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Տեղեկատվական գործողություններ 1125-ականների համար,

Ապրիլ – հունիս 2018

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  • 1125-ական - Մասնագետների փոխազդեցությունը
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Department of the Treasury  
Internal Revenue Service  
Instructions  
for Form 1125-E  
(Rev. October 2018)  
(Use with the October 2016 revision of Form 1125-E.)  
Compensation of Officers  
Section references are to the Internal Revenue Code  
unless otherwise noted.  
Golden Parachute Payments  
A portion of the payments made by a corporation to key  
personnel that exceeds their usual compensation may not  
be deductible. This occurs when the corporation has an  
agreement (golden parachute) with these key employees  
to pay them these excess amounts if control of the  
corporation changes. See section 280G and Regulations  
section 1.280G-1.  
Future Developments  
For the latest information about developments related to  
Form 1125-E and its instructions, such as legislation  
enacted after they were published, visit IRS.gov/  
What’s New  
Limitations on compensation.  
For tax years beginning after 2017, for purposes of the  
deduction for employee compensation in excess of $1  
million, the definition of "covered employee" has changed.  
Other special rules also apply. See Disallowance of  
Million, later.  
Disallowance of Deduction for Employee  
Compensation in Excess of $1 Million  
Publicly held corporations cannot deduct compensation to  
a “covered employee” to the extent that the compensation  
exceeds $1 million. Generally, a covered employee is:  
The principal executive officer or principle financial  
officer of the corporation (or an individual acting in that  
capacity) at any time during the tax year;  
An employee whose total compensation must be  
reported to shareholders under the Securities Exchange  
Act of 1934 because the employee is among the three  
highest compensated officers for that tax year (other than  
the principal executive officer or principal financial officer,  
or an individual acting in that capacity); or  
General Instructions  
Purpose of Form  
Certain entities with total receipts of $500,000 or more use  
Form 1125-E to provide a detailed report of the deduction  
for compensation of officers.  
A covered employee of the corporation (or any  
predecessor) for any preceding tax year beginning after  
December 31, 2016.  
Who Must File  
For this purpose, compensation does not include the  
following.  
Form 1125-E must be completed and attached to Form  
1120, 1120-C, 1120-F, 1120-RIC, 1120-REIT, or 1120S, if  
the entity has total receipts (defined below) of $500,000 or  
more, and deducts compensation for officers.  
Income from certain employee trusts, annuity plans, or  
pensions.  
Any benefit paid to an employee that is excluded from  
the employee's income.  
The following also apply.  
Definitions and Special Rules  
Total Receipts  
For purposes of Form 1125-E, total receipts are  
determined as follows.  
The deduction limit does not apply to income payable  
under a written, binding contract in effect on February 17,  
1993.  
Form 1120, page 1, line 1a, plus lines 4 through 10.  
Form 1120-C, page 1, line 1a, plus lines 4 through 9.  
Form 1120-F, Section II, line 1a, plus lines 4 through 10.  
Form 1120-RIC, Part I, line 8, plus net capital gain from  
The $1 million limit is reduced by amounts disallowed  
as excess parachute payments under section 280G.  
Special rules apply to binding written contracts in effect  
on November 2, 2017, and which were not materially  
modified on or after that date.  
Part II, line 1, and Form 2438, line 9a.  
Form 1120-REIT, Part I, line 8, plus net capital gain  
See section 162(m), as modified by P.L. 115-97.  
from Part III, line 10, and Form 2438, line 9a.  
Limitations on tax benefits for executive compensa-  
tion under the Treasury Troubled Asset Relief Pro-  
gram (TARP). The $1 million compensation limit is  
reduced to $500,000 for executive remuneration and  
deferred deduction executive remuneration paid to  
covered executives by any entity that receives or has  
received financial assistance under TARP. The limit  
applies for each period in which obligations arising from  
Form 1120S, page 1, line 1a, plus lines 4 and 5; income  
reported on Schedule K, lines 3a, 4, 5a, and 6; income or  
net gain reported on Schedule K, lines 7, 8a, 9, and 10;  
and income or net gain reported on Form 8825, lines 2,  
19, and 20a.  
For more information on total receipts, see the  
instructions for the applicable entity’s return.  
Oct 29, 2018  
Cat. No. 57670C  
 
financial assistance under TARP remain outstanding. The  
$500,000 is reduced by any amounts disallowed as  
excess parachute payments. See section 162(m)(5) for  
definitions and other special rules. Also see Notice  
2008-94, 2008-44 I.R.B. 1070, for additional guidance.  
In addition, any excess parachute payments made to a  
covered executive by an applicable employer participating  
in a Treasury TARP are not deductible as compensation if  
the payments are made because of a severance from  
employment during an applicable tax year. For this  
purpose, a parachute payment is any payment to a senior  
executive officer for departure from a company for any  
reason, except for payments for services performed or  
benefits accrued. These limits do not apply to a payment  
already treated as a parachute payment. See section  
280G(e) and Notice 2008-94.  
sold, elective contributions to a section 401(k) cash or  
deferred arrangement, or amounts contributed under a  
salary reduction SEP agreement or a SIMPLE IRA plan.  
If the corporation claims a credit for any wages paid or  
incurred, it may need to reduce its deduction for officers’  
compensation. See section 280C. If the corporation  
provided taxable fringe benefits to its officers, such as  
personal use of a car, do not deduct as wages the amount  
allocated for depreciation and other expenses claimed  
elsewhere on the return.  
Line 4  
Enter the amount from line 4 on Form 1120, page 1,  
line 12, or the appropriate line of the applicable return.  
See the instructions for the applicable entity's return.  
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.  
Specific Instructions  
Line 1  
Complete columns (a) through (f) for all officers. A  
corporation determines who is an officer under the laws of  
the state/country where it is incorporated.  
If a consolidated return is filed, this information must be  
furnished for each officer of the affiliated group. However,  
the common parent of a consolidated group may file, as  
part of its consolidated return, one Form 1125-E on behalf  
of the members of the affiliated group.  
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  
Column (b). Enter each officer's social security number  
(SSN) in column (b). Filers may elect to provide only the  
last four digits of the officer's SSN.  
information are confidential, as required by section 6103.  
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.  
Column (f). Enter each officer's total deductible  
compensation (such as salaries, commissions, bonuses,  
taxable fringe benefits, etc.). For officers of an S  
corporation, include fringe benefits and expenditures  
made on behalf of officers owning more than 2% of the  
corporation's stock. Do not include amounts paid or  
incurred for fringe benefits of officers owning 2% or less of  
an S corporation's stock. These amounts are reported  
elsewhere on the corporation's return. See the  
Instructions for Form 1120S for more information on  
deductible officers’ compensation.  
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. See the  
instructions for the tax return with which this form is filed.  
Line 3  
Enter compensation of officers deductible elsewhere on  
the return, such as amounts included in cost of goods  
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