دستورالعمل های 1120-C
دستورالعمل های فرم 1120-C، بازگشت مالیات بر درآمد ایالات متحده برای انجمن های تعاونی
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- فرم 1120-C - بازگشت مالیات بر درآمد ایالات متحده برای انجمن های تعاونی
Department of the Treasury
Internal Revenue Service
2023
Instructions for Form 1120-C
U.S. Income Tax Return for Cooperative Associations
Section references are to the Internal Revenue Code
Future Developments
unless otherwise noted.
For the latest information about developments related to
Form 1120-C and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Contents
Page
What’s New
How To Make a Contribution To Reduce Debt Held
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.
Expiration of 100% business meal expense deduc-
tion. 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, cooperatives must determine
whether they are subject to the new CAMT and calculate
CAMT if applicable. See the instructions for Schedule J,
Elective payment election. Applicable entities and
electing taxpayers can elect to treat certain credits as
elective payments. Resulting overpayment may result in
Instructions for Form 3800.
Relief from additions to tax for underpayments appli-
cable 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 cooperatives must still file the
2023 Form 2220 even if they owe no estimated tax
penalty. However, affected cooperatives may exclude the
CAMT tax liability when calculating the required annual
payment on Form 2220. Affected cooperatives must also
include an amount of estimated tax penalty on line 31 of
Form 1120-C even if that amount is zero. Failure to follow
these instructions could result in the cooperative 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/
Other Forms and Statements That May Be
Item D. Initial Return, Final Return, Name Change,
Schedule C. Dividends, Inclusions, and Special
Schedule G. Allocation of Patronage and
Schedule H. Deductions and Adjustments Under
Photographs of Missing Children
The Internal Revenue Service is a proud partner with the
(NCMEC). Photographs of missing children selected by
the Center may appear in instructions on pages that would
otherwise be blank. You can help bring these children
home by looking at the photographs and calling
Schedule M-1. Reconciliation of Income (Loss) per
Jan 19, 2024
Cat. No. 17211X
1-800-THE-LOST (1-800-843-5678) if you recognize a
child.
Search publications online by topic or keyword;
•
•
Use the online Internal Revenue Code, regulations, or
other official guidance;
The Taxpayer Advocate Service
View Internal Revenue Bulletins (IRBs) published in the
•
The Taxpayer Advocate Service (TAS) is an independent
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
last few years; and
Sign up to receive local and national tax news by email.
•
Tax forms and publications. The cooperative can view,
print, or download all of the forms and publications it may
forms mailed to it.
As a taxpayer, the cooperative has rights that the IRS
must abide by in its dealings with the cooperative. TAS
can help the cooperative if:
Problems are causing financial difficulty for the
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General Instructions
business;
The business is facing an immediate threat of adverse
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Purpose of Form
action; or
Use Form 1120-C, U.S. Income Tax Return for
Cooperative Associations, to report income, gains, losses,
deductions, credits, and to figure the income tax liability of
the cooperative.
The cooperative 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. The cooperative's local advocate's
number is in its local directory and at
Who Must File
Any corporation operating on a cooperative basis under
section 1381 and allocating amounts to patrons on the
basis of business done with or for such patrons should file
Form 1120-C (including farmers' cooperatives under
section 521 whether or not it has taxable income).
TAS at 877-777-4778.
TAS also works to resolve large-scale or systemic
problems that affect many taxpayers. If the cooperative
knows of one of these broad issues, please report it to
TAS through the Systemic Advocacy Management
Exceptions. This does not apply to organizations which
are:
Exempt from income tax under chapter 1 (other than
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exempt farmers' cooperatives under section 521);
How To Make a Contribution To
Reduce Debt Held by the Public
Subject to Part II (section 591 and following),
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subchapter H, chapter 1 (relating to mutual savings
banks);
Subject to subchapter L (section 801 and following),
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chapter 1 (relating to insurance companies); or
To help reduce debt held by the public, make a check
payable to “Bureau of the Fiscal Service.” Send it to:
Engaged in generating, transmitting, or otherwise
•
furnishing electric energy or providing telephone service
to persons in rural areas.
Bureau of the Fiscal Service
Attn: Dept G
Where To File
P.O. Box 2188
If the cooperative's principal business, office, or agency is
located in the United States, file Form 1120-C at the
following IRS center address:
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
Make a Contribution To Reduce the Debt.”
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0012
If the cooperative's principal business, office, or agency
is located in a foreign country or a U.S. territory, file Form
1120-C at the following IRS center address:
Do not add the contributions to any tax the cooperative
how to pay any tax the cooperative owes. Contributions to
reduce debt held by the public are deductible subject to
the rules and limitations for charitable contributions.
Internal Revenue Service
P.O. Box 409101
Ogden, UT 84409
How To Get Forms
and Publications
When To File
Generally, a cooperative described in section 6072(d)
must file its income tax return by the 15th day of the 9th
month after the end of its tax year.
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;
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•
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Research your tax questions online;
2
Instructions for Form 1120-C
Any cooperative not described in section 6072(d) must
generally file its tax return by the 15th day of the 4th month
after the end of its tax year. However, a cooperative 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 cooperative
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.
A paid preparer may sign original or amended
returns by rubber stamp, mechanical device, or
computer software program.
TIP
Paid Preparer Authorization
If the cooperative 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 cooperative's return. It does not apply to the firm, if
any, shown in that section.
If the due date falls on a Saturday, Sunday, or legal
holiday, the cooperative can file on the next business day.
Private Delivery Services
Cooperatives can use certain private delivery services
(PDS) designated by the IRS to meet the “timely mailing
the current list of designated services.
If the “Yes” box is checked, the cooperative is
authorizing the IRS to call the paid preparer to answer any
questions that may arise during the processing of its
return. The cooperative is also authorizing the paid
preparer to:
The PDS can tell you how to get written proof of the
mailing date.
Give the IRS any information that is missing from the
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return;
Call the IRS for information about the processing of the
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For the IRS mailing address to use if you’re using PDS,
return or the status of any related refund or payment(s);
and
Private Delivery Services can't deliver items to
Respond to certain IRS notices about math errors,
•
P.O. boxes. You must use the U.S. Postal Service
offsets, and return preparation.
!
CAUTION
to mail any item to an IRS P.O. box address.
The cooperative is not authorizing the paid preparer to
receive any refund check, bind the cooperative to anything
(including any additional tax liability), or otherwise
represent the cooperative before the IRS.
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 cooperative must file Form 7004 by the
regular due date of the return. See the Instructions for
Form 7004.
The authorization will automatically end no later than
the due date (excluding extensions) for filing the
cooperative's 2024 tax return. If the cooperative 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.
Who Must Sign
The return must be signed and dated by:
Assembling the Return
The president, vice president, treasurer, assistant
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To ensure that the cooperative's tax return is correctly
processed, attach all schedules and other forms after
Form 1120-C, page 5, in the following order.
treasurer, chief accounting officer; or
Any other cooperative officer (such as tax officer)
•
authorized to sign.
1. Schedule N (Form 1120).
2. Form 4626.
3. Form 4136.
4. Form 8978.
5. Form 8941.
If a return is filed on behalf of a cooperative by a
receiver, trustee, or assignee, the fiduciary must sign the
return, instead of the cooperative officer. Returns and
forms signed by a receiver or trustee in bankruptcy on
behalf of a cooperative 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
cooperative completes Form 1120-C, the paid preparer
section should remain blank. Anyone who prepares Form
1120-C but does not charge the cooperative should not
complete that section. Generally, anyone who is paid to
prepare the return must sign and complete the section.
6. Form 3800.
7. Form 8936, Schedule A.
8. Additional schedules in alphabetical order.
9. Additional forms in numerical order.
10. Supporting statements and attachments.
Complete every applicable entry space on Form
1120-C. 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.
The paid preparer must complete the required preparer
information and:
Sign the return in the space provided for the preparer's
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signature,
Include their Preparer Tax Identification Number (PTIN),
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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
and
Give a copy of the return to the taxpayer.
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Instructions for Form 1120-C
3
printed forms. Enter the cooperative's name and EIN on
each supporting statement or attachment.
The cooperative must use electronic funds transfer to
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make installment payments of estimated tax.
If, after the cooperative figures and deposits estimated
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Tax Payments
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 cooperative may owe a penalty. See
Generally, the cooperative must pay any tax due in full no
later than the due date for filing its return (not including
extensions). 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. See the instructions
If the cooperative overpaid estimated tax, it may be able
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to get a quick refund by filing Form 4466, Corporation
Application for Quick Refund of Overpayment of
Electronic Deposit Requirement
Cooperatives 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 cooperative
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 wire 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.
See section 6655 and Pub. 542, Corporations, for more
information on how to figure estimated taxes.
Estimated tax penalty. A cooperative that does not
make estimated tax payments when due may be subject
to an underpayment penalty for the period of
underpayment. Generally, a cooperative 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.
Use Form 2220, Underpayment of Estimated Tax by
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Corporations, to see if the cooperative owes a penalty and
to figure the amount of the penalty. If Form 2220 is
completed, enter the penalty on line 31. See the
alternative minimum tax, earlier.
To get more information about EFTPS or to enroll in
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 deposits made by EFTPS to be
on time, the cooperative must submit the deposit by 8 p.m.
Eastern time the day before the date the deposit is due. If
the cooperative uses a third party to make deposits on its
behalf, they may have different cutoff times.
Interest and Penalties
If the cooperative receives a notice about
penalties after it files its return, send the IRS an
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CAUTION
explanation and we will determine if the
cooperative meets reasonable cause criteria. Do not
attach an explanation when the cooperative's return is
filed.
Same-day wire payment option. If the cooperative fails
to submit a deposit transaction on EFTPS by 8 p.m.
Eastern time the day before the date a deposit is due, it
can still make the deposit on time by using the Federal Tax
Collection Service (FTCS). To use the same-day wire
payment method, the cooperative will need to make
arrangements with its financial institution ahead of time
regarding availability, deadlines, and costs. The
cooperative's financial institution may charge a fee for
payments made this way. To learn more about the
information the cooperative will need to provide to its
financial institution to make a same-day wire payment, go
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 cooperative 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 over 60 days late is the smaller of
the tax due or $485. The penalty will not be imposed if the
cooperative can show that the failure to file on time was
Late payment of tax. Generally, a cooperative that does
not pay the tax when due may be penalized 1/2 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.
Estimated Tax Payments
Generally, the following rules apply to the cooperative's
payments of estimated tax.
The cooperative must make installment payments of
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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,
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9th, and 12th months of the tax year. If any due date falls
on a Saturday, Sunday, or legal holiday, the payment of the
installment is due on the next regular business day.
4
Instructions for Form 1120-C
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:
Change in accounting method. Generally, the
cooperative 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 cooperative 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
Form 720, Quarterly Federal Excise Tax Return;
Form 941, Employer's QUARTERLY Federal Tax
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Return;
Form 943, Employer's Annual Federal Tax Return for
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Agricultural Employees;
Form 944, Employer's ANNUAL Federal Tax Return; or
Form 945, Annual Return of Withheld Federal Income
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•
accounting, non-automatic change procedures, and
reduced Form 3115 filing requirements.
Tax.
Section 481(a) adjustment. If the cooperative'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 cooperative may have to make
an adjustment under section 481(a) to prevent amounts of
income or expense from being duplicated or omitted. See
section 481(d). Also, see the Instructions for Form 3115.
If the net section 481(a) adjustment is positive, report
the ratable portion on Form 1120-C, line 9, as other
income. If the net section 481(a) adjustment is negative,
report it on Form 1120-C, line 23, as a deduction.
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 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 and 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 Period
A cooperative must figure its taxable income on the basis
of a tax year. A tax year is the annual accounting period a
cooperative uses to keep its records and report its income
and expenses. Generally, cooperatives can use a
calendar year or a fiscal year.
Change of tax year. Generally, a cooperative 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, under certain conditions, exceptions
may apply. See the Instructions for Form 1128 and Pub.
538 for more information.
Accounting Methods
Figure taxable income using the method of accounting
regularly used in keeping the cooperative's books and
records. In all cases, the method used must clearly show
taxable income. Permissible methods include:
Cash,
Rounding Off to
Whole Dollars
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Accrual, or
Any other method authorized by the Internal Revenue
The cooperative may enter decimal points and cents
when completing its return. However, the cooperative
should round off cents to whole dollars on its return,
forms, and schedules to make completing its return easier.
The cooperative 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.
Code.
Certain cooperatives must use an accrual method of
accounting. An exception applies for a small business
taxpayer (defined below).
