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Form 1120-C Instructions

Instructions for Form 1120-C, U.S. Income Tax Return for Cooperative Associations

Rev. 2023

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  • Form 1120-C - U.S. Income Tax Return for Cooperative Associations
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Department of the Treasury  
Internal Revenue Service  
2023  
Instructions for Form 1120-C  
U.S. Income Tax Return for Cooperative Associations  
Section references are to the Internal Revenue Code  
Future Developments  
unless otherwise noted.  
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  
Future Developments . . . . . . . . . . . . . . . . . . . . . . . . 1  
What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1  
Photographs of Missing Children . . . . . . . . . . . . . . . . 1  
The Taxpayer Advocate Service . . . . . . . . . . . . . . . . . 2  
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.  
by the Public . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
How To Get Forms and Publications . . . . . . . . . . . . . . 2  
General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Who Must File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
When To File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Assembling the Return . . . . . . . . . . . . . . . . . . . . . . . 3  
Tax Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  
Estimated Tax Payments . . . . . . . . . . . . . . . . . . . . . . 4  
Interest and Penalties . . . . . . . . . . . . . . . . . . . . . . . . 4  
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . . 5  
Accounting Period . . . . . . . . . . . . . . . . . . . . . . . . . . 5  
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . . . 5  
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5  
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,  
line 3. Also, see new Schedule K, Question 20.  
Elective payment election. Applicable entities and  
electing taxpayers can elect to treat certain credits as  
elective payments. Resulting overpayment may result in  
refunds. See the instructions for line 30i. Also, see the  
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/  
2023-26_IRB#NOT-2023-42. Also, see the instructions for  
Other Forms and Statements That May Be  
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6  
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 6  
Period Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6  
Name and Address . . . . . . . . . . . . . . . . . . . . . . . . . . 6  
Item A. Identifying Information . . . . . . . . . . . . . . . . . . 7  
Item B. Employer Identification Number (EIN) . . . . . . . 7  
Item C. Type of Cooperative . . . . . . . . . . . . . . . . . . . . 7  
Item D. Initial Return, Final Return, Name Change,  
Address Change, or Amended Return . . . . . . . . . 8  
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10  
Tax, Refundable Credits, and Payments . . . . . . . . . . 17  
Schedule C. Dividends, Inclusions, and Special  
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . 18  
Schedule G. Allocation of Patronage and  
Nonpatronage Income and Deductions . . . . . . . 21  
Schedule H. Deductions and Adjustments Under  
Section 1382 . . . . . . . . . . . . . . . . . . . . . . . . . . 22  
Photographs of Missing Children  
Schedule J. Tax Computation . . . . . . . . . . . . . . . . . 23  
Schedule K. Other Information . . . . . . . . . . . . . . . . . 25  
Schedule L. Balance Sheets per Books . . . . . . . . . . 27  
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  
Books With Income per Return . . . . . . . . . . . . . 27  
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32  
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  
rights under the Taxpayer Bill of Rights.  
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  
need on IRS.gov/FormsPubs. Otherwise, the cooperative  
can go to IRS.gov/OrderForms to place an order and have  
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  
General Instructions  
business;  
The business is facing an immediate threat of adverse  
Purpose of Form  
action; or  
Use Form 1120-C, U.S. Income Tax Return for  
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).  
TaxpayerAdvocate.IRS.gov. The cooperative can also call  
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  
System at IRS.gov/SAMS.  
Exceptions. This does not apply to organizations which  
are:  
Exempt from income tax under chapter 1 (other than  
exempt farmers' cooperatives under section 521);  
For more information, go to IRS.gov/Advocate.  
How To Make a Contribution To  
Reduce Debt Held by the Public  
Subject to Part II (section 591 and following),  
subchapter H, chapter 1 (relating to mutual savings  
banks);  
Subject to subchapter L (section 801 and following),  
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  
online, go to www.treasurydirect.gov and click on “How To  
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  
may owe. See the instructions for line 32 for details on  
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;  
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  
as timely filing” rule for tax returns. Go to IRS.gov/PDS for  
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  
return;  
Call the IRS for information about the processing of the  
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  
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  
signature,  
Include their Preparer Tax Identification Number (PTIN),  
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.  
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  
make installment payments of estimated tax.  
If, after the cooperative figures and deposits estimated  
Tax Payments  
tax, it finds that its tax liability for the year will be more or  
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  
for line 32.  
If the cooperative overpaid estimated tax, it may be able  
to get a quick refund by filing Form 4466, Corporation  
Application for Quick Refund of Overpayment of  
Electronic Deposit Requirement  
Estimated Tax. See the instructions for lines 30b and 30c.  
Cooperatives must use electronic funds transfer to make  
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  
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  
instructions for line 31. Also see Relief from additions to  
To get more information about EFTPS or to enroll in  
EFTPS, visit EFTPS.gov or call 800-555-4477. To contact  
EFTPS using the Telecommunications Relay Services  
(TRS), for people who are deaf, hard of hearing, or have a  
speech disability, dial 711 and provide the TRS assistant  
the 800-555-4477 number above or 800-733-4829.  
