b.

Line 16c, Column (a)

Enter all other amounts included in income under section 951.

This should equal the sum of the amounts reported by the U.S.

shareholder on Form(s) 5471, Schedule I, lines 1(c) through

1(h), 2, and 4.

Line 17, Column (a)

Enter amounts included in income under section 951A. See

Form 8992, Part II, line 5, and the Instructions for Form 8992.

Also, if applicable, attach Form(s) 5471.

Note. Consider the applicability of section 951A with respect to

CFCs owned by domestic partnerships in which the corporation

has an interest.

Line 18, Column (a)

Include gross-up for taxes deemed paid under section 960.

Line 19, Column (a)

Enter taxable distributions from an IC-DISC or former DISC that

are designated as not eligible for a dividends-received

deduction.

No deduction is allowed under section 243 for a dividend from

an IC-DISC or former DISC (as defined in section 992(a)) to the

extent the dividend:

•

Is paid out of the corporation's accumulated IC-DISC income

or previously taxed income, or

•

Is a deemed distribution under section 995(b)(1).

Line 20, Column (a)

Include the following.

1. Dividends (other than capital gain distributions reported

on Schedule D (Form 1120), Capital Gains and Losses, and

exempt-interest dividends) that are received from RICs and that

are not subject to the 50% deduction.

2. Dividends from tax-exempt organizations.

3. Dividends (other than capital gain distributions) received

from a REIT that, for the tax year of the trust in which the

dividends are paid, qualifies under sections 856 through 860.

4. Dividends not eligible for a dividends-received deduction,

which include the following.

a. Dividends received on any share of stock held for less

than 46 days during the 91-day period beginning 45 days before

the ex-dividend date. When counting the number of days the

corporation held the stock, you cannot count certain days during

which the corporation's risk of loss was diminished. See section

246(c)(4) and Regulations section 1.246-5 for more details.

b. Dividends received on any share of preferred stock which

are attributable to periods totaling more than 366 days if such

stock was held for less than 91 days during the 181-day period

that began 90 days before the ex-dividend date. When counting

the number of days the corporation held the stock, you cannot

count certain days during which the corporation's risk of loss was

diminished. See section 246(c)(4) and Regulations section

1.246-5 for more details. Preferred dividends attributable to

periods totaling less than 367 days are subject to the 46-day

holding period rule discussed above.

Instructions for Form 1120

Page 20 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

c. Dividends on any share of stock to the extent the

corporation is under an obligation (including a short sale) to

make related payments with respect to positions in substantially

similar or related property.

5. Any other taxable dividend income not properly reported

elsewhere on Schedule C.

If patronage dividends or per-unit retain allocations are

included on line 20, identify the total of these amounts in a

statement attached to Form 1120.

Line 21, Column (c)

Section 247 (as affected by P.L.113-295, Div. A, section 221(a)

(41)(A), Dec. 19, 2014, 128 Stat. 4043) allows public utilities a

deduction of 40% of the smaller of (a) dividends paid on their

preferred stock during the tax year, or (b) taxable income

computed without regard to this deduction. In a year in which an

NOL occurs, compute the deduction without regard to section

247(a)(1)(B).

Line 22, Column (c)

Enter the section 250 deduction claimed for foreign-derived

intangible income (FDII) and global intangible low-taxed income

(GILTI). This should equal the sum of the amounts on Form

8993, Part III, lines 28 and 29.

Schedule J.

Tax Computation and Payment

Part I—Tax Computation

Line 1

Multiply taxable income (page 1, line 30) by 21% (0.21). Enter

this amount on line 1.

Mutual savings bank conducting life insurance business.

The tax under section 594 consists of the sum of (a) a partial tax

computed on Form 1120 on the taxable income of the bank,

determined without regard to income or deductions allocable to

the life insurance department, and (b) a partial tax on the taxable

income computed on Form 1120-L of the life insurance

department. Enter the combined tax on line 1. Attach Form

1120-L as a schedule (and identify it as such), together with the

annual statements and schedules required to be filed with Form

1120-L. See Regulations section 1.6012-2(c)(1)(ii).

Exception for insurance companies filing their federal

income tax returns electronically. If an insurance company

files its income tax return electronically, it should not include the

annual statements and schedules required to be filed with Form

1120-L. However, such statements must be available at all times

for inspection by the IRS and retained for so long as such

statements may be material in the administration of any Internal

Revenue law.

Deferred tax under section 1291. If the corporation was a

shareholder in a PFIC and received an excess distribution or

disposed of its investment in the PFIC during the year, it must

include the increase in taxes due under section 1291(c)(2) (from

Form 8621) in the total for line 1. On the dotted line next to line 1,

enter “Section 1291” and the amount.

Do not include on line 1 any interest due under section

1291(c)(3). Instead, include the amount of interest owed on

Schedule J, Part I, line 9z.

For more information on reporting the deferred tax and

interest, see the Instructions for Form 8621.

Increase in tax attributable to partner's audit liability under

section 6226. If the corporation is filing Form 8978, Partner’s

Additional Reporting Year Tax, to report adjustments shown on

Form 8986, Push Out to Partners under IRC 6226(a)(2), they

received from partnerships that have been audited and have

elected to push out imputed underpayments to their partners,

include any increase in taxes due from Form 8978, line 14, in the

total for Form 1120, Schedule J, line 1. On the dotted line next to

line 1, enter "FROM FORM 8978" and the amount. Attach Form

8978. If Form 8978, line 14, shows a decrease in tax, see the

instructions for

Schedule J, line 6.

Additional tax under section 197(f). A corporation that elects

to recognize gain and pay tax on the sale of a section 197

intangible under the related person exception to the

anti-churning rules should include any additional tax due in the

total for line 1. On the dotted line next to line 1, enter “Section

197” and the amount. See section 197(f)(9)(B)(ii).

Worksheet for Schedule C, line 9

Keep for Your Records

1. Refigure Form 1120, page 1, line 28, without any adjustment under section 1059 and without any capital loss

carryback to the tax year under section 1212(a)(1) ......................................... 1.

2. Complete lines 10, 11, 12, and 13, column (c), and enter the total here ............................

3. Subtract line 2 from line 1 ..........................................................

4. Multiply line 3 by 65% (0.65) ........................................................

5. Add lines 2, 5, 7, and 8, column (c), and the part of the deduction on line 3, column (c), that is attributable to

dividends from 20%-or-more-owned corporations .......................................... 5.

6. Enter the smaller of line 4 or line 5. If line 5 is greater than line 4, stop here; enter the amount from line 6 on line 9,

column (c), and do not complete the rest of this worksheet .................................... 6.

7. Enter the total amount of dividends from 20%-or-more-owned corporations that are included on lines 2, 3, 5, 7,

and 8, column (a) ............................................................... 7.

8. Subtract line 7 from line 3 ..........................................................

9. Multiply line 8 by 50% (0.50) ........................................................

10. Subtract line 5 from line 9, column (c) ..................................................

10.

11. Enter the smaller of line 9 or line 10 ...................................................

11.

12. Dividends-received deduction after limitation (sec. 246(b)). Add lines 6 and 11. Enter the result here and on

line 9, column (c) ............................................................... 12.

Instructions for Form 1120

Page 21 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Line 2

If the corporation had gross receipts of at least $500 million in

any 1 of the 3 tax years preceding the current tax year, complete

and attach Form 8991. Enter on line 2 the base erosion minimum

tax amount from Form 8991, Part IV, line 5e. See section 59A

and the Instructions for Form 8991. Also, see

Schedule K,

Question 22, later.

Line 3

Enter on line 3 the amount from Form 4626, Alternative Minimum

Tax—Corporations, Part II, line 13, if applicable. See the

Instructions for Form 4626.

Line 5

Line 5a. To find out when a corporation can take the credit for

payment of income tax to a foreign country or U.S. territory, see

Form 1118, Foreign Tax Credit—Corporations.

Line 5b. Enter any qualified electric vehicle passive activity

credits from prior years allowed for the current tax year from

Form 8834, Qualified Electric Vehicle Credit, line 7. Attach Form

8834.

Line 5c. Use Form 3800 to claim any general business credits.

Enter on line 5c the allowable credit from Form 3800, Part II,

line 38. See the Instructions for Form 3800.

Line 5d. Enter any allowable credit from Form 8827, Credit for

Prior Year Minimum Tax—Corporations. Complete and attach

Form 8827.

Line 5e. Enter the allowable credits from Form 8912, Credit to

Holders of Tax Credit Bonds, line 12.

Line 6

Add lines 5a through 5e. Enter the total on line 6.

Decrease attributable to partner's audit liability under sec-

tion 6226. If the corporation is filing Form 8978 to report

adjustments shown on Form 8986 they received from

partnerships that have been audited and have elected to push

out imputed underpayments to their partners, include any

decrease in taxes due (negative amount) from Form 8978,

line 14, in the total for Form 1120, Schedule J, line 6. On the

dotted line next to line 6, enter "FROM FORM 8978" and the

amount. Attach Form 8978. If Form 8978, line 14, shows an

increase in tax, see the instructions for

Schedule J, line 1.

Line 8

A corporation is taxed as a personal holding company under

section 542 if:

•

At least 60% of its adjusted ordinary gross income for the tax

year is personal holding company income, and

•

At any time during the last half of the tax year more than 50%

in value of its outstanding stock is directly or indirectly owned by

five or fewer individuals.

See Schedule PH (Form 1120) for definitions and details on

how to figure the tax.

Line 9

Include any of the following taxes and interest.

Line 9a. Recapture of investment credit. If the corporation

disposed of investment credit property or changed its use before

the end of the 5-year recapture period under section 50(a), enter

the increase in tax from Form 4255. See the Instructions for

Form 4255.