See Pub. 538, Accounting Periods and Methods, for
more information.
Small business taxpayer. For tax years beginning in
2023, a cooperative 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)).
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.
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.
Recordkeeping
Keep the cooperative'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
cooperative's basis in property for as long as they are
Instructions for Form 1120-C
5
needed to figure the basis of the original or replacement
property.
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.
Dual consolidated losses. If a cooperative incurs a dual
consolidated loss (as defined in Regulations section
1.1503(d)-1(b)(5)), the cooperative (or consolidated
group) may need to attach a domestic use agreement
and/or annual certification, as provided in Regulations
sections 1.1503(d)-6(d) and (g).
Election to reduce basis under section 362(e)(2)(C).
If property is transferred to a cooperative in transfers
subject to section 362(e)(2), the transferor and the
transferee cooperative may elect, under section 362(e)(2)
(C), to reduce the transferor's basis in the stock received
instead of reducing the transferee 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).
The cooperative 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
Reportable transaction disclosure statement.
Disclose information for each reportable transaction in
which the cooperative participated. Form 8886,
Reportable Transaction Disclosure Statement, must be
filed for each tax year that the federal income tax liability
of the cooperative 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.
2. Any transaction offered under conditions of
confidentiality for which the cooperative (or a related
party) paid an advisor a fee of at least $250,000.
Other forms and statements. See Pub. 542,
Corporations, for a list of other forms and statements that
a cooperative may need to file in addition to the forms and
statements discussed throughout these instructions.
3. Certain transactions for which the cooperative (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.”
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.
For more information, see Regulations section
1.6011-4. Also, see the Instructions for Form 8886.
Penalties. The cooperative 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
cooperative fails to file Form 8886 with its cooperative
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 cooperative controlled by the transfer-
or. Every significant transferor (as defined in Regulations
section 1.351-3(d)(1)) that receives stock of a cooperative
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 cooperative must
include the statement required by Regulations section
The 2023 Form 1120-C can also be used if:
The cooperative has a tax year of less than 12 months
•
that begins and ends in 2024, and
The 2024 Form 1120-C is not available at the time the
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cooperative is required to file its return.
The cooperative must show its 2024 tax year on the
2023 Form 1120-C and take into account any tax law
changes that are effective for tax years beginning after
December 31, 2023.
Name and Address
Enter the cooperative'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
cooperative'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 cooperative 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 cooperative is incorporated. For
example, if the cooperative is incorporated in Delaware or
Nevada and the cooperative's principal office is located in
Little Rock, Arkansas, the cooperative should enter the
Little Rock address.
6
Instructions for Form 1120-C
If the cooperative 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.
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-C, Schedule M-1, instead of completing Parts
II and III of Schedule M-3 (Form 1120). If the cooperative
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 for more details. Also, see the instructions
If the cooperative 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
If you are filing Schedule M-3, check Item A, box 2, to
Consolidated return. Cooperatives filing a consolidated
return must check box 1, and attach Form 851, Affiliations
Schedule, and other supporting statements to the return.
Also, for the first year a subsidiary cooperative 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
indicate that Schedule M-3 is attached.
Form 1120 filed previous year. Check box 3 if the
cooperative filed Form 1120 in a prior year as a
subchapter T cooperative.
Item B. Employer Identification
Number (EIN)
consolidated return.
Enter the cooperative's EIN. If the cooperative does not
have an EIN, it must apply for one. An EIN can be applied
for:
If the cooperative is a farmers' tax exempt
cooperative and checked Item C, box 1, it cannot
!
CAUTION
file a consolidated return.
•
File supporting statements for each cooperative/
corporation included in the consolidated return. Do not
use Form 1120-C as a supporting statement. On the
supporting statement, use columns to show the following,
both before and after adjustments.
immediately once the application information is validated.
By faxing or mailing Form SS-4, Application for
•
Employer Identification Number.
Cooperatives located in the United States or U.S.
territories can use the online application. Foreign
!
1. Items of gross income and deductions.
2. A computation of taxable income.
CAUTION
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.
3. Balance sheets as of the beginning and end of the
tax year.
EIN applied for, but not received. If the cooperative
has not received its EIN by the time the return is due, enter
“Applied for” and the date you applied in the space for the
EIN.
4. A reconciliation of income per books with income
per return.
5. A reconciliation of retained earnings.
For more information, see the Instructions for Form
Enter on Form 1120-C the totals for each item of
income, gain, loss, expense, or deduction, net of
eliminating entries for intercompany transactions between
cooperatives/corporations within the consolidated group.
Attach consolidated balance sheets and a reconciliation of
consolidated retained earnings.
SS-4.
Item C. Type of Cooperative
Farmers' tax exempt cooperative. Check the “Farmers'
tax exempt cooperative” box if the cooperative applied for
and received status as a tax exempt farmers', fruit
growers', or like association, organized and operated on a
cooperative basis, as described in section 521.
The cooperative does not have to provide the
information requested in (3), (4), and (5) above if
its total receipts (page 1, lines 1a plus lines 4
TIP
If the cooperative has submitted Form 1028,
Application for Recognition of Exemption, but has not
received a determination letter from the IRS, enter
“Application Pending” on Form 1120-C at the top of
page 1.
Nonexempt cooperative. All other subchapter T
cooperatives including farmers' cooperatives without
section 521 exempt status, organized and operated as
“Nonexempt cooperative” box.
through 9) and its total assets at the end of the tax year
(Schedule L, line 13(d)) are less than $250,000. See
Schedule K, Question 14.
For more information on consolidated returns, see the
regulations under section 1502.
Schedule M-3 (Form 1120). A cooperative with total
assets (non-consolidated or consolidated for all
cooperatives/corporations included with 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 Form
1120-C, Schedule M-1.
Cooperatives that (a) are required to file Schedule M-3
(Form 1120) and have less than $50 million total assets at
the end of the tax year, or (b) are not required to file
Schedule M-3 (Form 1120) and voluntarily file
Instructions for Form 1120-C
7
For rules that allow a limited deferral of advance
•
Item D. Initial Return, Final Return,
Name Change, Address Change, or
Amended Return
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).
If this is the cooperative's first return, check the “Initial
•
For information on adopting or changing to a
•
return” box.
permissible method for reporting certain advance
payments for services and certain goods by an accrual
method cooperative, see the Instructions for Form 3115.
If this is the cooperative's final return and it will no
•
longer exist, file Form 1120-C and check the “Final return”
box.
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.
If the cooperative changed its name since it last filed a
•
return, check the “Name change” box. Generally, a
cooperative must also have amended its articles of
incorporation and filed the amendment with the state in
which it was incorporated.
If the cooperative has changed its address since it last
•
filed a return (including a change to an “in care of”
address), check the “Address change” box.
If the cooperative must change its originally filed return
•
The restrictions on using the installment method do not
for any year, it should file a new return including any
required attachments. Use the revision of the form
applicable to the year being amended. The amended
return must provide all the information called for by the
form and instructions, not just the new or corrected
information. Check the “Amended return” box.
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
cooperative elects to pay interest under section 453(l)(3).
Enter on line 1a (and carry to line 3) the gross profit on
collections from 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 cooperative elects to
pay interest under section 453(l)(3), the cooperative's
income tax is increased by the interest payable under
section 453(l)(3). Report this addition to tax on
Schedule J, line 8z.
Note. If a change in address or responsible party occurs
after the return is filed, use Form 8822-B, Change of
Address or Responsible Party—Business, to notify the
IRS of the new address. For more information, see the
instructions for Form 8822-B.
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 activi-
ties. Gross income does not include income from
qualifying shipping activities if the cooperative makes an
election under section 1354 to be taxed on its notional
shipping income (as defined in section 1353) at the
highest corporate rate. If the election is made, the
cooperative may generally not claim any loss, deduction,
or credit with respect to qualifying shipping activities. A
cooperative making this election may also elect to defer
gain on the disposition of a qualifying vessel.
Nonaccrual experience method for service providers.
Cooperatives 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 cooperative meets the section 448(c) gross
•
receipts test for all prior years.
Use Form 8902, Alternative Tax on Qualifying Shipping
Activities, to figure the tax. Include the alternative tax on
Schedule J, line 8c.
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 cooperatives 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.
Line 1. Gross Receipts or Sales
Enter gross receipts or sales from all business operations
except those that must be reported on lines 4
through 9. 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 cooperatives that use
the accrual method of accounting, see the following.
To report income from long-term contracts, see section
•
460.
8
Instructions for Form 1120-C
Cooperatives that qualify to use the nonaccrual
experience method should attach a statement to its return
showing total gross receipts, the amount not accrued as a
result of the application of section 448(d)(5), and the net
amount accrued. Enter the net amount on line 1a.
Other property (except nonqualified written notices of
•
allocation), based on earnings of that cooperative either
from business done with or for the United States or any of
its agencies (or from sources other than patronage, such
as investment income).
3. Qualified written notices of allocation at their stated
Line 2. Cost of Goods Sold
dollar amounts and property at its fair market value (FMV).
Complete and attach Form 1125-A, Cost of Goods Sold, if
applicable. Enter on Form 1120-C, line 2, the amount from
Form 1125-A, line 8. See Form 1125-A and its
instructions.
4. Amounts received on the redemption, sale, or other
disposition of nonqualified written notices of allocation.
Generally, patronage dividends from purchases of
capital assets or depreciable property are not includible in
income but must be used to reduce the basis of the
assets. See section 1385(b) and the related regulations.
5. Amounts received (or the stated dollar value of
qualified per-unit retain certificates received) from the sale
or redemption of nonqualified per-unit retain certificates.
6. Per-unit retain allocations received (except
nonqualified per-unit retain certificates). See section
1385.
Line 4. Dividends and Inclusions
Schedule C and enter on line 4 the amount from
Schedule C, line 23.
Note. Do not report patronage dividends received on
Schedule C. Report income from patronage dividends and
per-unit retain allocations on line 9.
Line 5. Interest
Note. Payments from the Commodity Credit Corporation
to a farmers' cooperative for certain expenses of the
co-op's farmers-producers under a “reseal” program of the
U.S. Department of Agriculture are patronage-source
income that may give rise to patronage dividends under
section 1382(b)(1).
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.
Other. Examples of other income to report on line 9
include the following.
Note. Report tax-exempt interest income on Schedule K,
Item 10. 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.
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.
Line 6. Gross Rents and Royalties
Enter the gross amount received from the rental of
property and royalties. Deduct expenses such as repairs,
interest, taxes, and depreciation on the applicable lines.
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 any tax refunds.
Line 9. Other Income
Enter any other taxable income not reported on lines 1
through 8. List the type and amount of income on an
attached statement. If the cooperative has only one item
of other income, describe it in parentheses on line 9.
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 23. 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.
Patronage dividends and per-unit retain allocations.
Include on line 9 the patronage dividends and per-unit
retain allocations listed below. Attach a statement listing
the name of each declaring association from which the
cooperative received income from patronage dividends
and per-unit retain allocations, and the total amount
received from each association.
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.
Include the items listed below.
1. Patronage dividends received in:
Money,
•
•
•
Qualified written notices of allocation, or
Other property (except nonqualified written notices of
The ratable portion of any net positive section 481(a)
•
Part or all of the proceeds received from certain
allocation).
•
2. Nonpatronage distributions received on a patronage
cooperative-owned life insurance contracts issued after
August 17, 2006. See section 101(j) for details. Form
8925, Report of Employer-Owned Life Insurance
Contracts, may also be required. See Form 8925 and its
instructions.
basis from tax-exempt farmers' cooperatives in:
Money;
•
•
Qualified written notices of allocation; or
Instructions for Form 1120-C
9
Income from cancellation of debt (COD) for the
through 1.263A-3. For more information on non-small
business taxpayers, see Regulations section 1.263A-4 .
For rules for property produced in a farming business, see
Pub. 225.
Transactions between related taxpayers. Generally,
an accrual basis taxpayer can only deduct business
expenses and interest owed to a related party in the year
payment is included in the income of the related party.
See sections 163(e)(3), 163(j), and 267(a)(2) for the
limitations on deductions for unpaid interest and
expenses.
•
repurchase of a debt instrument for less than its adjusted
issue price.
The cooperative'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
(QEF).
2. Gain or loss from marking passive foreign
investment company (PFIC) stock to market.
Limitations on business interest expense. Business
interest expense may be limited. See section 163(j) and
18, later.
Section 291 limitations. Cooperatives may be required
to adjust deductions for depletion of iron ore and coal,
intangible drilling, exploration and development costs, and
the amortizable basis of pollution control facilities. See
section 291 to determine the amount of the adjustment,
later.
Election to deduct business start-up and organiza-
tional costs. A cooperative 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 cooperative
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.
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 amount of 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 cooperative 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
If the cooperative 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 return at the same address the
cooperative filed its original return. The election applies
when figuring taxable income for the current tax year and
all subsequent years.
The cooperative 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.
Limitations on Deductions
Section 263A uniform capitalization rules. The
uniform capitalization rules of section 263A generally
require cooperatives to capitalize, or include in inventory,
certain costs.
Cooperatives 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 acquired for
resale.
The costs required to be capitalized under section
263A are not deductible until the property (to which the
costs relate) is sold, used, or otherwise disposed of by the
cooperative. The cooperative recovers these costs
through depreciation, amortization, or costs of goods sold.
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.
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), Regulation section
1.263A-1(j), and the Instructions for Form 3115.
Report the deductible amount of start-up and
organizational costs and any amortization on line 23. For
amortization that begins during the current tax year,
complete and attach Form 4562, Depreciation and
Amortization.
For more information on the uniform capitalization rules,
see Pub. 538. Also, see Regulations sections 1.263A-1
10
Instructions for Form 1120-C
Passive activity limitations. Limitations on passive
activity losses and credits under section 469 apply to
closely held cooperatives (defined later).
Limitations on deductions related to property leased
to tax-exempt entities. If a cooperative leases property
to a governmental or other tax-exempt entity, the
cooperative cannot claim deductions related to the
property to the extent that they exceed the cooperative'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.
Generally, the two kinds of passive activities are:
Trade or business activities in which the cooperative did
•
not materially participate for the tax year, and
Rental activities, regardless of its participation.
•
Cooperatives 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.
Line 11. Compensation of Officers
Enter deductible officers' compensation on line 11. 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.
For more information, see section 469, the related
regulations, and Pub. 925, Passive Activity and At-Risk
Rules.
Closely held cooperatives. A cooperative is “closely
held” (as defined in section 469(j)(1)) if at any time during
the last half of the tax year more than 50% in value of its
outstanding stock is owned, directly or indirectly, by or for
not more than five individuals.
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 al-
lowable. If the cooperative 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.
If the cooperative's total receipts (line 1a plus lines 4
through 9) are $500,000 or more, complete Form 1125-E,
Compensation of Officers. On Form 1120-C, enter on
line 11 the amount from Form 1125-E, line 4.
Line 12. 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 cooperative 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 18 and 23.
Work opportunity credit (Form 5884).
•
•
•
•
•
•
Credit for increasing research activities (Form 6765).
Orphan drug credit (Form 8820).
If the cooperative claims a credit for any wages
Disabled access credit (Form 8826).
paid or incurred, it may need to reduce any
!
CAUTION
Empowerment zone employment credit (Form 8844).
Credit for employer social security and Medicare taxes
corresponding deduction for officers'
compensation and salaries and wages. See Reducing
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
Line 13. Bad Debts
•
Enter the total debts that became worthless in whole or in
part during the tax year. A cooperative that uses the cash
method of accounting cannot claim a bad debt deduction
unless the amount was previously included in income.
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
•
Line 14. Rents
(Form 8941).
If the cooperative rented or leased a vehicle, enter the
total annual rent or lease expense paid or incurred during
the year. Also, complete Form 4562, Part V. If the
cooperative 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 cooperative may have an
inclusion amount if:
Employer credit for paid family and medical leave (Form
•
8994).
If the cooperative 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
cooperative 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.
Instructions for Form 1120-C
11
Interest on indebtedness incurred or continued to
•
And the vehicle's FMV
on the first day of the
lease exceeded:
purchase or carry obligations if the interest is wholly
exempt from income tax. For exceptions, see section
265(b).
The lease term began:
Cars (excluding Trucks and Vans)
For cash basis taxpayers, prepaid interest allocable to
•
After 12/31/22 but before 1/1/24
After 12/31/21 but before 1/1/23
After 12/31/20 but before 1/1/22
After 12/31/17 but before 1/1/21
After 12/31/12 but before 1/1/18
Trucks and Vans
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
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.
.
.
.
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.
.
$60,000
$56,000
$51,000
$50,000
$19,000
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
•
After 12/31/22 but before 1/1/24
After 12/31/21 but before 1/1/23
After 12/31/20 but before 1/1/22
After 12/31/17 but before 1/1/21
After 12/31/13 but before 1/1/18
After 12/31/09 but before 1/1/14
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$60,000
$56,000
$51,000
$50,000
$19,500
$19,000
designated property by a cooperative for its own use or for
sale. The cooperative 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.
See Pub. 463, Travel, Gift, and Car Expenses, for
instructions on figuring the inclusion amount. The
inclusion amount for lease terms beginning in 2024 will be
published in the Internal Revenue Bulletin in early 2024.
Special rules apply to:
Line 15. Taxes and Licenses
Forgone interest on certain below-market-rate loans
•
Enter taxes paid or accrued during the tax year, but do not
include the following.
(see section 7872).
Original issue discount (OID) on certain high yield
•
Federal income taxes.
•
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).
Foreign or U.S. territory income taxes if a foreign tax
•
credit is claimed.
Taxes not imposed on the cooperative.
•
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 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).
Interest 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.
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
•
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,
reflected in cost of goods sold.
See section 164(d) for the rule on apportionment of
taxes on real property between the seller and purchaser.
Do not reduce the cooperative’s deduction for
social security and Medicare taxes by the
!
CAUTION
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 9.
Line 16. Interest
Line 17. Charitable Contributions
Enter contributions or gifts actually paid within the tax year
to or for the use of charitable and governmental
Note. Do not offset interest income against interest
expense.
organizations described in section 170(c) and any unused
contributions carried over from prior years. Special rules
and limits apply to contributions to organizations
The cooperative 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.
conducting lobbying activities. See section 170(f)(9).
Cooperatives 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
Do not deduct the following interest.
12
Instructions for Form 1120-C
cooperative’s 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.
Limitation on deduction. Generally, the total amount
claimed cannot be more than 10% of taxable income
(line 27) computed without regard to the following.
date of the contribution, and the amount of the
contribution.
Contributions of $250 or more. A cooperative 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
cooperative'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 cooperative's records.
Contributions of property other than cash. If a
cooperative 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
fair market value (FMV). Complete and attach Form 8283,
Noncash Charitable Contributions, 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.
Any deduction for contributions.
•
•
•
The special deductions on line 26b.
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).
Any deduction for income attributable to domestic
•
production activities of specified agricultural or
horticultural cooperatives under section 199A(g).
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.
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.
Special rules apply if the cooperative 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 ranch-
ers and certain Native Corporations. Certain
cooperatives can deduct contributions of qualified
conservation property without regard to the general 10%
limit. This applies to:
Other special rules. The cooperative must reduce its
deduction for contributions of certain capital gain property.
See sections 170(e)(1) and 170(e)(5).
For more information on charitable contributions,
including substantiation and recordkeeping requirements,
see section 170 and the related regulations, and Pub. 526.
For special rules that apply to corporations, see Pub. 542.
Line 18. Depreciation
Include on line 18 depreciation and the cost of certain
property that the cooperative 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.
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)
•
Line 20. Pension, Profit-Sharing, etc., Plans
(C)(iii)) that contributes property which was land conveyed
under the Alaska Native Claims Settlement Act.
Enter the deduction for contributions to qualified pension,
profit-sharing, or other funded deferred compensation
plans. Generally, employers who maintain such a plan
must 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
cooperative does not claim a deduction for the current tax
year. There are penalties for failure to file these forms
timely and for overstating the pension plan deduction. See
sections 6652(e) and 6662(f). Also, see the instructions
for the applicable form.
The total amount of the contribution claimed for the
qualified conservation property cannot exceed 100% of
the excess of the cooperative'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
section 170(b)(2)(B) and (C).
Cash contributions. For contributions of cash, check, or
other monetary gifts (regardless of the amount), the
cooperative must maintain a bank record, or a receipt,
letter, or other written communication from the donee
organization indicating the name of the organization, the
Form 5500. Annual Return/Report of Employee Benefit
Plan.
Instructions for Form 1120-C
13
The deduction shall not exceed 50% of the Form W-2
wages allocable to domestic production gross receipts
(DPGR) of the specified cooperative for the tax year. See
Rev. Proc. 2021-11, 2021-6 I.R.B. 833, available at
Reporting the deduction. Specified cooperatives may
use Form 8903, Domestic Production Activities
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. If you are a small plan
(generally under 100 participants at the beginning of the
plan year), you may be eligible to file the Form 5500-SF
instead of the Form 5500. For more information, see the
instructions to the Form 5500-SF. Instructions and more
information can be found at the Department of Labor
Deduction, to compute the section 199A(g) deduction.
Write “Specified Cooperative Section 199A(g) deduction”
across the top of Form 8903. Form 8903 must be attached
to the cooperative's return. See the Instructions for Form
8903. Alternatively, specified cooperatives may create and
attach a schedule similar to Form 8903 to compute the
section 199A(g) deduction.
Note. Form 5500 and Form 5500-SF must be filed
electronically under the computerized ERISA Filing
Acceptance System (EFAST2). For more information, see
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 23. Other Deductions
Attach a statement, listing by type and amount, all
allowable deductions that are not deductible elsewhere on
Form 1120-C. Enter the total on line 23.
Examples of other deductions include the following.
Amortization. See Form 4562, Part VI.
•
•
Any energy efficient commercial buildings deduction for
property placed in service during the tax year. Complete
and attach Form 7205.
Line 21. 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 20.
Certain business start-up and organizational costs
•
(discussed earlier under Election to deduct business
start-up and organizational costs).
Reforestation costs. The cooperative can elect to
•
deduct up to $10,000 of qualifying reforestation expenses
for each qualified timber property. The cooperative can
elect to amortize over 84 months any amount not
deducted. See the Instructions for Form T (Timber).
Line 22. Section 199A(g) Deduction
This deduction applies only to specified
agricultural and horticultural cooperatives
Depletion. See sections 613 and 613A for percentage
•
!
CAUTION
(specified cooperatives).
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.
Specified agricultural or horticultural cooperatives
(specified cooperatives) to which Part I of subchapter T
applies may qualify for a deduction under section 199A(g).
A specified cooperative is a cooperative that markets or is
engaged in the manufacturing, production, growth or
extraction of agricultural or horticultural products.
Specified cooperatives that qualify under section 521 are
considered “exempt” cooperatives. All other specified
cooperatives are considered “nonexempt.” Special rules
apply to specified cooperatives with both patronage and
nonpatronage income and losses.
Insurance premiums.
•
•
•
•
•
Legal and professional fees.
Repairs and maintenance (discussed later).
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
A specified cooperative's section 199A(g) deduction
partnership (from Schedule K-1 (Form 1065)). Do not
offset ordinary income against ordinary losses. Instead,
include the income on line 9. 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.
generally equals 9% of the lesser of:
1. Qualified production activity income (QPAI), or
2. Taxable income.
Note. QPAI and taxable income are computed without
regard to any deductions for patronage dividends, per-unit
retain allocations, or nonpatronage distributions under
section 1382(b) or (c).
Any extraterritorial income exclusion (from Form 8873).
Any net negative section 481(a) adjustment. See the
•
•
A specified cooperative with oil-related QPAI must also
reduce the deduction by 3% of the least of the following
amounts.
Dividends paid in cash on stock held by an employee
•
stock ownership plan.
However, a deduction can only be taken for the
dividends above if, according to the plan, the dividends
are:
Oil-related QPAI.
•
•
•
QPAI.
Taxable income figured without the deduction.
14
Instructions for Form 1120-C
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
That individual is an employee of the cooperative, and
That individual’s travel is for a bona fide business
•
•
purpose and would otherwise be deductible by that
individual.
Meals. Generally, the cooperative can deduct only 50%
of the amount otherwise allowable for nonentertainment
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)):
4. Used to make payments on a loan described in
Meals must not be lavish or extravagant, and
•
•
section 404(a)(9).
An employee of the cooperative must be present at the
See section 404(k) for more details and the limitation
on certain dividends.
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.
Do not deduct 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.
See section 162(f) for more information and exceptions.
Qualified transportation fringes (QTFs). Generally,
no deduction is allowed for QTFs provided by employers
to their employees. QTFs are defined in section 132(f)(1)
and include:
Any amount that is allocable to a class of exempt
•
income. See section 265(b) for exceptions.
Lobbying expenses. However, see exceptions
Transportation in a commuter highway vehicle between
•
•
the employee's residence and place of employment,
(discussed later).