Line 9b. Recapture of low-income housing credit. If the

corporation disposed of property (or there was a reduction in the

qualified basis of the property) for which it took the low-income

housing credit, and the corporation did not follow the procedures

that would have prevented recapture of the credit, it may owe a

tax. See Form 8611.

Line 9c. Interest due under the look-back method—com-

pleted long-term contracts. If the corporation used the

percentage-of-completion method under section 460(b) for

certain long-term contracts, figure any interest due or to be

refunded using the look-back method, described in section

460(b)(2). Use Form 8697 to figure any interest due or to be

refunded. See the Instructions for Form 8697. Include any

interest due on line 9c.

Line 9d. Interest due under the look-back method—income

forecast method. If the corporation used the income forecast

method to depreciate property, it must figure any interest due or

to be refunded using the look-back method, described in section

167(g)(2). Use Form 8866 to figure any interest due or to be

refunded. See the Instructions for Form 8866. Include any

interest due on line 9d.

Line 9e. Alternative tax on qualifying shipping activities.

Enter any alternative tax on qualifying shipping activities from

Form 8902.

Line 9f. Interest/tax due under section 453A(c). Include any

interest on deferred tax attributable to certain nondealer

installment obligations (section 453A(c)).

Line 9g. Interest/tax due under section 453(l). Include any

interest on deferred tax attributable to dealer installment

obligations (section 453(l)).

Line 9z. Other. Include on line 9z additional taxes and interest

such as the following. Attach a statement showing the

computation of each item included in the total for line 9z and

identify the applicable Code section and the type of tax or

interest.

•

Recapture of Indian employment credit. Generally, if an

employer terminates the employment of a qualified employee

less than 1 year after the date of initial employment, any Indian

employment credit allowed for a prior tax year because of wages

paid or incurred to that employee must be recaptured. For

details, see Form 8845 and section 45A.

•

Recapture of new markets credit (see Form 8874 and Form

8874-B, Notice of Recapture Event for New Markets Credit).

•

Recapture of employer-provided childcare facilities and

services credit (see Form 8882).

•

Tax and interest on a nonqualified withdrawal from a capital

construction fund (section 7518(g)).

•

Interest due on deferred gain (section 1260(b)).

•

Interest due under section 1291(c)(3). See Form 8621 and the

Instructions for Form 8621.

•

Recapture of section 45Q carbon oxide sequestration credit

(see Form 8933, Part III, line 22).

Line 11

Include any deferred tax on the termination of a section 1294

election applicable to shareholders in a qualified electing fund in

the amount entered on line 11.

Subtract the following amounts from the total for line 11.

•

Deferred tax on the corporation's share of undistributed

earnings of a qualified electing fund. See the Instructions for

Form 8621.

Instructions for Form 1120

Page 22 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

•

Deferred LIFO recapture tax (section 1363(d)). This tax is the

part of the LIFO recapture tax that will be deferred and paid with

Form 1120-S in the future. To figure the deferred tax, first figure

the total LIFO recapture tax. Follow the steps below to figure the

total LIFO recapture tax and the deferred amount. Also, see

Line 10. Other Income, earlier.

Step 1. Figure the tax on the corporation's income including

the LIFO recapture amount. Complete Schedule J, Part I, lines 1

through 10.

Step 2. Using a separate worksheet, complete Schedule J

again, but do not include the LIFO recapture amount in the

corporation's taxable income.

Step 3. Compare the tax in Step 2 to the tax in Step 1. The

difference between the two is the LIFO recapture tax.

Step 4. Multiply the amount figured in Step 3 by 75% (0.75).

The result is the deferred LIFO recapture tax.

How to report. Attach a statement showing the computation of

each item included in, or subtracted from, the total for line 11. On

the dotted line next to line 11, specify (a) the applicable Code

section, (b) the type of tax, and (c) enter the amount of tax. For

example, if the corporation is deferring a $100 LIFO recapture

tax, subtract this amount from the total on line 11, then enter

“Section 1363—Deferred Tax—$100” on the dotted line next to

line 11.

Part II—Payments and Refundable Credits

Line 12

Reserved for future use.

Line 14

Enter any estimated tax payments the corporation made for the

current tax year.

Beneficiaries of trusts. If the corporation is the beneficiary of a

trust, and the trust makes a section 643(g) election to credit its

estimated tax payments to its beneficiaries, include the

corporation's share of the payment in the total for line 14. Enter

“T” and the amount of the payment on the dotted line next to the

entry space.

Line 15

If the corporation overpaid estimated tax, it may be able to get a

quick refund by filing Form 4466. The overpayment must be at

least 10% of the corporation's expected income tax liability and

at least $500. File Form 4466 after the end of the corporation's

tax year, and no later than the due date for filing the corporation’s

tax return (not including extensions). Form 4466 must be filed

before the corporation files its tax return. See the instructions for

Form 4466.

Line 18

If the corporation had federal income tax withheld from any

payments it received because, for example, it failed to give the

payer its correct EIN or was otherwise subjected to backup

withholding, include the amount withheld in the total for line 18.

Line 20. Refundable Credits

Line 20a. Credit from Form 2439. Enter any credit from Form

2439, Notice to Shareholder of Undistributed Long-Term Capital

Gains, for the corporation's share of the tax paid by a regulated

investment company (RIC) or a real estate investment trust

(REIT) on undistributed long-term capital gains included in the

corporation's income. Attach Form 2439.

Line 20b. Credit for federal tax on fuels. Enter the total

income tax credit claimed on Form 4136, Credit for Federal Tax

Paid on Fuels. Attach Form 4136.

Line 20c. Reserved for future use.

Line 20z. Other. Include on line 20z any other refundable credit

the corporation is claiming, including the following. Attach a

statement listing the type of credit and the amount of the credit.

•

Credit for tax withheld under Chapter 3 or 4 of the Internal

Revenue Code that is shown on Form 1042-S, Form 8805, or

Form 8288-A. Attach the applicable form.

•

Credit for tax on ozone-depleting chemicals. See section

4682(g)(2).

•

Credit under section 960(c) (section 960(b) for pre-2018 tax

years of foreign corporations). If an increase in the limitation

under section 960(c) (section 960(b) (pre-2018)) exceeds the

total tax on Schedule J, Part I, line 11, for the tax year, the

amount of the excess is deemed an overpayment of tax for the

tax year. See section 960(c) (section 960(b) (pre-2018)) for more

information regarding the circumstances under which such an

excess arises.

Line 22. Elective Payment Election Amount From

Form 3800

Enter on line 22 the total net elective payment election amount

from Form 3800, Part III, line 6, column (i). See the Instructions

for Form 3800.

Schedule K.

Other Information

Complete all items that apply to the corporation.

Question 2

See the list of Principal Business Activity Codes later in the

instructions. Using the list of codes and activities, determine

from which activity the corporation derives the highest

percentage of its total receipts. Enter on lines 2a, 2b, and 2c the

principal business activity code number, the corporation's

business activity, and a description of the principal product or

service of the corporation. For nonstore retailers, select the PBA

code by the primary product that your establishment sells. For

example, establishments primarily selling prescription and

non-prescription drugs, select PBA code 456110 Pharmacies &

Drug Retailers.

Question 3

Check the “Yes” box for question 3 if:

•

The corporation is a subsidiary in an affiliated group (defined

below), but is not filing a consolidated return for the tax year with

that group; or

•

The corporation is a subsidiary in a parent–subsidiary

controlled group. For a definition of a parent–subsidiary

controlled group, see the Instructions for Schedule O (Form

1120).

Any corporation that meets either of the requirements above

should check the “Yes” box. This applies even if the corporation

is a subsidiary member of one group and the parent corporation

of another.

Note. If the corporation is an “excluded member” of a controlled

group (see definition in the Instructions for Schedule O (Form

Instructions for Form 1120

Page 23 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

1120)), it is still considered a member of a controlled group for

this purpose.

Affiliated group. An affiliated group is one or more chains of

includible corporations (as defined in section 1504(b))

connected through stock ownership with a common parent

corporation. See section 1504(a). The common parent must be

an includible corporation and the following requirements must be

met.

1. The common parent must own directly stock that

represents at least 80% of the total voting power and at least

80% of the total value of the stock of at least one of the other

includible corporations.

2. Stock that represents at least 80% of the total voting

power and at least 80% of the total value of the stock of each of

the other corporations (except for the common parent) must be

owned directly by one or more of the other includible

corporations.

For this purpose, the term “stock” generally does not include

any stock that (a) is nonvoting, (b) is nonconvertible, (c) is limited

and preferred as to dividends and does not participate

significantly in corporate growth, and (d) has redemption and

liquidation rights that do not exceed the issue price of the stock

(except for a reasonable redemption or liquidation premium).

See section 1504(a)(4).

Question 4. Constructive Ownership of the

Corporation

For purposes of question 4, the constructive ownership rules of

section 267(c) (excluding section 267(c)(3)) apply to ownership

of interests in corporate stock and ownership of interests in the

profit, loss, or capital of a partnership. If the corporation checked

“Yes” to question 4a or 4b, complete and attach Schedule G

(Form 1120), Information on Certain Persons Owning the

Corporation's Voting Stock.

Question 5. Constructive Ownership of Other

Entities

For purposes of determining the corporation's constructive

ownership of other entities, the constructive ownership rules of

section 267(c) (excluding section 267(c)(3)) apply to ownership

of interests in partnerships and trusts as well as corporate stock.