Any transit pass, and
Qualified parking.
•
•
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).
See section 274 and Pub. 15-B for more information.
Membership dues. The cooperative 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,
cooperatives 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.
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 tangible or real 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. Amounts
paid to produce or improve property must be capitalized.
See Regulations sections 1.263(a)-2 and (a)-3.
The cooperative 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
cooperative 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.
Travel, meals, and entertainment. Subject to limitations
and restrictions discussed below, a cooperative can
deduct ordinary and necessary travel, meals, and
nonentertainment 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. Generally, no
deduction is allowed for qualified transportation fringe
benefits. Also, special rules apply to deductions for gifts
and convention expenses. See section 274 and Pub. 463
for details.
Entertainment facilities. The cooperative 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
cooperative 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, Wage and Tax
Statement, for an employee or on Form 1099-NEC,
Nonemployee Compensation, 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.
Travel. The cooperative cannot deduct travel expenses
of any individual accompanying a cooperative officer or
employee, including a spouse or dependent of the officer
or employee, unless:
Lobbying expenses. Generally, lobbying expenses are
not deductible. These expenses include amounts paid or
incurred in connection with:
Influencing legislation, or
•
Instructions for Form 1120-C
15
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.”
Line 25c. Taxable Income Before Net Operating
Loss and Special Deductions
Subtract line 25b from line 25a and enter the result on
line 25c.
Dues and other similar amounts paid to certain
tax-exempt organizations may not be deductible. If certain
in-house expenditures do not exceed $2,000, they are
deductible. See section 162(e)(4)(B).
Line 26a. Net Operating Loss Deduction
A cooperative can use the NOL incurred in 1 tax year to
reduce its taxable income in another tax year. Enter on
line 26a the total NOL carryovers from other tax years, but
do not enter more than the cooperative's taxable income
(after special deductions). Attach a statement showing the
computation of the NOL deduction. Also, complete
Schedule K, Item 12, if applicable.
Line 25a. Taxable Income Before Adjustments
and Special Deductions
At-risk rules. Generally, special at-risk rules under
section 465 apply to closely held cooperatives (see
Passive activity limitations, earlier) engaged in any activity
as a trade or business or for the production of income.
These cooperatives may have to adjust the amount on
line 25a. (See below.)
A taxpayer is generally considered “at-risk” for an
amount equal to the taxpayer’s investment in the entity.
That investment consists of money and other property
contributed to the entity and amounts borrowed on behalf
of the entity.
The cooperative must attach a statement separately
accounting for patronage and nonpatronage-sourced
NOLs.
Note. Patronage-sourced NOLs cannot be used to
reduce nonpatronage-sourced taxable income.
The following special rules apply.
If an ownership change (described in section 382(g))
•
The at-risk rules do not apply to:
occurs, the amount of the taxable income of a loss
cooperative that may be offset by the pre-change NOL
carryovers may be limited. See section 382 and the
related regulations. A loss cooperative 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 cooperative 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 cooperative makes the closing-of-the-books election,
see Regulations section 1.382-6(b).
Holding real property placed in service by the
•
cooperative before 1987;
Equipment leasing under sections 465(c)(4), (5), and
•
(6); or
Any qualifying business of a qualified cooperative 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 cooperative is at risk for each
separate activity at the close of the tax year. If the
cooperative 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 cooperative 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 cooperative has a net loss, the loss may be limited
because of the at-risk rules.
Treat any loss from an activity not allowed for the
current tax year as a deduction allocable to the activity in
the next tax year.
Cooperatives are required to allocate income and
deductions between patronage and nonpatronage-related
business. Cooperatives with gross receipts and assets of
$250,000 or more must complete Schedule G. See the
The limitations under section 382 do not apply to
certain ownership changes after February 17, 2009, made
according to a restructuring plan under the Emergency
Economic Stabilization Act of 2008. See section 382(n).
For guidance in applying section 382 to loss
cooperatives 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 cooperative acquires control of another cooperative
•
(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 cooperative 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 26b. Special Deductions
Schedule C and enter on line 26b the amount from
Schedule C, line 24.
Line 25b. Deductions and Adjustments From
Schedule H
Complete Schedule H. Enter on line 25b the amount from
Schedule H, line 5. See the instructions for
16
Instructions for Form 1120-C
enter “CCF” and the amount of the deduction. For more
information, see section 7518.
Line 26c. Total NOL and Special Deductions
Combine lines 26a and 26b and enter the result on
line 26c.
Line 29
Reserved for future use.
Tax, Refundable Credits, and
Payments
Line 27. Taxable Income
See Schedule K, Question 14, to determine if the
cooperative needs to complete Schedule G. Taxable
income reported on line 27 cannot be less than the
nonpatronage taxable income shown on Schedule G,
line 10, column b.
Line 30b. Estimated Tax Payments
Enter any estimated tax payments the cooperative made
for the tax year.
Beneficiaries of trusts. If the cooperative 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 cooperative's share of the
payment in the total for line 30b. Enter “T” and the amount
of the payment in the shaded space beside line 30b.
Patronage source losses cannot be used to offset
nonpatronage income. See the instructions for
!
CAUTION
Line 30c. Overpaid Estimated Tax
If the cooperative 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 cooperative's expected
income tax liability and at least $500. File Form 4466 after
the end of the cooperative's tax year, and no later than the
due date for filing the cooperative’s tax return. Form 4466
must be filed before the cooperative files its tax return.
See the instructions for Form 4466.
Minimum taxable income. The cooperative's taxable
income cannot be less than the inversion gain of the
cooperative for the tax year, if the cooperative is an
expatriated entity or a partner in an expatriated entity. See
section 7874(a).
Net operating loss (NOL). If line 27 (figured without
regard to the minimum taxable income rule stated above)
is zero or less, the cooperative 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 cooperative
can elect to waive the carryback period and instead carry
the NOL forward to future tax years.
information on making the election to waive the carryback
period. See the Instructions for Form 1139 for other
special rules and elections.
Line 30d. Net Tax Payments
Combine lines 30a through 30c and enter the result on
line 30d.
Line 30f. Credit for Tax Paid on Undistributed
Capital Gains
Enter any credit from Form 2439, Notice to Shareholder of
Undistributed Long-Term Capital Gains, for the
cooperative'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 cooperative's income. Attach Form 2439.
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:
Line 30g. Credit For Federal Tax Paid on Fuels
Enter the total income tax credit claimed on Form 4136,
Credit for Federal Tax Paid on Fuels. Attach Form 4136.
1. The aggregate amount of NOLs arising in tax years
beginning after December 31, 2017, carried to such tax
year; or
2. 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.
Line 30h. Section 1383 Adjustment
If the cooperative would pay less total tax by claiming the
deduction for the redemption of nonqualified written
notices of allocation or nonqualified per-unit retain
certificates in the issue year versus the current tax year,
refigure the tax for the years the nonqualified written
notices or certificates were originally issued (deducting
them in the issue year), then enter the amount of the
reduction in the issue years' taxes on this line. Attach a
statement showing how the adjustment was figured. This
adjustment is treated as a payment, and any amount that
is more than the tax on line 28 will be refunded.
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).
Line 30i. Elective Payment Election Amount
from Form 3800
Enter on line 30i the total net elective payment election
amount from Form 3800, Part III, line 6, column (i). See
the Instructions for Form 3800.
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 27 by the amount of the
deduction. On the dotted line next to the entry space,
Instructions for Form 1120-C
17
Note. This election to apply some or all of the
overpayment amount to the cooperative's 2024 estimated
tax cannot be changed at a later date.
Direct deposit of refund. If the cooperative has a refund
of $1 million or more and wants it directly deposited into its
checking or savings account at any U.S. bank or other
financial institution instead of having a check sent to the
cooperative, complete Form 8302 and attach it to the
cooperative's tax return.
Line 30j. Total Payments, Refundable Credits,
and Adjustments
Add the amounts on lines 30d through 30i. Enter the total
on line 30j. Include on line 30j any other refundable credit
the cooperative is claiming. Attach a statement listing the
type of credit and the amount of the credit.
Backup withholding. If the cooperative had federal
income tax withheld from any payments it received
because, for example, it failed to give the payer its correct
EIN, include the amount withheld in the total for line 30j.
Enter the amount withheld and the words “Backup
withholding” in the blank space above line 30j.
Schedule C.
Dividends, Inclusions, and Special
Deductions
Note. Do not report income from patronage dividends on
Schedule C. Report income from patronage dividends and
per-unit retain allocations on page 1, line 9.
For purposes of the 20% ownership test on lines 1
through 7, the percentage of stock owned by the
cooperative 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. Cooperatives filing a
consolidated return should see Regulations sections
1.1502-13, 1.1502-26, and 1.1502-27 before completing
Schedule C.
Cooperatives 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 31. Estimated Tax Penalty
Generally, the cooperative does not have to file Form 2220
because the IRS can figure the penalty amount, if any, and
bill the cooperative. However, even if the cooperative does
not owe the penalty, it must complete and attach Form
2220 if:
The annualized income or adjusted seasonal
•
installment method is used, or
The cooperative is a large corporation (as defined in the
•
Instructions for Form 2220) computing its first required
installment based on the prior year's tax. See the
Instructions for Form 2220.
If Form 2220 is attached, check the box on line 31, and
enter any penalty on this line.
If the cooperative's tax liability includes a CAMT
liability, the cooperative must complete and attach
!
CAUTION
Form 2220. The affected cooperative must also
include an amount of estimated tax penalty on Form
1120-C, line 31, even if that amount is zero. Failure to
follow these instructions could result in the cooperative
receiving a penalty notice that will require an abatement
request to apply any penalty relief. See Notice 2023-42.
Line 1, Column (a)
Enter dividends (except those received on certain
debt-financed stock acquired after July 18, 1984— see
section 246A) that are:
Line 32. Amount Owed
Received from less-than-20%-owned domestic
•
corporations subject to income tax, and
Qualified for the 50% deduction under section 243(a)
If the cooperative cannot pay the full amount of tax owed,
it can apply for an installment agreement online. The
cooperative can apply for an installment agreement online
if:
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(1).
Also, include on line 1 the following.
It cannot pay the full amount shown on line 32,
The total amount owed is $25,000 or less, and
The cooperative can pay the liability in full in 24 months.
•
•
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Taxable distributions from an interest charge domestic
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international sales corporation (IC-DISC) or former
domestic international sales corporation (former DISC)
that are designated as eligible for the 50% deduction and
certain dividends of Federal Home Loan Banks. See
section 246(a)(2).
To apply using the Online Payment Agreement
agreement, the cooperative 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 cooperative 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.
Dividends (except those received on debt-financed
•
stock acquired after July 18, 1984) from a RIC. The
amount of dividends eligible for the dividends-received
deduction under section 243 is limited by section 854(b).
The cooperative 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 34. Refund
Enter the amount of any overpayment that should be
refunded or applied to next year's estimated tax.
Line 2, Column (a)
Enter on line 2:
18
Instructions for Form 1120-C
Dividends (except those received on certain
Also, include dividends received from a
less-than-20%-owned foreign sales corporation (FSC)
that:
•
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
Are attributable to income treated as effectively
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connected with the conduct of a trade or business within
the United States (excluding foreign trade income), and
Taxable distributions from an IC-DISC or former DISC
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that are considered eligible for the 65% deduction.
Qualify for the 50% deduction under section 245(c)(1)
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(B).
Line 3, Column (a)
Line 7, Column (a)
Enter the U.S.-source portion of dividends that:
Enter the following.
Dividends received on certain debt-financed stock
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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 cooperative acquired
by incurring a debt (for example, it borrowed money to buy
the stock).
Are received from 20%-or-more-owned foreign
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corporations, and
Qualify for the 65% deduction under sections 245(a)
•
and 243.
Also, include dividends received from a
20%-or-more-owned FSC that:
Are attributable to income treated as effectively
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Dividends received from a RIC on debt-financed stock.
•
connected with the conduct of a trade or business within
the United States (excluding foreign trade income), and
The amount of dividends eligible for the
dividends-received deduction is limited by section 854(b).
The cooperative should receive a notice from the RIC
specifying the amount of dividends that qualify for the
deduction.
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).
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-C
showing how the amount on line 3, column (c), was
figured.
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
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by the domestic cooperative receiving the dividends, and
All of its gross income from all sources is effectively
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connected with the conduct of a trade or business within
the United States.
Line 9, Column (c)
Line 4, Column (a)
Generally, line 9, column (c), cannot exceed the amount
from the worksheet below. However, in a year in which an
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).
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 cooperative must own
at least 10% of the stock of the foreign corporation by vote
and value.
Instructions for Form 1120-C
19
to foreign trade income, and enter the amount in column
(c). See sections 245(c)(2) and 923(a)(4)(repealed by P.
L. 106-519, section 2, Nov. 15, 2000) for additional
information.
Worksheet for Schedule C, line 9
(keep for your records)
1. Refigure Form 1120-C, page 1, line 25a, without
any deduction under section 199A, any
adjustment under section 1059, and without any
capital loss carryback to the tax year under
Line 13, Column (a)
Enter the foreign-source portion of dividends that:
section 1212(a)(1)
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Are received from a specified 10%-owned foreign
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2. Complete lines 10, 11, 12, and 13, column (c)
corporation (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 section
1248(a) and (j); and
and enter the total
3. Subtract line 2 from line 1
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4. Multiply line 3 by 65% (0.65)
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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 received from
Qualify for the section 245A deduction.
•
Line 14, Column (a)
Enter foreign dividends not reportable on lines 3, 6, 7, 8,
11, 12, or 13 of column (a).
20%-or-more-owned corporations
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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). Do not
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.).
complete the rest of this worksheet
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7. Enter the total amount of dividends received
from 20%-or-more-owned corporations that are
included on lines 2, 3, 5, 7, and 8, column
(a)
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8. Subtract line 7 from line 3
9. Multiply line 8 by 50% (0.50)
10. Subtract line 5 from line 9, column (c)
11. Enter the smaller of line 9 or
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Also, include on line 14 the cooperative'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.
line 10
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12. Dividends-received deduction after
limitation (section 246(b)). Add lines 6 and 11.
Enter the result here and on line 9, column
(c)
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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 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 cooperative
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 15
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 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). Cooperatives taking this deduction are
subject to the provisions of section 1561.
Line 16b, Column (a)
The 100% deduction does not apply to affiliated group
members that are joining in the filing of a consolidated
return.
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 12, Columns (a) and (c)
Enter in column (a) 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 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.
For cooperatives described in section 1381 that are
engaged in the marketing of agricultural or horticultural
products and are shareholders in an FSC, multiply the
total dividends reported in column (a) by 16/23 (or, 0.6957)
for the exempt portion of the dividends that are attributable
20
Instructions for Form 1120-C
Line 17, Column (a)
Line 21, Column (c)
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.
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).
Note. Consider the applicability of section 951A with
respect to CFCs owned by domestic partnerships in which
the cooperative has an interest.
Line 18, Column (a)
Line 22, Column (c)
Include gross-up for taxes deemed paid under section
960.
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 Form 8993, Part III, lines 28 and 29.
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.
Schedule G.
Allocation of Patronage and
Nonpatronage Income and
Deductions
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 cooperative's accumulated IC-DISC
•
If the cooperative's total receipts (page 1, line 1a plus lines
4 through 9) for the tax year and its total assets at the end
of the tax year are less than $250,000, the cooperative is
not required to complete Schedule G. See Schedule K,
Question 14.
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) and exempt-interest
dividends) that are received from RICs and that are not
subject to the 50% deduction.
Cooperatives are required to allocate income and
deductions between patronage and nonpatronage
business. If the transaction producing the income merely
enhances the overall profitability of the cooperative, being
merely incidental to the cooperative's operation, the
income is from a nonpatronage source. But if the source
of income or loss is from an activity that is an integral part
of the cooperative's business (such as inventory), then the
source may be patronage.
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.
Special rules also apply if a cooperative has acquired
the assets of another cooperative under a section 381(a)
transaction. Cooperatives may elect to net earnings
against losses under section 1388(j) and still be eligible
for tax-exempt treatment.
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 cooperative held the stock, you cannot
count certain days during which the cooperative's risk of
loss was diminished. See section 246(c)(4) and
Line 6a
For agricultural and horticultural cooperatives only, special
rules apply in determining and reporting the section
199A(g) deduction. See the instructions for page 1,
line 22. Also, see the Instructions for Form 8903.
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
cooperative held the stock, you cannot count certain days
during which the cooperative'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 above.
Line 8, Columns (a) and (b)
Complete Schedule H before entering an amount on this
line. Allocate the amount on Schedule H, line 5, between
patronage and nonpatronage. Only farmers' cooperatives
exempt under section 521 are allowed to take a deduction
in column (b) for nonpatronage distributions under section
1382(c).
Line 9a, Columns (a) and (b)
c. Dividends on any share of stock to the extent the
cooperative is under an obligation (including a short sale)
to make related payments with respect to positions in
substantially similar or related property.
Compute and carry back or carry over patronage and
nonpatronage NOLs separately. Under section 1388(j)(1),
cooperatives can use losses from one or more allocation
units to offset earnings of one or more other allocation
units, as permitted by their bylaws, but only to the extent
that the earnings and losses are from business done with
5. Any other taxable dividend income not properly
reported elsewhere on Schedule C.
Instructions for Form 1120-C
21
or for patrons. If a cooperative exercises this option, it
must provide the information specified in section 1388(j)
(3) in a written notice to its patrons.
Marketing, purchasing, or service activities of the
•
cooperative; or
Income from business done with or for the U.S.
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Government, or any of its agencies.
Line 9b, Columns (a) and (b)
Allocate the amount of total special deductions reported
on Schedule C, line 24, between patronage and
nonpatronage business.
“qualified written notice of allocation.” See section 1382(c)
(2)(B) for deductibility of amounts paid in redemption of
nonqualified written notices of allocation. See section
1388(d) for a definition of a nonqualified written notice of
allocation.
Line 10, Columns (a) and (b)
The taxable income reported on page 2, line 27, may not
be less than the nonpatronage taxable income shown on
Schedule G, line 10 (column b).
Line 3. Patronage Dividends
To be deductible, patronage dividends must be paid
during the payment period that begins on the 1st day of
the tax year in which the patronage occurs and ends on
the 15th day of the 9th month after the end of that tax year.
Line 11, Column (a)
Combine lines 10(a) and 10(b).
See sections 1382(e) and (f) for special rules for the
time when patronage occurs if products are marketed
under a pooling arrangement, or if earnings are includible
in the gross income of the cooperative for a tax year after
the year in which the patronage occurred.
Patronage dividends include any amount paid to a
patron by a cooperative based on the quantity or value of
business done with or for that patron under a pre-existing
obligation to pay that amount. The amount is determined
by reference to the net earnings of the organization from
business done with or for its patrons.
Note. Any patronage source losses (line 10, column (a))
cannot be used to offset nonpatronage income (line 10,
column (b)).
Line 12, Column (a)
Enter any unused patronage loss from line 10, column (a).
Line 13, Column (b)
Enter any unused nonpatronage loss from line 10, column
(b).
Schedule H.
Deductions and Adjustments Under
Section 1382
Line 1. Dividends Paid on Capital Stock (Section
521 Cooperatives Only)
Enter the amount actually or constructively paid as
dividends during the tax year on:
Note. Net earnings are not reduced by dividends paid on
capital stock of the organization if there is a legally
enforceable agreement that such dividends are in addition
to amounts otherwise payable to patrons derived from
business done with or for patrons.
Patronage dividends may be paid in:
Money,
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•
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Qualified written notices of allocation, or
Other property (except nonqualified written notices of
Common stock (whether voting or nonvoting),
Preferred stock,
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•
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•
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allocation).
Capital retain certificates,
Line 3b. Qualified written notices of allocation. A
Revolving fund certificates,
written notice of allocation means:
Letters of advice, or
Any capital stock,
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•
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•
•
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Other documentary evidence of a proprietary interest in
Revolving fund certificate,
Retain certificate,
the cooperative association.
Certificate of indebtedness,
Letter of advice, or
See Regulations section 1.1382-3(b) for more
information.
Other written notice, which states the dollar amount
Line 2. Nonpatronage Income Allocated to
Patrons (Section 521 Cooperatives Only)
allocated to the patron by the cooperative and the part, if
any, which is a patronage dividend.
In general, a qualified written notice of allocation is a
Enter nonpatronage income allocated to patrons. Payment
may be in:
written notice of allocation that is:
Paid as part of a patronage dividend, in money or by
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Money,
•
•
•
qualified check equal to at least 20% of the patronage
dividend, and
Qualified written notices of allocation, or
Other property (except nonqualified written notices of
One of the following conditions is met:
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allocation).
1. The patron must have at least 90 days from the date
The amounts must be paid during the payment period
that begins on the 1st day of the tax year and ends on the
15th day of the 9th month after the end of the tax year in
which the income was earned.
Nonpatronage income. Nonpatronage income
includes incidental income from sources not directly
related to:
the written notice of allocation is paid to redeem it in cash,
and must receive written notice of the right of redemption
at the time the patron receives the allocation; or
2. The patron must agree to have the allocation
treated as constructively received and reinvested in the
cooperative. See section 1388(c)(2) and the related
22
Instructions for Form 1120-C
regulations for information on how this consent must be
made.
Schedule J.
Tax Computation
Line 3d. Nonqualified written notices of allocation. If
a written notice of allocation does not qualify, no
deduction is allowable at the time it is issued. However,
the cooperative is entitled to a deduction or refund of tax
when the nonqualified written notice of allocation is finally
redeemed, if that notice was paid as a patronage dividend
during the payment period for the tax year during which
the patronage occurred. The deduction or refund is
allowed, but only to the extent that amounts paid to
redeem the nonqualified written notices of allocation are
paid in money or other property (other than written notices
of allocation) which do not exceed the stated dollar
amounts of the nonqualified written notices of allocation.
See section 1382(b) and Regulations sections 1.1382-2
and 1383.
Line 1. Income Tax
Multiply taxable income (page 2, line 27) by 21% (0.21).
Enter this amount on line 1.
Deferred tax under section 1291. If the cooperative
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, line 8z, as other interest.
Section 1383 provides special rules for figuring the
cooperative's tax in the year nonqualified written notices of
allocation are redeemed. See Regulations section
adjustment, if any, to report on line 30h.
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 cooperative is filing Form
8978 to report adjustments shown on Form 8986 they
received from partnerships which have been audited and
have elected to push out imputed underpayments to their
partners, include any increase in taxes due (positive
amount) from Form 8978, line 14, in the total for Form
1120-C, 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
Amounts paid to patrons are not patronage dividends if
paid:
1. Out of earnings not from business done with or for
patrons;
2. Out of earnings from business done with or for other
patrons to whom no amounts or smaller amounts are paid
for substantially identical transactions;
3. To redeem capital stock, certificates of
indebtedness, revolving fund certificates, retain
certificates, letters of advice, or other similar documents;
or
4. Without reference to the net earnings of the
cooperative organization from business done with or for its
patrons.
Line 2. Base Erosion Minimum Tax
If the cooperative 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
Line 4. Section 199A(g) deduction allocated to pa-
trons. For agricultural and horticultural cooperatives only,
cooperatives engaged in the marketing or manufacture,
production, growth, or extraction of agricultural or
horticultural products may be eligible to compute a
deduction under section 199A(g). See the instructions for
Line 3. Corporate Alternative Minimum Tax
Enter on line 3 the amount from Form 4626, Part II, line 13,
if applicable. See the Instructions for Form 4626.
Line 5a. Foreign Tax Credit
To find out when a cooperative can take the credit for
payment of income tax to a foreign country or U.S.
territory, see Form 1118, Foreign Tax
Credit—Corporations.
An agricultural or horticultural cooperative, as defined
in section 199A(g), must reduce its section 1382
deduction by the amount of the section 199A(g) deduction
that was passed through to patrons.
Line 5b. Qualified Electric Vehicle Credit
Note. Only include on line 4 the portion of the section
199A(g) deduction attributable to the qualified payments
reported on this schedule. Marketing cooperatives that
distribute patronage as per-unit retain allocations must
attach a statement showing the amount of the section
199A(g) deduction attributable to the per-unit retain
allocations.
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. General Business Credit
Use Form 3800 to claim any general business credits.
Enter on line 5c the allowable credit from Form 3800, Part
II, line 38. See the Instructions for Form 3800.
Instructions for Form 1120-C
23
Line 8
Elective allocations to patrons of subchapter T coop-
eratives. The cooperative may elect to allocate any or all
of certain credits among the patrons based on the quantity
or value of business done with or for such patrons. This
includes the following, if applicable:
Include the following taxes and interest on lines 8a
through 8z. Enter the total on line 9.
Line 8a. Recapture of investment credit. If the
cooperative 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, Recapture of Investment Credit. See the
Instructions for Form 4255.