Generally, if an entity (a corporation, partnership, or trust) is

owned, directly or indirectly, by or for another entity (corporation,

partnership, estate, or trust), the owned entity is considered to

be owned proportionately by or for the owners (shareholders,

partners, or beneficiaries) of the owning entity.

Question 5a

List each foreign or domestic corporation not included on Form

851, Affiliations Schedule, in which the corporation, at the end of

the tax year, owned directly 20% or more, or owned, directly or

indirectly, 50% or more of the total voting power of all classes of

stock entitled to vote. Indicate the name of the corporation, EIN

(if any), country of incorporation, and the percentage interest

owned, directly or indirectly, in the total voting power. List the

parent corporation of an affiliated group of corporations filing a

consolidated tax return rather than the subsidiary members

except for subsidiary members in which an interest is owned,

directly or indirectly, independent of the interest owned, directly

or indirectly, in the parent corporation. List a corporation owned

through a disregarded entity rather than the disregarded entity.

Question 5b

List each foreign or domestic partnership in which the

corporation, at the end of the tax year, owned directly an interest

of 20% or more, or owned, directly or indirectly, an interest of

50% or more in the profit, loss, or capital of the partnership. List

each trust in which the corporation, at the end of the tax year,

owned directly an interest of 20% or more, or owned, directly or

indirectly, an interest of 50% or more in the trust beneficial

interest. Indicate the name, EIN (if any), country of organization,

and the maximum percentage interest owned, directly or

indirectly, in the profit, loss, or capital of the partnership at the

end of the partnership tax year, or, for a trust, the percentage

interest owned in the trust beneficial interest. List a partnership

or trust owned through a disregarded entity rather than the

disregarded entity.

Maximum percentage owned in partnership profit, loss, or

capital. For the purposes of question 5b, the term “maximum

percentage owned” means the highest percentage of interest in

a partnership's profit, loss, or capital as of the end of the

partnership's tax year, as determined under the partnership

agreement, when taking into account the constructive ownership

rules, earlier. If the partnership agreement does not express the

partner's share of profit, loss, and capital as fixed percentages,

use a reasonable method in arriving at the percentage items for

the purposes of completing question 5b. Such method must be

consistent with the partnership agreement. The method used to

compute a percentage share of profit, loss, and capital must be

applied consistently from year to year. Maintain records to

support the determination of the share of profits, losses, and

capital.

Example. Corporation A owns, directly, a 50% interest in the

profit, loss, or capital of Partnership B. Corporation A also owns,

directly, a 15% interest in the profit, loss, or capital of Partnership

C and owns, directly, 15% of the voting stock of Corporation D.

Partnership B owns, directly, a 70% interest in the profit, loss, or

capital of Partnership C and owns, directly, 70% of the voting

stock of Corporation D. Corporation A owns, indirectly, through

Partnership B, a 35% interest (50% of 70%) in the profit, loss, or

capital of Partnership C and owns, indirectly, 35% of the voting

stock of Corporation D. Corporation A owns, directly or indirectly,

a 50% interest in the profit, loss, or capital of Partnership C (15%

directly and 35% indirectly), and owns, directly or indirectly, 50%

of the voting stock of Corporation D (15% directly and 35%

indirectly).

Corporation A reports in its answer to question 5a that it

owns, directly or indirectly, 50% of the voting stock of

Corporation D. Corporation A reports in its answer to question 5b

that it owns, directly, an interest of 50% in the profit, loss, or

capital of Partnership B and owns, directly or indirectly, 50% of

the profit, loss, or capital of Partnership C.

Question 7

Check the “Yes” box if one foreign person owned at least 25% of

the total voting power of all classes of stock of the corporation

entitled to vote or at least 25% of the total value of all classes of

stock of the corporation.

The constructive ownership rules of section 318 apply in

determining if a corporation is foreign owned. See section

6038A(c)(5) and the related regulations.

Enter on line 7a the percentage owned by the foreign person

specified in question 7. On line 7b, enter the name of the owner’s

country.

Note. If there is more than one 25%-or-more foreign owner,

complete question 7 for the foreign person with the highest

percentage of ownership.

Instructions for Form 1120

Page 24 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Foreign person. The term “foreign person” means:

•

An individual who is not a citizen or resident of the United

States;

•

An individual who is a citizen or resident of a U.S. territory who

is not otherwise a citizen or resident of the United States;

•

Any partnership, association, company, or corporation that is

not created or organized in the United States;

•

Any foreign estate or trust within the meaning of section

7701(a)(31); or

•

A foreign government (or one of its agencies or

instrumentalities) to the extent that it is engaged in the conduct

of a commercial activity, as described in

section 892.

However, the term "foreign person" does not include any

foreign person who consents to the filing of a joint U.S. income

tax return.

Owner's country. For individuals, the term “owner's country”

means the country of residence. For all others, it is the country

where incorporated, organized, created, or administered.

Requirement to file Form 5472. If the corporation checked

“Yes,” it may have to file Form 5472, Information Return of a 25%

Foreign-Owned U.S. Corporation or a Foreign Corporation

Engaged in a U.S. Trade or Business. Generally, a 25%

foreign-owned corporation that had a reportable transaction with

a foreign or domestic related party during the tax year must file

Form 5472. See the Instructions for Form 5472, for filing

instructions and penalties for failure to file.

Item 9

Show any tax-exempt interest received or accrued. Include any

exempt-interest dividends received as a shareholder in a mutual

fund or other RIC. Also, if required, include the same amount on

Schedule M-1, line 7 (or Schedule M-3 (Form 1120), Part II,

line 13, if applicable).

Item 11

Generally, if the corporation has an NOL for tax year 2023, it can

elect to waive the entire carryback period for the NOL and

instead carry the NOL forward to future tax years. To do so,

check the box on line 11 and file the tax return by its due date,

including extensions. Do not attach the statement described in

Temporary Regulations section 301.9100-12T. Generally, once

made, the election is irrevocable.

If the corporation timely filed its return for the loss year without

making the election, it can make the election on an amended

return filed within 6 months of the due date of the loss year return

(excluding extensions). Attach the election to the amended

return and write "Filed pursuant to section 301.9100-2" on the

election statement. See the Instructions for Form 1139.

Corporations filing a consolidated return that elect to waive

the entire carryback period for the group must also attach the

statement required by Regulations section 1.1502-21(b)(3) or

the election will not be valid.

Item 12

Enter the amount of the NOL carryover to the tax year from prior

years, even if some of the loss is used to offset income on this

return. The amount to enter is the total of all NOLs generated in

prior years but not used to offset income (either as a carryback

or carryover) to a tax year prior to 2023. Do not reduce the

amount by any NOL deduction reported on line 29a.

Question 14

A corporation that files Form 1120 must file Schedule UTP (Form

1120), Uncertain Tax Position Statement, with its 2023 income

tax return if:

•

For 2023, the corporation's total assets equal or exceed $10

million;

•

The corporation or a related party issued audited financial

statements reporting all or a portion of the corporation's

operations for all or a portion of the corporation's tax year; and

•

The corporation has one or more tax positions that must be

reported on Schedule UTP.

Attach Schedule UTP to the corporation's income tax return.

Do not file it separately. A taxpayer that files a protective Form

1120 must also file Schedule UTP if it satisfies the requirements

set forth above.

For details, see the Instructions for Schedule UTP.

Questions 15a and 15b

If the corporation made any payment in 2023 that would require

the corporation to file any Form(s) 1099, check the “Yes” box for

question 15a and answer question 15b. Otherwise, check the

“No” box for question 15a and skip question 15b. See Am I

Required to File a Form 1099 or Other Information Return? on

IRS.gov.

Question 19

If the corporation made any payments in 2023 that would require

the corporation to file any Forms 1042, Annual Withholding Tax

Return for U.S. Source Income of Foreign Persons, and 1042-S,

Foreign Person's U.S. Source Income Subject to Withholding,

check the “Yes” box. See the Instructions for Form 1042 and

Instructions for Form 1042

-S for information regarding who is

required to file Forms 1042 and 1042-S and what types of

payments are subject to reporting on Forms 1042 and 1042

-S.

Question 21

If the corporation paid or accrued (including through a

partnership) any interest or royalty for which a deduction is not

allowed under section 267A, check "Yes" for question 21 and

enter the total amount for which a deduction is not allowed.

Payments to which section 267A applies. Interest or royalty

paid or accrued by a domestic corporation (including, in the case

of a domestic corporation that is a partner in a partnership, the

domestic corporation's allocable share of interest or royalty paid

or accrued by the partnership) is subject to section 267A.

Section 267A generally applies to interest or royalty paid or

accrued according to a hybrid arrangement (such as, for

example, a payment according to a hybrid instrument, or a

payment to a reverse hybrid), provided that the payment or

accrual is to a related party (or according to a structured

arrangement). In addition, under an imported mismatch rule,

section 267A generally applies to interest or royalties paid or

accrued according to a non-hybrid arrangement where the

income attributable to that payment or accrual is directly or

indirectly offset by certain deductions involving hybridity incurred

by a related party or according to a structured arrangement.

However, section 267A does not apply if a de minimis exception

is satisfied. See Regulations section 1.267A-1(c). For purposes

of section 267A, interest and royalties are defined broadly. For

additional information about arrangements subject to section

267A, see Regulations sections 1.267A-2 and 1.267A-4. Also,

see the anti-avoidance rule under Regulations section

1.267A-5(b)(6).

Extent to which deduction is disallowed. When section

267A applies to interest or royalties paid or accrued pursuant to

a hybrid arrangement, it generally disallows a deduction for the

amount to the extent that, under the foreign tax law, there is not a

corresponding income inclusion (including long-term deferral).