Line 8b. Recapture of low-income housing credit. If
the cooperative 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 cooperative
did not follow the procedures that would have prevented
recapture of the credit, it may owe a tax. See Form 8611,
Recapture of Low-Income Housing Credit.
Biofuel producer credit (Form 6478);
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Renewable electricity, refined coal, and Indian coal
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production credit (Form 8835);
Biodiesel, renewable diesel, or sustainable aviation
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fuels credit (Form 8864); and
Low sulfur diesel fuel production credit (Form 8896).
For the allocation to take effect, the cooperative must
•
designate the apportionment in a written notice mailed to
its patrons before the due date of the cooperative's return.
The credit amount allocated to patrons cannot be included
on line 5c. Once made, the election cannot be revoked.
For more information, see the instructions for the
applicable credit form. Also, see the Instructions for Form
3800. For tax associated with a decrease in the credit
Line 8c. Alternative tax on qualifying shipping activi-
ties. Enter any alternative tax on qualifying shipping
activities from Form 8902. Check the box for Form 8902.
Required allocations to patrons of subchapter T co-
operatives. Any excess of the certain credits that are not
used by the cooperative because of the tax liability
limitation must be passed through to the patrons. This
includes the following credits, if applicable.
Line 8z. Other. Include on line 8z any additional taxes
and interest such as the items discussed below. Attach a
statement showing the computation of each item included
in the total for line 8z and identify the applicable Code
section and the type of tax or interest.
Investment credit (Form 3468).
•
•
•
•
•
Recapture of Indian employment credit. Generally, if an
•
Work opportunity credit (Form 5884).
employer terminates the employment of a qualified
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.
Empowerment zone employment credit (Form 8844).
Indian employment credit (Form 8845).
Credit for employer differential wage payments (Form
8932).
Credit for small employer health insurance premiums
•
(Form 8941).
Recapture of new markets credit (see Form 8874, New
•
These credits cannot be carried back or over by the
cooperative. See the applicable form and related
instructions for details. For tax associated with a recapture
Markets Credit, and Form 8874-B, Notice of Recapture
Event for New Markets Credit).
Recapture of employer-provided childcare facilities and
•
services credit (see Form 8882).
Interest on deferred tax attributable to (a) installment
•
Line 5d. Credit for Prior Year Minimum Tax
To figure any allowable minimum tax credit and any
carryforward of that credit, use Form 8827.
sales of certain timeshares and residential lots (section
453(l)(3)), and (b) certain nondealer installment
obligations (section 453A(c)).
Interest due on deferred gain (section 1260(b)).
•
Line 5e. Bond Credits
Enter allowable credits from Form 8912, Credit to Holders
of Tax Credit Bonds, line 12.
Interest due under section 1291(c)(3). See Form 8621
•
and the Instructions for Form 8621.
Recapture of elective allocation of credit to
patrons. If the amount of any of the following elective
credits apportioned to any patron is decreased, there is a
tax imposed on the cooperative, not the patron.
Line 6. Total Credits
Add lines 5a through 5e and enter the total on line 6.
Biofuel producer credit (Form 6478). See section 40(g)
•
Decrease attributable to partner's audit liability un-
der section 6226. If the cooperative is filing Form 8978
to report adjustments shown on Form 8986 they received
from partnerships which 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-C, 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
(6)(B)(iii).
Renewable electricity, refined coal, and Indian coal
•
production credit (Form 8835). See section 45(e)(11)(C).
Biodiesel, renewable diesel, or sustainable aviation
•
fuels credit (Form 8864). See section 40A(e)(6)(B)(iii).
Low sulfur diesel fuel production credit (Form 8896).
•
See section 45H(f)(3).
For details on the recapture of the credits, see the
instructions for the applicable form.
Recapture of required excess credit allocated to
patrons. If the cooperative allocated excess credit to
patrons, any credit recapture applies as if the cooperative
had claimed the entire credit. For details, see section
24
Instructions for Form 1120-C
46(h) (as in effect prior to enactment of the Revenue
Reconciliation Act of 1990). This applies to the following
credits.
Note. If the cooperative is an “excluded member” of a
controlled group (see definition in the Instructions for
Schedule O (Form 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, and
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.
Investment credit (Form 3468).
•
•
•
•
•
Work opportunity credit (Form 5884).
Empowerment zone employment credit (Form 8844).
Indian employment credit (Form 8845).
Credit for small employer health insurance premiums
(Form 8941).
Credit for employer differential wage payments (Form
•
8932).
Line 10. Total Tax
Include any deferred tax on the termination of a section
1294 election applicable to shareholders in a qualified
electing fund in the amount entered on line 10. See the
Instructions for Form 8621.
Subtract any deferred tax on the cooperative's share of
undistributed earnings of a qualified electing fund. See the
Instructions for Form 8621.
How to report. If deferring tax, attach a statement
showing the computation of each item included in, or
subtracted from, the total for line 10. On the dotted line
next to line 10, specify (a) the applicable Code section, (b)
the type of tax, and (c) the amount of tax.
For this purpose, “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).
Schedule K.
Other Information
Item 7
Complete all items and questions that apply to the
cooperative.
Enter the cooperative's total assets (as determined by the
accounting method regularly used in keeping the
cooperative'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-.
Item 2
See the list of Principal Business Activity Codes, later.
Using the list of codes and activities, determine from
which activity the cooperative derives the highest
percentage of its total receipts. Enter on lines 2a, 2b, and
2c the principal business activity code number, the
cooperative's business activity, and a description of the
principal product or service of the cooperative. 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.
If the cooperative is required to complete Schedule L,
enter total assets from Schedule L, line 13, column (d). If
filing a consolidated return, report total consolidated
assets for all cooperatives and corporations joining in the
return.
Question 8
Check the “Yes” box if one foreign person owned at least
25% of (a) the total voting power of all classes of stock of
the cooperative entitled to vote, or (b) the total value of all
classes of stock of the cooperative.
Question 5
The constructive ownership rules of section 318 apply
in determining if a cooperative is foreign owned. See
section 6038A(c)(5) and the related regulations.
Check the “Yes” box for Question 5 if:
1. The cooperative is a subsidiary in an affiliated group
(defined later), but is not filing a consolidated return for the
tax year with that group, or
2. The cooperative 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).
If the cooperative checked “Yes,” enter on line 8a the
percentage owned by the foreign person specified in
Question 8. On line 8b, enter the name of the owner's
country.
Note. If there is more than one 25%-or-more foreign
owner, complete lines 8a and 8b for the foreign person
with the highest percentage of ownership.
Any cooperative that meets either of the above
requirements should check the “Yes” box. This applies
even if the cooperative is a subsidiary member of one
group and the parent corporation of another.
Foreign person. The term “foreign person” means:
An individual who is not a citizen or resident of the
•
United States;
Instructions for Form 1120-C
25
An individual who is a citizen or resident of a U.S.
all NOLs generated in prior years but not used to offset
income (either as a carryback or carryover) in a tax year
prior to 2023. Do not reduce the amount by any NOL
deduction reported on page 1, line 26a.
•
possession 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
Question 16
•
7701(a)(31); or
If the cooperative had gross receipts of at least $500
million in any 1 of the 3 preceding tax years, complete
Form 8991 and attach it to this return. For this purpose,
the cooperative's gross receipts include the gross receipts
of all persons aggregated with the cooperative, as
specified in section 59A(e)(3). See the Instructions for
Form 8991 to determine if the cooperative is subject to the
base erosion minimum tax.
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
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 cooperative
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 cooperative 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.
Question 17
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
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.
Item 10
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 12
Check “Yes” if the taxpayer 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
section 163(j) and the Instructions for Form 8990.
Generally, if the cooperative 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 in Item 12 and file the
return by its due date, including extensions. Do not attach
the statement described in Temporary Regulations section
301.9100-12T. Once made, the election is irrevocable.
Question 18
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.
If the cooperative 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.
Exclusions from filing. A taxpayer is not required to file
Form 8990 if the taxpayer is a small business taxpayer
and does not have excess business interest expense from
a partnership. A taxpayer is also not required to file Form
8990 if the taxpayer only has business interest expense
from these excepted trades or businesses:
Cooperatives filing a consolidated return that elect to
waive the entire carryback period for the group must
check the box in Item 12 and attach the statement
required by Regulations section 1.1502-21(b)(3) or the
election will not be valid.
An electing real property trade or business,
An electing farming business, or
Certain utility businesses.
•
•
•
Item 13
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
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
26
Instructions for Form 1120-C
defined in section 448(d)(3)), and (b) meets the gross
receipts test of section 448(c), discussed next.
Line 5. Investments
Include on this line:
State and local government obligations, the interest on
•
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.
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
cooperative.
Line 26. Adjustments to Shareholders' Equity
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
•
•
Question 19
unrecognized prior service cost.
If the cooperative 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.
Guarantees of employee stock (ESOP) debt.
•
•
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
Question 20
Books With Income per Return
Check the appropriate boxes to indicate if the cooperative
is required to file Form 4626. If the cooperative 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/
In completing Schedule M-1, the following apply.
Cooperatives with total receipts (page 1, line 1a plus
•
lines 4 through 9) 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 14, is checked.
4626 must be completed and attached to the
cooperative's return. See the Instructions for Form 4626.
Cooperatives with total assets non-consolidated (or
•
consolidated for all cooperatives/corporations included
with the tax consolidation 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.
Schedule L.
Balance Sheets per Books
The balance sheets should agree with the cooperative's
books and records.
A cooperative filing Form 1120-C that is not required to
•
file Schedule M-3 (Form 1120) may voluntarily file
Schedule M-3 instead of Schedule M-1.
Cooperatives with total receipts (page 1, line 1a plus
lines 4 through 9) 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 14, is checked.
Cooperatives that (a) are required to file Schedule M-3
•
(Form 1120) and have less than $50 million total assets at
the end of the tax year, or (b) are not required to file
Schedule M-3 (Form 1120) and voluntarily file
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-C, Schedule M-1 instead of completing Parts II
and III of Schedule M-3 (Form 1120). If the cooperative
chooses to complete Schedule M-1 instead of completing
Parts II and III of Schedule M-3, the amount on
Cooperatives with total assets nonconsolidated (or
consolidated for all cooperatives and 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). However, see the instructions
Schedule M-3 (Form 1120) for provisions that also affect
Schedule L.
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.
If filing a consolidated return, report total consolidated
assets, liabilities, and shareholder's equity for all
cooperatives and corporations joining in the return. See
Consolidated return, earlier.
Line 5c. Travel and Entertainment
Include any of the following if applicable:
Meal expenses not deductible under section 274(n).
Entertainment expenses not deductible under section
•
•
274(a).
•
Line 1. Cash
Include certificates of deposit as cash on this line.
Qualified transportation fringes not deductible under
section 274(a)(4).
Instructions for Form 1120-C
27
Expenses for the use of an entertainment facility.
The part of business gifts over $25.
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.
•
•
•
Expenses of an individual over $2,000, which are
allocable to conventions on cruise ships.
Employee achievement awards of non-tangible property
•
or of tangible property over $400 ($1,600 if part of a
qualified plan).
Nondeductible club dues.
•
The part of luxury water travel expenses not deductible
•
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
burden for business taxpayers filing this form is approved
under OMB control number 1545-0123 and is included in
the estimates shown in the instructions for their business
income tax return.
under section 274(m).
Expenses for travel as a form of education.
Other nondeductible expenses for travel and
•
•
entertainment.
Line 7. Tax-exempt Interest
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 10.
If you have comments concerning the accuracy of
these time estimates or suggestions for making this form
simpler, we would be happy to hear from you. You can
write to the Internal Revenue Service, Tax Forms and
Publications Division, 1111 Constitution Ave. NW,
IR-6526, Washington, DC 20224. Do not send Form
earlier.
Paperwork Reduction Act Notice. We ask for the
information on this form 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.
28
Instructions for Form 1120-C
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).
Form 1120-C
Principal Business Activity Codes
Once the principal business activity is
determined, entries must be made on Form
1120-C, 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.
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.
237310 Highway, Street, & Bridge
Paper Manufacturing
333310 Commercial & Service
Agriculture, Forestry, Fishing,
and Hunting
Construction
Industry Machinery Mfg
322100 Pulp, Paper, & Paperboard
237990 Other Heavy & Civil
Mills
333410 Ventilation, Heating,
Engineering Construction
Air-Conditioning, &
322200 Converted Paper Product Mfg
Crop Production
Commercial Refrigeration
Equipment Mfg
Specialty Trade Contractors
Printing and Related Support
111100 Oilseed & Grain Farming
238100 Foundation, Structure, &
Building Exterior Contractors
(including framing carpentry,
masonry, glass, roofing, &
siding)
Activities
111210 Vegetable & Melon Farming
333510 Metalworking Machinery Mfg
323100 Printing & Related Support
Activities
(including potatoes & yams)
333610 Engine, Turbine, & Power
111300 Fruit & Tree Nut Farming
Transmission Equipment Mfg
Petroleum and Coal Products
111400 Greenhouse, Nursery, &
333900 Other General Purpose
Machinery Mfg
Manufacturing
Floriculture Production
238210 Electrical Contractors
324110 Petroleum Refineries
(including integrated)
111900 Other Crop Farming
(including tobacco, cotton,
sugarcane, hay, peanut,
sugar beet, & all other crop
farming)
238220 Plumbing, Heating, &
Computer and Electronic Product
Air-Conditioning Contractors
Manufacturing
324120 Asphalt Paving, Roofing, &
238290 Other Building Equipment
Contractors
334110 Computer & Peripheral
Equipment Mfg
Saturated Materials Mfg
324190 Other Petroleum & Coal
Products Mfg
238300 Building Finishing
334200 Communications Equipment
Animal Production
Contractors (including
Mfg
Chemical Manufacturing
112111 Beef Cattle Ranching &
drywall, insulation, painting,
wallcovering, flooring, tile, &
finished carpentry)
334310 Audio & Video Equipment
Mfg
Farming
325100 Basic Chemical Mfg
112112 Cattle Feedlots
325200 Resin, Synthetic Rubber, &
Artificial & Synthetic Fibers &
Filaments Mfg
334410 Semiconductor & Other
112120 Dairy Cattle & Milk Production
112210 Hog & Pig Farming
238900 Other Specialty Trade
Contractors (including site
preparation)
Electronic Component Mfg
334500 Navigational, Measuring,
Electromedical, & Control
Instruments Mfg
325300 Pesticide, Fertilizer, & Other
112300 Poultry & Egg Production
112400 Sheep & Goat Farming
Agricultural Chemical Mfg
Manufacturing
Food Manufacturing
325410 Pharmaceutical & Medicine
Mfg
334610 Manufacturing & Reproducing
112510 Aquaculture (including
shellfish & finfish farms &
hatcheries)
Magnetic & Optical Media
311110 Animal Food Mfg
311200 Grain & Oilseed Milling
325500 Paint, Coating, & Adhesive
Electrical Equipment, Appliance,
and Component Manufacturing
Mfg
112900 Other Animal Production
Forestry and Logging
325600 Soap, Cleaning Compound, &
Toilet Preparation Mfg
311300 Sugar & Confectionery
335100 Electric Lighting Equipment
Product Mfg
Mfg
113110 Timber Tract Operations
325900 Other Chemical Product &
311400 Fruit & Vegetable Preserving
& Specialty Food Mfg
335200 Household Appliance Mfg
335310 Electrical Equipment Mfg
113210 Forest Nurseries & Gathering
Preparation Mfg
of Forest Products
Plastics and Rubber Products
Manufacturing
311500 Dairy Product Mfg
335900 Other Electrical Equipment &
113310 Logging
311610 Animal Slaughtering &
Component Mfg
Fishing, Hunting, and Trapping
114110 Fishing
326100 Plastics Product Mfg
326200 Rubber Product Mfg
Processing
Transportation Equipment
Manufacturing
311710 Seafood Product Preparation
& Packaging
114210 Hunting & Trapping
Nonmetallic Mineral Product
336100 Motor Vehicle Mfg
Manufacturing
311800 Bakeries, Tortilla, & Dry Pasta
Support Activities for Agriculture
336210 Motor Vehicle Body & Trailer
Mfg
and Forestry
327100 Clay Product & Refractory
Mfg
Mfg
311900 Other Food Mfg (including
coffee, tea, flavorings, &
seasonings)
115110 Support Activities for Crop
Production (including cotton
ginning, soil preparation,
336300 Motor Vehicle Parts Mfg
327210 Glass & Glass Product Mfg
336410 Aerospace Product & Parts
327300 Cement & Concrete Product
Mfg
planting, & cultivating)
Beverage and Tobacco Product
Mfg
336510 Railroad Rolling Stock Mfg
336610 Ship & Boat Building
Manufacturing
115210 Support Activities for Animal
327400 Lime & Gypsum Product Mfg
Production (including farriers)
312110 Soft Drink & Ice Mfg
312120 Breweries
327900 Other Nonmetallic Mineral
115310 Support Activities for Forestry
336990 Other Transportation
Product Mfg
Equipment Mfg
312130 Wineries
Primary Metal Manufacturing
Mining
Furniture and Related Product
Manufacturing
312140 Distilleries
331110 Iron & Steel Mills & Ferroalloy
211120 Crude Petroleum Extraction
211130 Natural Gas Extraction
212110 Coal Mining
Mfg
312200 Tobacco Manufacturing
337000 Furniture & Related Product
331200 Steel Product Mfg from
Purchased Steel
Textile Mills and Textile Product
Manufacturing
Mills
Miscellaneous Manufacturing
212200 Metal Ore Mining
331310 Alumina & Aluminum
313000 Textile Mills
339110 Medical Equipment &
212310 Stone Mining & Quarrying
Production & Processing
314000 Textile Product Mills
Apparel Manufacturing
315100 Apparel Knitting Mills
Supplies Mfg
212320 Sand, Gravel, Clay, &
331400 Nonferrous Metal (except
Aluminum) Production &
Processing
339900 Other Miscellaneous
Manufacturing
Ceramic & Refractory
Minerals Mining & Quarrying
315210 Cut & Sew Apparel
212390 Other Nonmetallic Mineral
331500 Foundries
Wholesale Trade
Contractors
Mining & Quarrying
Fabricated Metal Product
Merchant Wholesalers and Durable
315250 Cut & Sew Apparel Mfg
(except Contractors)
213110 Support Activities for Mining
Manufacturing
Goods
332110 Forging & Stamping
Utilities
423100 Motor Vehicle & Motor Vehicle
Parts & Supplies
315990 Apparel Accessories & Other
332210 Cutlery & Handtool Mfg
Apparel Mfg
221100 Electric Power Generation,
332300 Architectural & Structural
423200 Furniture & Home Furnishings
Transmission & Distribution
Leather and Allied Product
Manufacturing
Metals Mfg
423300 Lumber & Other Construction
221210 Natural Gas Distribution
332400 Boiler, Tank, & Shipping
Container Mfg
Materials
316110 Leather & Hide Tanning &
221300 Water, Sewage, & Other
Finishing
423400 Professional & Commercial
Equipment & Supplies
Systems
332510 Hardware Mfg
316210 Footwear Mfg (including
rubber & plastics)
221500 Combination Gas & Electric
Construction
332610 Spring & Wire Product Mfg
423500 Metal & Mineral (except
Petroleum)
332700 Machine Shops; Turned
Product; & Screw, Nut, & Bolt
Mfg
316990 Other Leather & Allied
Product Mfg
423600 Household Appliances &
Electrical & Electronic Goods
Construction of Buildings
Wood Product Manufacturing
236110 Residential Building
332810 Coating, Engraving, Heat
423700 Hardware, Plumbing, Heating
Construction
321110 Sawmills & Wood
Treating, & Allied Activities
Equipment & Supplies
Preservation
236200 Nonresidential Building
Construction
332900 Other Fabricated Metal
Product Mfg
423800 Machinery, Equipment, &
Supplies
321210 Veneer, Plywood, &
Engineered Wood Product
Mfg
Heavy and Civil Engineering
Machinery Manufacturing
423910 Sporting & Recreational
Construction
Goods & Supplies
333100 Agriculture, Construction, &
321900 Other Wood Product Mfg
237100 Utility System Construction
237210 Land Subdivision
Mining Machinery Mfg
423920 Toy & Hobby Goods &
Supplies
333200 Industrial Machinery Mfg
29
Form 1120-C (Continued)
423930 Recyclable Materials
Gasoline Stations & Fuel Dealers
Scenic & Sightseeing
Transportation
Activities Related to Credit
Intermediation
423940 Jewelry, Watch, Precious
457100 Gasoline Stations (including
Stone, & Precious Metals
convenience stores with gas)
487000 Scenic & Sightseeing
522300 Activities Related to Credit
Intermediation (including loan
brokers, check clearing, &
money transmitting)
Transportation
423990 Other Miscellaneous Durable
Goods
457210 Fuel Dealers (including
Heating Oil & Liquefied
Petroleum)
Support Activities for
Transportation
Merchant Wholesalers and
Securities, Commodity Contracts,
and Other Financial Investments
and Related Activities
Nondurable Goods
Clothing and Accessories Retailers
488100 Support Activities for Air
Transportation
424100 Paper & Paper Products
458110 Clothing & Clothing
Accessories Retailers
488210 Support Activities for Rail
Transportation
424210 Drugs & Druggists' Sundries
523150 Investment Banking &
458210 Shoe Retailers
424300 Apparel, Piece Goods, &
Securities Intermediation
488300 Support Activities for Water
Notions
458310 Jewelry Retailers
523160 Commodity Contracts
Intermediation
Transportation
424400 Grocery & Related Products
424500 Farm Product Raw Materials
424600 Chemical & Allied Products
458320 Luggage & Leather Goods
488410 Motor Vehicle Towing
Retailers
523210 Securities & Commodity
488490 Other Support Activities for
Sporting, Hobby, Book, Musical
Instrument & Miscellaneous
Retailers
Exchanges
Road Transportation
523900 Other Financial Investment
Activities (including portfolio
management & investment
advice)
424700 Petroleum & Petroleum
488510 Freight Transportation
Arrangement
Products
459110 Sporting Goods Retailers
424800 Beer, Wine, & Distilled
Alcoholic Beverages
488990 Other Support Activities for
459120 Hobby, Toy, & Game Retailers
Transportation
Insurance Carriers and Related
459130 Sewing, Needlework, & Piece
424910 Farm Supplies
Couriers and Messengers
Activities
Goods Retailers
424920 Book, Periodical, &
492110 Couriers & Express Delivery
524110 Direct Life, Health, & Medical
Insurance Carriers
459140 Musical Instrument &
Supplies Retailers
Newspapers
Services
424930 Flower, Nursery Stock, &
Florists' Supplies
492210 Local Messengers & Local
Delivery
524120 Direct Insurance (except Life,
459210 Book Retailers & News
Health, & Medical) Carriers
Dealers (including
424940 Tobacco Products &
newsstands)
Warehousing and Storage
524210 Insurance Agencies &
Brokerages
Electronic Cigarettes
459310 Florists
493100 Warehousing & Storage
424950 Paint, Varnish, & Supplies
(except lessors of
524290 Other Insurance Related
459410 Office Supplies & Stationery
424990 Other Miscellaneous
miniwarehouses &
Activities (including
Retailers
Nondurable Goods
self-storage units)
third-party administration of
insurance & pension funds)
459420 Gift, Novelty, & Souvenir
Retailers
Wholesale Trade Agents & Brokers
Information
Publishing Industries
425120 Wholesale Trade Agents &
Funds, Trusts, and Other Financial
459510 Used Merchandise Retailers
459910 Pet & Pet Supplies Retailers
459920 Art Dealers
Brokers
Vehicles
513110 Newspaper Publishers
513120 Periodical Publishers
513130 Book Publishers
525100 Insurance & Employee
Benefit Funds
Retail Trade
Motor Vehicle and Parts Dealers
441110 New Car Dealers
459930 Manufactured (Mobile) Home
525910 Form 1120-RIC, Open-End
Dealers
Investment Funds
513140 Directory & Mailing List
459990 All Other Miscellaneous
Retailers (including tobacco,
candle, & trophy retailers)
441120 Used Car Dealers
441210 Recreational Vehicle Dealers
441222 Boat Dealers
525920 Trusts, Estates, & Agency
Accounts
Publishers
513190 Other Publishers
525990 Other Financial Vehicles
(including mortgage REITs &
closed-end investment funds)
513210 Software Publishers
General Merchandise Retailers
441227 Motorcycle, ATV, & All Other
Motion Picture and Sound
455110 Department Stores
Motor Vehicle Dealers
Recording Industries
455210 Warehouse Clubs,
Real Estate, Rental, and Leasing
Real Estate
441300 Automotive Parts,
Accessories, & Tire Retailers
512100 Motion Picture & Video
Industries (except video
rental)
Supercenters, & Other
General Merch. Retailers
Furniture and Home Furnishings
Nonstore Retailers
531110 Lessors of Residential
Retailers
512200 Sound Recording Industries
Buildings & Dwellings
Nonstore retailers sell all
types of merchandise using
such methods as Internet,
mail-order catalogs,
449110 Furniture Retailers
Broadcasting, Content Providers, &
(including equity REITs)
Telecommunications
449121 Floor Covering Retailers
449122 Window Treatment Retailers
531120 Lessors of Nonresidential
516100 Radio & Television
Broadcasting Stations
Buildings (except
interactive television, or direct
sales. These types of
Miniwarehouses) (including
equity REITs)
449129 All Other Home Furnishings
516210 Media Streaming, Social
Networks, & Other Content
Providers
Retailers
Retailers should select the
PBA associated with their
primary line of products sold.