However, the deduction is not disallowed to the extent the

amount is directly or indirectly included in income in the United

States, such as if the amount is taken into account with respect

Instructions for Form 1120

Page 25 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

to a U.S. shareholder under section 951(a) or section 951A. For

additional information, see Regulations sections 1.267A-2

through 1.267A-4. For examples illustrating the application of

section 267A, see Regulations section 1.267A-6.

Question 22

If the corporation had gross receipts of at least $500 million in

any 1 of the 3 preceding tax years, complete and attach Form

8991. For this purpose, the corporation's gross receipts include

the gross receipts of all persons aggregated with the

corporation, as specified in section 59A(e)(3). See the

Instructions for Form 8991 to determine if the corporation is

subject to the base erosion minimum tax.

Question 23

The limitation on business interest expense applies to every

taxpayer with a trade or business, unless the taxpayer meets

certain specified exceptions. A taxpayer may elect out of the

limitation for certain businesses otherwise subject to the

business interest expense limitation. See

Question 24. Also, see

the Instructions for Form 8990.

Certain real property trades or businesses and farming

businesses qualify to make an election not to limit business

interest expense. This is an irrevocable election. If you make this

election, you are required to use the alternative depreciation

system to depreciate any nonresidential real property, residential

rental property, and qualified improvement property for an

electing real property trade or business, and any property with a

recovery period of 10 years or more for an electing farming

business. See section 168(g)(1)(F). Also, you are not entitled to

the special depreciation allowance for that property. For a

taxpayer with more than one qualifying business, the election is

made with respect to each business.

Check “Yes” if the corporation has an election in effect to

exclude a real property trade or business or a farming business

from section 163(j). For more information, see the Instructions for

Form 8990.

Question 24

Generally, a taxpayer with a trade or business must file Form

8990 to claim a deduction for business interest. In addition, Form

8990 must be filed by any taxpayer that owns an interest in a

partnership with current-year, or prior-year carryover, excess

business interest expense allocated from the partnership.

Exclusions from filing. A taxpayer is not required to file Form

8990 if the taxpayer is a small business taxpayer (defined below)

and does not have excess business interest expense from a

partnership. A taxpayer also is not required to file Form 8990 if

the taxpayer only has business interest expense from these

excepted trades or businesses:

•

An electing real property trade or business,

•

An electing farming business, or

•

Certain utility businesses.

Small business taxpayer. A small business taxpayer is not

subject to the business interest expense limitation and is not

required to file Form 8990. A small business taxpayer is a

taxpayer that (a) is not a tax shelter (as defined in section 448(d)

(3)), and (b) meets the gross receipts test of section 448(c),

discussed next.

Gross receipts test. For 2023, a taxpayer meets the gross

receipts test if the taxpayer has average annual gross receipts of

$29 million or less for the 3 prior tax years. A taxpayer's average

annual gross receipts for the 3 prior tax years is determined by

adding the gross receipts for the 3 prior tax years and dividing

the total by 3. Gross receipts include the aggregate gross

receipts from all persons treated as a single employer, such as a

controlled group of corporations, commonly controlled

partnerships, or proprietorships, and affiliated service groups.

See section 448(c) and the Instructions for Form 8990 for

additional information.

Question 25

To certify as a QOF, the corporation must file Form 1120 and

attach Form 8996, even if the corporation had no income or

expenses to report. If the corporation is attaching Form 8996,

check the “Yes” box for question 25. On the line following the

dollar sign, enter the amount from Form 8996, line 15.

The penalty reported on this line from Form 8996, line 15, is

not due with the filing of this form. The IRS will separately send

to you a notice setting forth the due date for the penalty payment

and where that payment should be sent.

Question 26

Check the “Yes” box if:

1. On or after December 22, 2017, a foreign corporation

directly or indirectly acquired substantially all of the properties

held directly or indirectly by the corporation; and

2. The ownership percentage with respect to the acquisition

was greater than 50% (by vote or by value).

If “Yes” is checked, also enter in the space provided the

ownership percentage both by vote and by value. If there are

multiple acquisitions that must be reported, enter the ownership

for the most recent acquisition. Attach a statement reporting the

ownership percentage by vote and by value for the other

acquisitions.

Section 7874 applies in certain cases in which a foreign

corporation directly or indirectly acquires substantially all of the

properties of a domestic corporation. Generally, it applies when

three requirements are satisfied.

1. Pursuant to a plan or series of related transactions, a

foreign corporation must acquire directly or indirectly

substantially all of the properties held directly or indirectly by a

domestic corporation.

2. After the acquisition, the ownership percentage (by vote

or value) must be at least 60%.

3. After the acquisition, the expanded affiliated group that

includes the foreign acquiring corporation must not have

substantial business activities in the foreign country in which the

foreign acquiring corporation is created or organized.

When section 7874 applies, the tax treatment of the

acquisition depends on the ownership percentage. If the

ownership percentage is at least 80%, then the foreign acquiring

corporation is treated as a domestic corporation for all purposes

of the Internal Revenue Code. See section 7874(b). If the

ownership percentage is at least 60% but less than 80%, then

the foreign acquiring corporation is respected as a foreign

corporation, but the domestic corporation and certain other

persons are subject to special rules that reduce the tax benefits

of the acquisition. See section 7874(a).

See the regulations under section 7874 for rules regarding

the computation of the ownership percentage. See sections

59A(d)(4), 965(l), 4501(d), and 4985 for additional rules

regarding the tax treatment of certain expatriated entities.

Question 27

Digital assets are any digital representations of value that are

recorded on a cryptographically secured distributed ledger or

any similar technology. For example, digital assets include

non-fungible tokens (NFTs) and virtual currencies, such as

cryptocurrencies and stablecoins. If a particular asset has the

characteristics of a digital asset, it will be treated as a digital

asset for federal income tax purposes.

Instructions for Form 1120

Page 26 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Check the “Yes” box if at any time during 2023 the corporation

received (as a reward, award, or payment for property or

services); or (b) sold, exchanged, or otherwise disposed of a

digital asset (or any financial interest in any digital asset).

For example, check “Yes” if at any time during 2023 the

corporation:

•

Received digital assets as payment for property or services

provided;

•

Received digital assets as a result of a reward or award;

•

Received new digital assets as a result of mining, staking, and

similar activities;

•

Received digital assets as a result of a hard fork;

•

Disposed of digital assets in exchange for property or

services;

•

Disposed of a digital asset in exchange or trade for another

digital asset;

•

Sold a digital asset; or

•

Otherwise disposed of any other financial interest in a digital

asset.

The corporation has a financial interest in a digital asset if it is

the owner of record of a digital asset, or has an ownership stake

in an account that holds one or more digital assets, including the

rights and obligations to acquire a financial interest, or owns a

wallet that holds digital assets.

The following actions or transactions in 2023, alone, generally

do not require the corporation to check “Yes:"

•

Holding a digital asset in a wallet or account;

•

Transferring a digital asset from one wallet or account the

corporation owns or controls to another wallet or account that it

owns or controls; or

•

Purchasing digital assets using U.S. or other real currency,

including through the use of electronic platforms such as PayPal

and Venmo.

Do not leave the question unanswered. The corporation must

answer "Yes" or “No” by checking the appropriate box. For more

information, go to IRS.gov/virtualcurrencyfaqs.

If the corporation disposed of any digital asset which was

held as a capital asset, through a sale, trade, exchange,

payment, or other transfer, use Form 8949 to calculate the

capital gain or loss and report that gain or loss on Schedule D

(Form 1120). If the corporation received any digital asset as

compensation for services or disposed of any digital asset that

was held for sale to customers in a trade or business, it must

report the income as it would report other income of the same

type.

Question 28

If the corporation is a member of a controlled group, check the

"Yes" box. Complete and attach Schedule O (Form 1120),

Consent Plan and Apportionment Schedule for a Controlled

Group. Component members of a controlled group must use

Schedule O to report the apportionment of certain tax benefits

between the members of the group. See Schedule O and the

Instructions for Schedule O for more information.

Question 29

Check the appropriate boxes to indicate if the corporation is

required to file Form 4626. If the corporation does not meet the

requirements of the safe harbor method, as provided under

section 59(k)(3)(A) and Notice 2023-7, 2023-3 I.R.B. 390,

available at

IRS.gov/irb/2023-03_IRB#NOT-2023-7, for the

current year, Form 4626 must be completed and attached to the

corporation's return. See the instructions for Form 4626.

Question 30

Under section 4501, the corporation may be required to file Form

7208, Excise Tax on Repurchase of Corporate Stock, and pay

the stock repurchase excise tax if, during the corporation's

taxable year, (a) the corporation is publicly traded and

repurchased its stock (or a specified affiliate of the corporation

acquired the corporation's stock); (b) the corporation is a

specified affiliate of an applicable foreign corporation; or (c) the

corporation is an expatriated entity with respect to a covered

surrogate foreign corporation.

Do not complete a Form 7208 until the date specified in

upcoming regulations under section 4501. For additional

information, see section 4501 and Announcement 2023-18,

2023-30 I.R.B. 366, available at

IRS.gov/irb/

2023-30_IRB#ANN-2023-18.

Question 31

If the answer to question 31 is “Yes,” attach a statement titled

“Schedule K Statement of Subchapter K Basis Adjustments” that

includes the information required for each tax basis adjustment

described in (1) through (4) below. Provide the required

information for each partnership where 80 % or more of the

capital or profits of the partnership is owned, directly or indirectly,

by members of the corporation's controlled group of corporations

(as defined in section 1563). If there are unrelated third-party

minority partner interests in the partnership, the corporation is

not required to include such partners' information on this

statement.