For example, establishments
primarily selling prescription
and nonprescription drugs,
select PBA code 456110
Pharmacies & Drug Retailers.
531130 Lessors of Miniwarehouses &
Self-Storage Units (including
equity REITs)
Electronics and Appliance Retailers
449210 Electronics & Appliance
517000 Telecommunications
(including Wired, Wireless,
Satellite, Cable & Other
Program Distribution,
Retailers (including
531190 Lessors of Other Real Estate
Property (including equity
REITs)
computers)
Building Material and Garden
Equipment and Supplies Dealers
Resellers, Agents, Other
Telecommunications, &
Internet Service Providers)
531210 Offices of Real Estate Agents
444110 Home Centers
& Brokers
Transportation and
Warehousing
444120 Paint & Wallpaper Retailers
444140 Hardware Retailers
531310 Real Estate Property
Managers
Data Processing, Web Search
Portals, & Other Information
Services
444180 Other Building Material
531320 Offices of Real Estate
Air, Rail, and Water Transportation
481000 Air Transportation
482110 Rail Transportation
483000 Water Transportation
Truck Transportation
Dealers
Appraisers
518210 Computing Infrastructure
Providers, Data Processing,
Web Hosting, & Related
Services
444200 Lawn & Garden Equipment &
Supplies Retailers
531390 Other Activities Related to
Real Estate
Food and Beverage Retailers
Rental and Leasing Services
445110 Supermarkets & Other
Grocery Retailers (except
Convenience)
532100 Automotive Equipment Rental
519200 Web Search Portals,
Libraries, Archives, & Other
Info. Services
Finance and Insurance
& Leasing
484110 General Freight Trucking,
Local
532210 Consumer Electronics &
Appliances Rental
445131 Convenience Retailers
445132 Vending Machine Operators
445240 Meat Retailers
484120 General Freight Trucking,
Long-distance
532281 Formal Wear & Costume
Depository Credit Intermediation
522110 Commercial Banking
522130 Credit Unions
Rental
484200 Specialized Freight Trucking
532282 Video Tape & Disc Rental
Transit and Ground Passenger
445250 Fish & Seafood Retailers
445230 Fruit & Vegetable Retailers
445291 Baked Goods Retailers
445292 Confectionery & Nut Retailers
Transportation
532283 Home Health Equipment
Rental
485110 Urban Transit Systems
522180 Savings Institutions & Other
Depository Credit
532284 Recreational Goods Rental
485210 Interurban & Rural Bus
Intermediation
Transportation
532289 All Other Consumer Goods
445298 All Other Specialty Food
Nondepository Credit
Rental
485310 Taxi & Ridesharing Services
485320 Limousine Service
Retailers
Intermediation
532310 General Rental Centers
445320 Beer, Wine, & Liquor
Retailers
522210 Credit Card Issuing
522220 Sales Financing
522291 Consumer Lending
532400 Commercial & Industrial
Machinery & Equipment
Rental & Leasing
485410 School & Employee Bus
Transportation
Health and Personal Care Retailers
485510 Charter Bus Industry
456110 Pharmacies & Drug Retailers
Lessors of Nonfinancial Intangible
522292 Real Estate Credit (including
485990 Other Transit & Ground
456120 Cosmetics, Beauty Supplies,
Assets (except copyrighted works)
mortgage bankers &
Passenger Transportation
& Perfume Retailers
originators)
533110 Lessors of Nonfinancial
Intangible Assets (except
copyrighted works)
Pipeline Transportation
456130 Optical Goods Retailers
522299 Intl, Secondary Market, &
Other Nondepos. Credit
Intermediation
486000 Pipeline Transportation
456190 Other Health & Personal Care
Retailers
30
Form 1120-C (Continued)
561210 Facilities Support Services
561300 Employment Services
Medical and Diagnostic
Laboratories
722511 Full-Service Restaurants
Professional, Scientific, and
Technical Services
722513 Limited-Service Restaurants
621510 Medical & Diagnostic
561410 Document Preparation
722514 Cafeterias, Grill buffets, &
Laboratories
Services
Buffets
Legal Services
Home Health Care Services
561420 Telephone Call Centers
561430 Business Service Centers
722515 Snack & Non-alcoholic
Beverage Bars
541110 Offices of Lawyers
541190 Other Legal Services
621610 Home Health Care Services
(including private mail centers Other Ambulatory Health Care
Accounting, Tax Preparation,
Other Services
& copy shops)
561440 Collection Agencies
561450 Credit Bureaus
Services
Bookkeeping, and Payroll Services
Repair and Maintenance
621900 Other Ambulatory Health
Care Services (including
ambulance services & blood
& organ banks)
541211 Offices of Certified Public
811110 Automotive Mechanical &
Accountants
Electrical Repair &
561490 Other Business Support
541213 Tax Preparation Services
541214 Payroll Services
Maintenance
Services (including
Hospitals
811120 Automotive Body, Paint,
repossession services, court
reporting, & stenotype
services)
541219 Other Accounting Services
Interior, & Glass Repair
622000 Hospitals
Architectural, Engineering, and
811190 Other Automotive Repair &
Maintenance (including oil
change & lubrication shops &
car washes)
Nursing and Residential Care
Related Services
561500 Travel Arrangement &
Facilities
541310 Architectural Services
Reservation Services
623000 Nursing & Residential Care
Facilities
541320 Landscape Architecture
561600 Investigation & Security
Services
811210 Electronic & Precision
Equipment Repair &
Maintenance
Services
Social Assistance
541330 Engineering Services
541340 Drafting Services
561710 Exterminating & Pest Control
624100 Individual & Family Services
Services
624200 Community Food & Housing,
& Emergency & Other Relief
Services
811310 Commercial & Industrial
Machinery & Equipment
(except Automotive &
Electronic) Repair &
561720 Janitorial Services
541350 Building Inspection Services
561730 Landscaping Services
541360 Geophysical Surveying &
Mapping Services
561740 Carpet & Upholstery Cleaning 624310 Vocational Rehabilitation
Maintenance
Services
Services
541370 Surveying & Mapping (except
Geophysical) Services
811410 Home & Garden Equipment &
561790 Other Services to Buildings & 624410 Childcare Services
Appliance Repair &
Dwellings
541380 Testing Laboratories &
Arts, Entertainment, and
Recreation
Maintenance
Services
561900 Other Support Services
811420 Reupholstery & Furniture
(including packaging &
labeling services, &
convention & trade show
organizers)
Specialized Design Services
Repair
541400 Specialized Design Services
(including interior, industrial,
graphic, & fashion design)
Performing Arts, Spectator Sports,
811430 Footwear & Leather Goods
Repair
and Related Industries
711100 Performing Arts Companies
Waste Management and
811490 Other Personal & Household
Computer Systems Design and
711210 Spectator Sports (including
Remediation Services
Goods Repair & Maintenance
Related Services
sports clubs & racetracks)
562000 Waste Management &
Personal and Laundry Services
812111 Barber Shops
541511 Custom Computer
Programming Services
711300 Promoters of Performing Arts,
Sports, & Similar Events
Remediation Services
Educational Services
611000 Educational Services
(including schools, colleges,
& universities)
Health Care and Social
Assistance
812112 Beauty Salons
812113 Nail Salons
541512 Computer Systems Design
711410 Agents & Managers for
Artists, Athletes, Entertainers,
& Other Public Figures
Services
541513 Computer Facilities
Management Services
812190 Other Personal Care Services
(including diet & weight
711510 Independent Artists, Writers,
reducing centers)
541519 Other Computer Related
& Performers
Services
812210 Funeral Homes & Funeral
Museums, Historical Sites, and
Similar Institutions
Services
Other Professional, Scientific, and
Technical Services
812220 Cemeteries & Crematories
712100 Museums, Historical Sites, &
Offices of Physicians and Dentists
541600 Management, Scientific, &
Technical Consulting
Services
Similar Institutions
812310 Coin-Operated Laundries &
621111 Offices of Physicians (except
Drycleaners
Amusement, Gambling, and
Recreation Industries
mental health specialists)
812320 Drycleaning & Laundry
Services (except
621112 Offices of Physicians, Mental
Health Specialists
541700 Scientific Research &
713100 Amusement Parks & Arcades
713200 Gambling Industries
Development Services
Coin-Operated)
621210 Offices of Dentists
541800 Advertising, Public Relations,
& Related Services
812330 Linen & Uniform Supply
713900 Other Amusement &
Offices of Other Health
812910 Pet Care (except Veterinary)
Recreation Industries
Practitioners
541910 Marketing Research & Public
Services
(including golf courses, skiing
facilities, marinas, fitness
centers, & bowling centers)
621310 Offices of Chiropractors
621320 Offices of Optometrists
Opinion Polling
812920 Photofinishing
541920 Photographic Services
812930 Parking Lots & Garages
812990 All Other Personal Services
621330 Offices of Mental Health
Practitioners (except
Physicians)
541930 Translation & Interpretation
Accommodation and Food
Services
Services
Religious, Grantmaking, Civic,
Professional, and Similar
Organizations
541940 Veterinary Services
621340 Offices of Physical,
Occupational & Speech
Therapists, & Audiologists
541990 All Other Professional,
Scientific, & Technical
Services
Accommodation
721110 Hotels (except Casino Hotels) 813000 Religious, Grantmaking,
& Motels
Civic, Professional, & Similar
Organizations (including
condominium & homeowners
associations)
621391 Offices of Podiatrists
Management of Companies
(Holding Companies)
721120 Casino Hotels
721191 Bed & Breakfast Inns
621399 Offices of All Other
Miscellaneous Health
Practitioners
721199 All Other Traveler
551111 Offices of Bank Holding
Other
Accommodation
Outpatient Care Centers
Companies
721210 RV (Recreational Vehicle)
Parks & Recreational Camps
621410 Family Planning Centers
999000 Unclassified Establishments
551112 Offices of Other Holding
Companies
(unable to classify)
621420 Outpatient Mental Health &
721310 Rooming & Boarding Houses,
Dormitories, & Workers’
Camps
Substance Abuse Centers
Administrative and Support,
Waste Management, and
Remediation Services
621491 HMO Medical Centers
621492 Kidney Dialysis Centers
Food Services and Drinking Places
621493 Freestanding Ambulatory
Surgical & Emergency
Centers
722300 Special Food Services
(including food service
Administrative and Support
contractors & caterers)
Services
621498 All Other Outpatient Care
722410 Drinking Places (Alcoholic
561110 Office Administrative
Services
Centers
Beverages)
31
Index
A
E
O
Electronic Federal Tax Payment System
Other deductions:
Amortization 14
(EFTPS) 4
Depletion 14
Overpaid 17
Allocation of patronage and
nonpatronage income and
deductions 21
Payments 17
Penalty 4
Allocations to patrons:
Elective 24
Recapture of elective allocation of credit
F
Supplies 14
Utilities 14
Recapture of required excess credit
Required 24
Other taxes:
Amortization 10
Recapture 24
G
P
B
Penalties 18
I
Income 8
Income from qualifying shipping
activities 8
C
Capital construction fund (See Merchant
Penalty:
Interest:
Marine capital construction fund)
Income 9
Interest due:
Contributions to reduce debt held by
Interest expense (relating to section
263A) 10
Interest income:
Inventory:
Credits:
Q
Section 263A uniform capitalization
rules 10
Qualifying shipping activities, Income
from 8
L
R
Lobbying expenses,
Recordkeeping 5
nondeductibility 15
D
Refund 18
M
Deductions 10
Deductions and adjustments under
Merchant Marine capital construction
fund:
Depletion 14
Minimum tax:
Depreciation 13
S
Disclosure statement, reportable
Schedule:
C 18
transaction 6
N
Dividends 9
G 21
H 22
J 23
Domestic production activities
K 25
L 27
M-1 27
32