1. If the adjusted basis of a partner's partnership interest

differs from the partner's share of the partnership's adjusted

basis of partnership property by $10 million or more at the end of

the tax year and at any other relevant date (for example, at the

time of a transfer of a partnership interest or the liquidation of a

partnership) provide the partnership's name and TIN, partner's

name and TIN, and the amount and allocation of such difference

for each partner.

2. If a partnership makes a basis adjustment of $10 million

or more at the end of the tax year and at any other relevant date,

pursuant to section 743 (including section 743(d)) upon the

transfer of a partnership interest in such partnership to a partner

that is, directly or indirectly, a controlled group member, provide

the partnership's name and TIN, name and TIN of the transferor

partner and transferee partner, and the amount and allocation of

the basis adjustment.

3. If a partnership makes a basis adjustment that is $10

million or more at the end of the tax year and at any other

relevant date made pursuant to section 734 (including section

734(d)) upon the distribution of property to a controlled group

member (directly or indirectly), provide the name and TIN of

each partnership, the name and TIN of the controlled group

member, and a schedule detailing the amount and allocation of

the adjustment.

4. If a partnership distributed property, directly or indirectly,

to a controlled group member, and the controlled group

member's basis in the property under section 732(a) or (b)

differs from the partnership's basis in the property immediately

before the distribution by $10 million or more at the end of the tax

year and at any other relevant date, provide the partnership's

name and TIN, the name and TIN of the controlled group

member, and the amount and allocation of the basis adjustment.

Schedule L.

Balance Sheets per Books

The balance sheets should agree with the corporation's books

and records.

Corporations with total receipts (page 1, line 1a plus lines 4

through 10) and total assets at the end of the tax year less than

$250,000 are not required to complete Schedules L, M-1, and

M-2 if the “Yes” box on Schedule K, question 13, is checked.

Instructions for Form 1120

Page 27 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Corporations with total assets nonconsolidated (or

consolidated for all corporations included within the consolidated

tax group) of $10 million or more on the last day of the tax year

must file Schedule M-3 (Form 1120) instead of Schedule M-1.

However, see the instructions for Schedule M-1 below. See the

separate Instructions for Schedule M-3 (Form 1120) for

provisions that also affect Schedule L.

If filing a consolidated return, report total consolidated assets,

liabilities, and shareholder's equity for all corporations joining in

the return. See Consolidated Return, earlier.

Line 1

Include certificates of deposit as cash on this line.

Line 5

Include on this line:

•

State and local government obligations, the interest on which

is excludable from gross income under section 103(a), and

•

Stock in a mutual fund or other RIC that distributed

exempt-interest dividends during the tax year of the corporation.

Line 26

Some examples of adjustments to report on this line include:

•

Unrealized gains and losses on securities held “available for

sale,”

•

Foreign currency translation adjustments,

•

The excess of additional pension liability over unrecognized

prior service cost,

•

Guarantees of employee stock (ESOP) debt, and

•

Compensation related to employee stock award plans.

If the total adjustment to be entered on line 26 is a negative

amount, enter the amount in parentheses.

Schedule M-1. Reconciliation of

Income (Loss) per Books With

Income per Return

In completing Schedule M-1, the following apply.

•

Corporations with total receipts (page 1, line 1a plus lines 4

through 10)

and total assets at the end of the tax year less than

$250,000 are not required to complete Schedules L, M-1, and

M-2 if the “Yes” box on Schedule K, question 13, is checked.

•

Corporations with total assets non-consolidated (or

consolidated for all corporations included within the consolidated

tax group) of $10 million or more on the last day of the tax year

must file Schedule M-3 (Form 1120) instead of Schedule M-1.

•

A corporation filing Form 1120 that is not required to file

Schedule M-3 may voluntarily file Schedule M-3 instead of

Schedule M-1. See the Instructions for Schedule M-3 (Form

1120) for more information.

•

Corporations that (a) are required to file Schedule M-3 (Form

1120) and have less than $50 million total assets at the end of

the tax year, or (b) are not required to file Schedule M-3 (Form

1120) and voluntarily file Schedule M-3 (Form 1120), must either

(i) complete Schedule M-3 (Form 1120) entirely, or (ii) complete

Schedule M-3 (Form 1120) through Part I, and complete Form

1120, Schedule M-1, instead of completing Parts II and III of

Schedule M-3 (Form 1120). If the corporation chooses to

complete Schedule M-1 instead of completing Parts II and III of

Schedule M-3, the amount on Schedule M-1, line 1, must equal

the amount on Schedule M-3, Part I, line 11. See the Instructions

for Schedule M-3 (Form 1120) for more information.

Line 5c

Include any of the following applicable expenses.

•

Entertainment expenses not deductible under section 274(a).

•

Meal expenses not deductible under section 274(n).

•

Qualified transportation fringes not deductible under section

274(a)(4).

•

Expenses for the use of an entertainment facility.

•

The part of business gifts over $25.

•

Expenses of an individual over $2,000, allocable to

conventions on cruise ships.

•

Employee achievement awards of nontangible or tangible

property over $400 ($1,600 if part of a qualified plan).

•

The cost of skyboxes.

•

Nondeductible club dues.

•

The part of luxury water travel expenses not deductible under

section 274(m).

•

Expenses for travel as a form of education.

•

Other nondeductible travel and entertainment expenses.

Line 7

Report any tax-exempt interest received or accrued, including

any exempt-interest dividends received as a shareholder in a

mutual fund or other RIC. Also, report this same amount on

Schedule K, item 9.

The corporation should include tax-exempt income from

forgiven PPP loans on line 7 of Schedule M-1 (if it was included

on line 1 of the Schedule M-1), or on Part II, line 25 of

Schedule M-3 (Form 1120), column (c) as a negative number (if

it was included on line 25 in column (a) as Income per Income

Statement).

Schedule M-2. Analysis of

Unappropriated Retained Earnings

per Books

If the corporation treats tax-exempt income resulting from a PPP

loan as received or accrued prior to when forgiveness of the PPP

loan is granted and the amount of forgiveness granted is less

than the amount of tax-exempt income that was previously

treated as received or accrued, the corporation should include

the difference as a decrease in tax-exempt income on

Schedule M-2, line 6, for the tax year in which the taxpayer

receives notice that the PPP loan was not fully forgiven. The

corporation should attach a statement to Schedule M-2 including

the following information:

1. The corporation's name, address, and EIN;

2. A statement that the corporation is making adjustments in

accordance with section 3.03 of Rev. Proc. 2021-48; and

3. The tax year for which tax-exempt income was originally

reported, the amount of tax-exempt income that was originally

reported for such tax year, and the amount of tax-exempt income

being adjusted on Schedule M-2.

Instructions for Form 1120

Page 28 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Paperwork Reduction Act Notice. We ask for the information on these forms to carry out the Internal Revenue laws of the United

States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to

figure and collect the right amount of tax.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form

displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents

may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,

as required by section 6103.

Estimates of Taxpayer Burden. The following tables show burden estimates based on current statutory requirements as of

December 2023 for taxpayers filing 2023 Forms 1065, 1120, 1120-C, 1120-F, 1120-H, 1120-ND, 1120-S, 1120-SF, 1120-FSC, 1120-L,

1120-PC, 1066, 1120-REIT, 1120-RIC, 1120-POL, and related attachments. Time spent and out-of-pocket costs are presented

separately. Time burden is broken out by taxpayer activity, with reporting representing the largest component. Out-of-pocket costs

include any expenses incurred by taxpayers to prepare and submit their tax returns. Examples include tax return preparation and

submission fees, postage and photocopying costs, and tax preparation software costs. While these estimates don't include burden

associated with post-filing activities, IRS operational data indicate that electronically prepared and filed returns have fewer arithmetic

errors, implying lower post-filing burden.

Reported time and cost burdens are national averages and don't necessarily reflect a “typical” case. Most taxpayers experience

lower than average burden, with taxpayer burden varying considerably by taxpayer type.

The average burden for partnerships filing Forms 1065 and related attachments is about 60 hours and $5,000; the average burden

for corporations filing Form 1120 and associated forms is about 105 hours and $6,700; and the average burden for Forms 1066,

1120-REIT, 1120-RIC, 1120S, and all related attachments is 65 hours and $4,400. Within each of these estimates there is significant

variation in taxpayer activity. Tax preparation fees and other out-of-pocket costs vary extensively depending on the tax situation of the

taxpayer, the type of software or professional preparer used, and the geographic location. Third-party burden hours are not included in

these estimates.

Table 1 – Taxpayer Burden for Entities Taxed as Partnerships

Forms 1065, 1066, and all attachments

Primary Form Filed or Type of

Taxpayer

Total Number of Returns

(millions)

Average Time (hours) Average Cost ($) Average Monetized

Burden ($)

All Partnerships 5.3 60 5,000 8,700

Small 4.9 50 3,200 5,200

Large* 0.4 200 27,800 50,800

*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and

pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Table 2 – Taxpayer Burden for Entities Taxed as Taxable Corporations

Forms 1120, 1120-C, 1120-F, 1120-H, 1120-ND, 1120-SF, 1120-FSC, 1120-L, 1120-PC, 1120-POL, and all attachments

Primary Form Filed or Type of

Taxpayer

Total Number of Returns

(millions)

Average Time (hours) Average Cost ($) Average Monetized

Burden ($)

All Taxable Corporations 2.1 105 6,700 14,900

Small 2.0 55 3,600 6,200

Large* 0.1 830 53,800 149,000

*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and

pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Table 3 – Taxpayer Burden for Entities Taxed as Pass-Through Corporations

Forms 1120-REIT, 1120-RIC, 1120-S, and all attachments

Primary Form Filed or Type of

Taxpayer

Total Number of Returns

(millions)

Average Time (hours) Average Cost ($) Average Monetized

Burden ($)

All Pass-Through Corporations 5.8 65 4,400 7,500

Small 5.7 60 3,800 6,400

Large* 0.1 295 37,700 71,800

*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and

pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Comments. If you have comments concerning the accuracy of these time estimates or suggestions for making these forms simpler,

we would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to the Internal

Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send the tax form

to this address. Instead, see Where To File, earlier, near the beginning of the instructions.

Instructions for Form 1120

Page 29 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Principal Business Activity Codes

This list of principal business activities and their

associated codes is designed to classify an enterprise

by the type of activity in which it is engaged to facilitate

the administration of the Internal Revenue Code. These

principal business activity codes are based on the North

American Industry Classification System.

Using the list of activities and codes below,

determine from which activity the company derives the

largest percentage of its “total receipts.” Total receipts is

defined as the sum of gross receipts or sales (page 1,

line 1a) plus all other income (page 1, lines 4 through

10). If the company purchases raw materials and

supplies them to a subcontractor to produce the finished

product, but retains title to the product, the company is

considered a manufacturer and must use one of the

manufacturing codes (311110–339900).

Once the principal business activity is determined,

entries must be made on Form 1120, Schedule K, lines

2a, 2b, and 2c. On line 2a, enter the six-digit code

selected from the list below. On line 2b, enter the

company's business activity. On line 2c, enter a brief

description of the principal product or service of the

company.

Agriculture, Forestry, Fishing,

and Hunting

Crop Production

111100 Oilseed & Grain Farming

111210 Vegetable & Melon Farming

(including potatoes & yams)

111300 Fruit & Tree Nut Farming

111400 Greenhouse, Nursery, &

Floriculture Production

111900 Other Crop Farming (including

tobacco, cotton, sugarcane, hay,

peanut, sugar beet, & all other

crop farming)

Animal Production

112111 Beef Cattle Ranching & Farming

112112 Cattle Feedlots

112120 Dairy Cattle & Milk Production

112210 Hog & Pig Farming

112300 Poultry & Egg Production

112400 Sheep & Goat Farming

112510 Aquaculture (including shellfish &

finfish farms & hatcheries)

112900 Other Animal Production

Forestry and Logging

113110 Timber Tract Operations

113210 Forest Nurseries & Gathering of

Forest Products

113310 Logging

Fishing, Hunting, and Trapping

114110 Fishing

114210 Hunting & Trapping

Support Activities for Agriculture and

Forestry

115110 Support Activities for Crop

Production (including cotton

ginning, soil preparation,

planting, & cultivating)

115210 Support Activities for Animal

Production (including farriers)

115310 Support Activities for Forestry

Mining

211120 Crude Petroleum Extraction

211130 Natural Gas Extraction

212110 Coal Mining

212200 Metal Ore Mining

212310 Stone Mining & Quarrying

212320 Sand, Gravel, Clay, & Ceramic &

Refractory Minerals Mining &

Quarrying

212390 Other Nonmetallic Mineral

Mining & Quarrying

213110 Support Activities for Mining

Utilities

221100 Electric Power Generation,

Transmission & Distribution

221210 Natural Gas Distribution

221300 Water, Sewage & Other Systems

221500 Combination Gas & Electric

Construction

Construction of Buildings

236110 Residential Building Construction

236200 Nonresidential Building

Construction

Heavy and Civil Engineering

Construction

237100 Utility System Construction

237210 Land Subdivision

237310 Highway, Street, & Bridge

Construction

237990 Other Heavy & Civil Engineering

Construction

Specialty Trade Contractors

238100 Foundation, Structure, & Building

Exterior Contractors (including

framing carpentry, masonry,

glass, roofing, & siding)

238210 Electrical Contractors

238220 Plumbing, Heating, &

Air-Conditioning Contractors

238290 Other Building Equipment

Contractors

238300 Building Finishing Contractors

(including drywall, insulation,

painting, wallcovering, flooring,

tile, & finished carpentry)

238900 Other Specialty Trade

Contractors (including site

preparation)

Manufacturing

Food Manufacturing

311110 Animal Food Mfg

311200 Grain & Oilseed Milling

311300 Sugar & Confectionery Product

Mfg

311400 Fruit & Vegetable Preserving &

Specialty Food Mfg

311500 Dairy Product Mfg

311610 Animal Slaughtering &

Processing

311710 Seafood Product Preparation &

Packaging

311800 Bakeries, Tortilla & Dry Pasta Mfg

311900 Other Food Mfg (including

coffee, tea, flavorings &

seasonings)

Beverage and Tobacco Product

Manufacturing

312110 Soft Drink & Ice Mfg

312120 Breweries

312130 Wineries

312140 Distilleries

312200 Tobacco Manufacturing

Textile Mills and Textile Product Mills

313000 Textile Mills

314000 Textile Product Mills

Apparel Manufacturing

315100 Apparel Knitting Mills

315210 Cut & Sew Apparel Contractors

315250 Cut & Sew Apparel Mfg (except

Contractors)

315990 Apparel Accessories & Other

Apparel Mfg

Leather and Allied Product

Manufacturing

316110 Leather & Hide Tanning &

Finishing

316210 Footwear Mfg (including rubber &

plastics)

316990 Other Leather & Allied Product

Mfg

Wood Product Manufacturing

321110 Sawmills & Wood Preservation

321210 Veneer, Plywood, & Engineered

Wood Product Mfg

321900 Other Wood Product Mfg

Paper Manufacturing

322100 Pulp, Paper, & Paperboard Mills

322200 Converted Paper Product Mfg

Printing and Related Support Activities

323100 Printing & Related Support

Activities

Petroleum and Coal Products

Manufacturing

324110 Petroleum Refineries (including

integrated)

324120 Asphalt Paving, Roofing, &

Saturated Materials Mfg

324190 Other Petroleum & Coal Products

Mfg

Chemical Manufacturing

325100 Basic Chemical Mfg

325200 Resin, Synthetic Rubber, &

Artificial & Synthetic Fibers &

Filaments Mfg

325300 Pesticide, Fertilizer, & Other

Agricultural Chemical Mfg

325410 Pharmaceutical & Medicine Mfg

325500 Paint, Coating, & Adhesive Mfg

325600 Soap, Cleaning Compound, &

Toilet Preparation Mfg

325900 Other Chemical Product &

Preparation Mfg

Plastics and Rubber Products

Manufacturing

326100 Plastics Product Mfg

326200 Rubber Product Mfg

Nonmetallic Mineral Product

Manufacturing

327100 Clay Product & Refractory Mfg

327210 Glass & Glass Product Mfg

327300 Cement & Concrete Product Mfg

327400 Lime & Gypsum Product Mfg

327900 Other Nonmetallic Mineral

Product Mfg

Primary Metal Manufacturing

331110 Iron & Steel Mills & Ferroalloy

Mfg

331200 Steel Product Mfg from

Purchased Steel

331310 Alumina & Aluminum Production

& Processing

331400 Nonferrous Metal (except

Aluminum) Production &

Processing

331500 Foundries

Fabricated Metal Product

Manufacturing

332110 Forging & Stamping

332210 Cutlery & Handtool Mfg

332300 Architectural & Structural Metals

Mfg

332400 Boiler, Tank, & Shipping

Container Mfg

332510 Hardware Mfg

332610 Spring & Wire Product Mfg

332700 Machine Shops; Turned Product;

& Screw, Nut, & Bolt Mfg

332810 Coating, Engraving, Heat

Treating, & Allied Activities

332900 Other Fabricated Metal Product

Mfg

Machinery Manufacturing

333100 Agriculture, Construction, &

Mining Machinery Mfg

333200 Industrial Machinery Mfg

333310 Commercial & Service Industry

Machinery Mfg

333410 Ventilation, Heating,

Air-Conditioning, & Commercial

Refrigeration Equipment Mfg

333510 Metalworking Machinery Mfg

333610 Engine, Turbine & Power

Transmission Equipment Mfg

333900 Other General Purpose

Machinery Mfg

Computer and Electronic Product

Manufacturing

334110 Computer & Peripheral

Equipment Mfg

334200 Communications Equipment Mfg

334310 Audio & Video Equipment Mfg

334410 Semiconductor & Other

Electronic Component Mfg

334500 Navigational, Measuring,

Electromedical, & Control

Instruments Mfg

334610 Manufacturing & Reproducing

Magnetic & Optical Media

Electrical Equipment, Appliance, and

Component Manufacturing

335100 Electric Lighting Equipment Mfg

335200 Household Appliance Mfg

335310 Electrical Equipment Mfg

335900 Other Electrical Equipment &

Component Mfg

Transportation Equipment

Manufacturing

336100 Motor Vehicle Mfg

336210 Motor Vehicle Body & Trailer Mfg

336300 Motor Vehicle Parts Mfg

336410 Aerospace Product & Parts Mfg

336510 Railroad Rolling Stock Mfg

336610 Ship & Boat Building

336990 Other Transportation Equipment

Mfg

Furniture and Related Product

Manufacturing

337000 Furniture & Related Product

Manufacturing

Miscellaneous Manufacturing

339110 Medical Equipment & Supplies

Mfg

339900 Other Miscellaneous

Manufacturing

Wholesale Trade

Merchant Wholesalers, Durable Goods

423100 Motor Vehicle & Motor Vehicle

Parts & Supplies

423200 Furniture & Home Furnishings

423300 Lumber & Other Construction

Materials

423400 Professional & Commercial

Equipment & Supplies

423500 Metal & Mineral (except

Petroleum)

423600 Household Appliances &

Electrical & Electronic Goods

423700 Hardware, Plumbing, & Heating

Equipment & Supplies

423800 Machinery, Equipment, &

Supplies

423910 Sporting & Recreational Goods &

Supplies

423920 Toy & Hobby Goods & Supplies

423930 Recyclable Materials

423940 Jewelry, Watch, Precious Stone,

& Precious Metals

423990 Other Miscellaneous Durable

Goods

Merchant Wholesalers, Nondurable

Goods

424100 Paper & Paper Products

424210 Drugs & Druggists' Sundries

424300 Apparel, Piece Goods, & Notions

424400 Grocery & Related Products

424500 Farm Product Raw Materials

424600 Chemical & Allied Products

424700 Petroleum & Petroleum Products

424800 Beer, Wine, & Distilled Alcoholic

Beverages

424910 Farm Supplies

424920 Book, Periodical, & Newspapers

424930 Flower, Nursery Stock, & Florists'

Supplies

424940 Tobacco Products & Electronic

Cigarettes

424950 Paint, Varnish, & Supplies

424990 Other Miscellaneous Nondurable

Goods

Wholesale Trade Agents and Brokers

425120 Wholesale Trade Agents &

Brokers

Retail Trade

Motor Vehicle and Parts Dealers

441110 New Car Dealers

441120 Used Car Dealers

441210 Recreational Vehicle Dealers

441222 Boat Dealers

441227 Motorcycle, ATV, & All Other

Motor Vehicle Dealers

441300 Automotive Parts, Accessories, &

Tire Retailers

Furniture and Home Furnishings

Retailers

449110 Furniture Retailers

449121 Floor Covering Retailers

449122 Window Treatment Retailers

449129 All Other Home Furnishings

Retailers

Electronics and Appliance Retailers

449210 Electronics & Appliance Retailers

(including Computers)

Building Material and Garden

Equipment and Supplies Dealers

444110 Home Centers

444120 Paint & Wallpaper Retailers

444140 Hardware Retailers

Page 30 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Principal Business Activity Codes (Continued)

444180

Other Building Material Dealers

444200 Lawn & Garden Equipment &

Supplies Retailers

Food and Beverage Retailers

445110 Supermarkets & Other Grocery

Retailers (except Convenience)

445131 Convenience Retailers

445132 Vending Machine Operators

445230 Fruit & Vegetable Retailers

445240 Meat Retailers

445250 Fish & Seafood Retailers

445291 Baked Goods Retailers

445292 Confectionery & Nut Retailers

445298 All Other Specialty Food

Retailers

445320 Beer, Wine, & Liquor Retailers

Health and Personal Care Retailers

456110 Pharmacies & Drug Retailers

456120 Cosmetics, Beauty Supplies, &

Perfume Retailers

456130 Optical Goods Retailers

456190 Other Health & Personal Care

Retailers

Gasoline Stations & Fuel Dealers

457100 Gasoline Stations (including

convenience stores with gas)

457210 Fuel Dealers (including Heating

Oil & Liquefied Petroleum)

Clothing and Accessories Retailers

458110 Clothing & Clothing Accessories

Retailers

458210 Shoe Retailers

458310 Jewelry Retailers

458320 Luggage & Leather Goods

Retailers

Sporting Goods, Hobby, Book, Musical

Instrument and Miscellaneous Retailers

459110 Sporting Goods Retailers

459120 Hobby, Toy, & Game Retailers

459130 Sewing, Needlework, & Piece

Goods Retailers

459140 Musical Instrument & Supplies

Retailers

459210 Book Retailers & News Dealers

(including newsstands)

459310 Florists

459410 Office Supplies & Stationery

Retailers

459420 Gift, Novelty, & Souvenir

Retailers

459510 Used Merchandise Retailers

459910 Pet & Pet Supplies Retailers

459920 Art Dealers

459930 Manufactured (Mobile) Home

Dealers

459990 All Other Miscellaneous Retailers

(including tobacco, candle, &

trophy retailers)

General Merchandise Retailers

455110 Department Stores

455210 Warehouse Clubs, Supercenters,

& Other General Merch. Retailers

Nonstore Retailers

Nonstore retailers sell all types of

merchandise using such

methods as Internet, mail-order

catalogs, interactive television, or

direct sales. These types of

Retailers should select the PBA

associated with their primary line

of products sold. For example,

establishments primarily selling

prescription and non-prescription

drugs, select PBA code 456110

Pharmacies & Drug Retailers

Transportation and

Warehousing

Air, Rail, and Water Transportation

481000 Air Transportation

482110 Rail Transportation

483000 Water Transportation

Truck Transportation

484110 General Freight Trucking, Local

484120 General Freight Trucking,

Long-distance

484200 Specialized Freight Trucking

Transit and Ground Passenger

Transportation

485110 Urban Transit Systems

485210 Interurban & Rural Bus

Transportation

485310 Taxi & Ridesharing Services

485320 Limousine Service

485410 School & Employee Bus

Transportation

485510 Charter Bus Industry

485990 Other Transit & Ground

Passenger Transportation

Pipeline Transportation

486000 Pipeline Transportation

Scenic & Sightseeing Transportation

487000 Scenic & Sightseeing

Transportation

Support Activities for Transportation

488100 Support Activities for Air

Transportation

488210 Support Activities for Rail

Transportation

488300 Support Activities for Water

Transportation

488410 Motor Vehicle Towing

488490 Other Support Activities for Road

Transportation

488510 Freight Transportation

Arrangement

488990 Other Support Activities for

Transportation

Couriers and Messengers

492110 Couriers & Express Delivery

Services

492210 Local Messengers & Local

Delivery

Warehousing and Storage

493100 Warehousing & Storage (except

lessors of miniwarehouses &

self-storage units)

Information

Motion Picture and Sound Recording

Industries

512100 Motion Picture & Video Industries

(except video rental)

512200 Sound Recording Industries

Publishing Industries

513110 Newspaper Publishers

513120 Periodical Publishers

513130 Book Publishers

513140 Directory & Mailing List

Publishers

513190 Other Publishers

513210 Software Publishers

Broadcasting, Content Providers, and

Telecommunications

516100 Radio & Television Broadcasting

Stations

516210 Media Streaming, Social

Networks, & Other Content

Providers

517000 Telecommunications (including

Wired, Wireless, Satellite, Cable

& Other Program Distribution,

Resellers, Agents, Other

Telecommunications, & Internet

Service Providers)

Data Processing, Web Search Portals, &

Other Information Services

518210 Computing Infrastructure

Providers, Data Processing, Web

Hosting, & Related Services

519200 Web Search Portals, Libraries,

Archives, & Other Info. Services

Finance and Insurance

Depository Credit Intermediation

522110 Commercial Banking

522130 Credit Unions

522180 Savings Institutions & Other

Depository Credit Intermediation

Nondepository Credit Intermediation

522210 Credit Card Issuing

522220 Sales Financing

522291 Consumer Lending

522292 Real Estate Credit (including

mortgage bankers & originators)

522299 Intl, Secondary Market, & Other

Nondepos. Credit Intermediation

Activities Related to Credit

Intermediation

522300 Activities Related to Credit

Intermediation (including loan

brokers, check clearing, & money

transmitting)

Securities, Commodity Contracts, and

Other Financial Investments and

Related Activities

523150 Investment Banking & Securities

Intermediation

523160 Commodity Contracts

Intermediation

523210 Securities & Commodity

Exchanges

523900 Other Financial Investment

Activities (including portfolio

management & investment

advice)

Insurance Carriers and Related

Activities

524110 Direct Life, Health, & Medical

Insurance Carriers

524120 Direct Insurance (except Life,

Health, & Medical) Carriers

524210 Insurance Agencies &

Brokerages

524290 Other Insurance Related

Activities (including third-party

administration of insurance &

pension funds)

Funds, Trusts, and Other Financial

Vehicles

525100 Insurance & Employee Benefit

Funds

525910 Open-End Investment Funds

(Form 1120-RIC)

525920 Trusts, Estates, & Agency

Accounts

525990 Other Financial Vehicles

(including mortgage REITs &

closed-end investment funds)

Real Estate and Rental and

Leasing

Real Estate

531110 Lessors of Residential Buildings

& Dwellings (including equity

REITs)

531120 Lessors of Nonresidential

Buildings (except

Miniwarehouses) (including

equity REITs)

531130 Lessors of Miniwarehouses &

Self-Storage Units (including

equity REITs)

531190 Lessors of Other Real Estate

Property (including equity REITs)

531210 Offices of Real Estate Agents &

Brokers

531310 Real Estate Property Managers

531320 Offices of Real Estate Appraisers

531390 Other Activities Related to Real

Estate

Rental and Leasing Services

532100 Automotive Equipment Rental &

Leasing

532210 Consumer Electronics &

Appliances Rental

532281 Formal Wear & Costume Rental

532282 Video Tape & Disc Rental

532283 Home Health Equipment Rental

532284 Recreational Goods Rental

532289 All Other Consumer Goods

Rental

532310 General Rental Centers

532400 Commercial & Industrial

Machinery & Equipment Rental &

Leasing

Lessors of Nonfinancial Intangible

Assets (except copyrighted works)

533110 Lessors of Nonfinancial

Intangible Assets (except

copyrighted works)

Professional, Scientific, and

Technical Services

Legal Services

541110 Offices of Lawyers

541190 Other Legal Services

Accounting, Tax Preparation,

Bookkeeping, and Payroll Services

541211 Offices of Certified Public

Accountants

541213 Tax Preparation Services

541214 Payroll Services

541219 Other Accounting Services

Architectural, Engineering, and Related

Services

541310 Architectural Services

541320 Landscape Architecture Services

541330 Engineering Services

541340 Drafting Services

541350 Building Inspection Services

541360 Geophysical Surveying &

Mapping Services

541370 Surveying & Mapping (except

Geophysical) Services

541380 Testing Laboratories & Services

Specialized Design Services

541400 Specialized Design Services

(including interior, industrial,

graphic, & fashion design)

Computer Systems Design and Related

Services

541511 Custom Computer Programming

Services

541512 Computer Systems Design

Services

541513 Computer Facilities Management

Services

541519 Other Computer Related

Services

Other Professional, Scientific, and

Technical Services

541600 Management, Scientific, &

Technical Consulting Services

541700 Scientific Research &

Development Services

541800 Advertising, Public Relations, &

Related Services

541910 Marketing Research & Public

Opinion Polling

541920 Photographic Services

541930 Translation & Interpretation

Services

541940 Veterinary Services

541990 All Other Professional, Scientific,

& Technical Services

Management of Companies

(Holding Companies)

551111 Offices of Bank Holding

Companies

551112 Offices of Other Holding

Companies

Administrative and Support and

Waste Management and

Remediation Services

Administrative and Support Services

561110 Office Administrative Services

561210 Facilities Support Services

561300 Employment Services

561410 Document Preparation Services

561420 Telephone Call Centers

561430 Business Service Centers

(including private mail centers &

copy shops)

561440 Collection Agencies

561450 Credit Bureaus

561490 Other Business Support

Services (including repossession

services, court reporting, &

stenotype services)

561500 Travel Arrangement &

Reservation Services

561600 Investigation & Security Services

561710 Exterminating & Pest Control

Services

561720 Janitorial Services

561730 Landscaping Services

561740 Carpet & Upholstery Cleaning

Services

561790 Other Services to Buildings &

Dwellings

561900 Other Support Services

(including packaging & labeling

services, & convention & trade

show organizers)

Waste Management and Remediation

Services

562000 Waste Management &

Remediation Services

Educational Services

611000 Educational Services (including

schools, colleges, & universities)

Health Care and Social

Assistance

Offices of Physicians and Dentists

621111 Offices of Physicians (except

mental health specialists)

621112 Offices of Physicians, Mental

Health Specialists

621210 Offices of Dentists

Offices of Other Health Practitioners

621310 Offices of Chiropractors

621320 Offices of Optometrists

621330 Offices of Mental Health

Practitioners (except Physicians)

Page 31 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Principal Business Activity Codes (Continued)

621340

Offices of Physical, Occupational

& Speech Therapists, &

Audiologists

621391 Offices of Podiatrists

621399 Offices of All Other

Miscellaneous Health

Practitioners

Outpatient Care Centers

621410 Family Planning Centers

621420 Outpatient Mental Health &

Substance Abuse Centers

621491 HMO Medical Centers

621492 Kidney Dialysis Centers

621493 Freestanding Ambulatory

Surgical & Emergency Centers

621498 All Other Outpatient Care

Centers

Medical and Diagnostic Laboratories

621510 Medical & Diagnostic

Laboratories

Home Health Care Services

621610 Home Health Care Services

Other Ambulatory Health Care Services

621900 Other Ambulatory Health Care

Services (including ambulance

services & blood & organ banks)

Hospitals

622000 Hospitals

Nursing and Residential Care Facilities

623000 Nursing & Residential Care

Facilities

Social Assistance

624100 Individual & Family Services

624200 Community Food & Housing, &

Emergency & Other Relief

Services

624310 Vocational Rehabilitation

Services

624410 Childcare Services

Arts, Entertainment, and

Recreation

Performing Arts, Spectator Sports, and

Related Industries

711100 Performing Arts Companies

711210 Spectator Sports (including

sports clubs & racetracks)

711300 Promoters of Performing Arts,

Sports, & Similar Events

711410 Agents & Managers for Artists,

Athletes, Entertainers, & Other

Public Figures

711510 Independent Artists, Writers, &

Performers

Museums, Historical Sites, and Similar

Institutions

712100 Museums, Historical Sites, &

Similar Institutions

Amusement, Gambling, and Recreation

Industries

713100 Amusement Parks & Arcades

713200 Gambling Industries

713900 Other Amusement & Recreation

Industries (including golf

courses, skiing facilities,

marinas, fitness centers, &

bowling centers)

Accommodation and Food

Services

Accommodation

721110 Hotels (except Casino Hotels) &

Motels

721120 Casino Hotels

721191 Bed & Breakfast Inns

721199 All Other Traveler

Accommodation

721210 RV (Recreational Vehicle) Parks

& Recreational Camps

721310 Rooming & Boarding Houses,

Dormitories, & Workers’ Camps

Food Services and Drinking Places

722300 Special Food Services (including

food service contractors &

caterers)

722410 Drinking Places (Alcoholic

Beverages)

722511 Full-Service Restaurants

722513 Limited-Service Restaurants

722514 Cafeterias, Grill Buffets, & Buffets

722515 Snack & Non-alcoholic Beverage

Bars

Other Services

Repair and Maintenance

811110 Automotive Mechanical &

Electrical Repair & Maintenance

811120 Automotive Body, Paint, Interior,

& Glass Repair

811190 Other Automotive Repair &

Maintenance (including oil

change & lubrication shops & car

washes)

811210 Electronic & Precision Equipment

Repair & Maintenance

811310 Commercial & Industrial

Machinery & Equipment (except

Automotive & Electronic) Repair

& Maintenance

811410 Home & Garden Equipment &

Appliance Repair & Maintenance

811420 Reupholstery & Furniture Repair

811430 Footwear & Leather Goods

Repair

811490 Other Personal & Household

Goods Repair & Maintenance

Personal and Laundry Services

812111 Barber Shops

812112 Beauty Salons

812113 Nail Salons

812190 Other Personal Care Services

(including diet & weight reducing

centers)

812210 Funeral Homes & Funeral

Services

812220 Cemeteries & Crematories

812310 Coin-Operated Laundries &

Drycleaners

812320 Drycleaning & Laundry Services

(except Coin-Operated)

812330 Linen & Uniform Supply

812910 Pet Care (except Veterinary)

Services

812920 Photofinishing

812930 Parking Lots & Garages

812990 All Other Personal Services

Religious, Grantmaking, Civic,

Professional, and Similar Organizations

813000 Religious, Grantmaking, Civic,

Professional, & Similar

Organizations (including

condominium & homeowners

associations)

Other

999000 Unclassified Establishments

(unable to classify)

Page 32 of 32 Fileid: … ions/i1120/2023/a/xml/cycle06/source 9:36 - 18-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Index

Accounting methods 6

Accounting period (Tax Year) 7

Address change 9

Advance payments 10

Affiliated group 23

Amended return 7

Amortization 11

Assembling the return 5

At-risk rules 16

Backup withholding 22

Bad debts 13

Balance sheets 26

Base erosion minimum tax 21, 25

Beneficiaries of trusts 22

Business start-up expenses 11

Capital construction fund (See Merchant

Marine capital construction fund)

Closely held corporations 12

Compensation of officers 12

Consolidated return 8, 24

Contributions to reduce public debt 2

Contributions, charitable 14

Corporate alternative minimum tax 21, 26

Cost of goods sold 10

Credits against tax 21

Deductions 11

Depletion 15

Depository methods of tax payment 5

Depreciation 14

Direct deposit of refund 2, 17

Disclosure statement 7

Dividend income 10

Dividends-received deduction 18-20

Dues, membership and other 16

Electronic deposit requirement 5

Electronic filing 3

Employee benefit programs 15

Employer identification number (EIN) 9

Entities electing to be taxed as

corporations 2

Estimated tax:

Penalty 5, 17

Estimated tax payments 5

Extension of time to file 4

Farming, corporations engaged in 2

Final return 9

Financial asset securitization investment

trust (FASIT) 2

Foreign person (defined) 23

Foreign tax credit 21

Forms and publications, how to get 2

Future Developments 1

General business credit 21

General Instructions 2

Gross receipts 10

Installment sales 10

Interest due

Late payment of tax 6

Look-back method 21

Interest expense 13

Interest income:

Tax-exempt 24, 27

Taxable 10

LIFO recapture:

Tax on 22

Limitations on deductions 11, 14

Limited liability companies 2

Lobbying expenses, nondeductibility 16

Merchant Marine capital construction

fund:

Deduction for contributions 17

Tax on nonqualified withdrawal 21

Minimum tax:

Prior year, credit for 21

Mutual savings banks conducting life

insurance business 20

Name change 9

Net operating loss 16, 24

Nonaccrual experience method 10

Other deductions 15

Other income 10

Other taxes 21

Overpaid estimated tax 22

Partnership income (loss) 15

Passive activity limitations 12

Penalties 6, 17

Pension, profit-sharing, etc. plans 15

Personal holding company 9

Personal holding company tax 21

Personal service corporation 9

Preparer, tax return 4

Private delivery services 4

Recapture taxes 21

Reconciliation of income 27

Recordkeeping 7

Refundable credits 22

Related party transactions 11

Rents (expense) 13

Rents (income) 10

Repairs and maintenance 12

Salaries and wages 12

Schedule:

C 18

J 20

K 22

L 26

M-1 27

M-3 9, 27

Section 263A costs 11

Shareholders' equity adjustments 27

Signature 4

Small business taxpayer 6, 25

Specific Instructions 8

Tax issues, unresolved 2

Tax-exempt securities 27

Taxes and licenses 13

Total assets 9

Travel, meals, and entertainment 16

Uniform capitalization rules 11

What’s New 1

When to file 3

Where to file 4

Who must file 2

Who must sign 4

Worksheets:

Schedule C 20