Depositing on time. For 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  
!
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  
due to reasonable cause. See Caution, earlier.  
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  
estimated tax if it expects its total tax for the year (less  
applicable credits) to be $500 or more.  
The installments are due by the 15th day of the 4th, 6th,  
9th, and 12th months of the tax year. If any 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  
Return;  
Form 943, Employer's Annual Federal Tax Return for  
Agricultural Employees;  
Form 944, Employer's ANNUAL Federal Tax Return; or  
Form 945, Annual Return of Withheld Federal Income  
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  
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  
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  
for Schedule M-1, later.  
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.  
Online. Go to IRS.gov/EIN. The EIN is issued  
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  
described under Who Must File, earlier, should check the  
“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  
See the instructions for Schedule C, later. Complete  
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)  
adjustment. See Section 481(a) adjustment, earlier.  
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  
Form 8990. Also, see Limitation on deduction in the  
instructions for line 16 and Schedule K, Questions 17 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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$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.  
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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.  
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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,  
Question 17 and 18, later.  
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  
website at www.EFAST.dol.gov.  
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  
the EFAST2 website at www.EFAST.dol.gov.  
Form 5500-EZ. Annual Return of A One-Participant  
(Owners/Partners and Their Spouses) Retirement Plan or  
A Foreign Plan. File this form for a plan that only covers  
the owner (or the owner and spouse) or a foreign plan that  
is required to file an annual return and does not file the  
annual return electronically on Form 5500-SF. See the  
Instructions for Form 5500-EZ.  
Line 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  
instructions for line 9.  
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  
instructions for Schedule G.  
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  
See the instructions for Schedule C. Then, complete  
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.  
See the instructions for Schedule K, Item 12 for  
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:  
(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.  
Taxable distributions from an interest charge domestic  
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  
Application, go to IRS.gov/OPA. Under an installment  
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  
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  
that are considered eligible for the 65% deduction.  
Qualify for the 50% deduction under section 245(c)(1)  
(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  
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  
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  
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  
by the domestic cooperative receiving the dividends, and  
All of its gross income from all sources is effectively  
connected with the conduct of a trade or business within  
the United States.  
Line 9, Column (c)  
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  
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.  
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.  
See the instructions for line 3b for a definition of  
“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,  
Qualified written notices of allocation, or  
Other property (except nonqualified written notices of  
Common stock (whether voting or nonvoting),  
Preferred stock,  
allocation).  
Capital retain certificates,  
Line 3b. Qualified written notices of allocation. A  
Revolving fund certificates,  
written notice of allocation means:  
Letters of advice, or  
Any capital stock,  
Other documentary evidence of a proprietary interest in  
Revolving fund certificate,  
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  
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:  
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  
1.1383-3 and the instructions for page 2, line 30h for the  
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  
tax, see the instructions for Schedule J, line 6.  
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  
8991. Also, see Schedule K, Question 16, later.  
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  
page 1, line 22.  
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);  
Renewable electricity, refined coal, and Indian coal  
production credit (Form 8835);  
Biodiesel, renewable diesel, or sustainable aviation  
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  
allocated to patrons, see Line 8z. Other, later.  
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  
of credit, see Line 8z. Other, later.  
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  
tax, see the instructions for Schedule J, line 1.  
(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  
limitation. See Question 18. Also, see the Instructions for  
Form 8990.  
Certain real property trades or businesses and farming  
businesses qualify to make an election not to limit  
business interest expense. This is an irrevocable election.  
If you make this election, you are required to use the  
alternative depreciation system to depreciate any  
nonresidential real property, residential rental property,  
and qualified improvement property for an electing real  
property trade or business, and any property with a  
recovery period of 10 years or more for an electing  
farming business. See section 168(g)(1)(F). Also, you are  
not entitled to the special depreciation allowance for that  
property. For a taxpayer with more than one qualifying  
business, the election is made with respect to each  
business.  
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.  
2023-03_IRB#NOT-2023-7, for the current year, Form  
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  
for Schedule M-1, later. See the separate Instructions for  
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  
send us comments through IRS.gov/FormComments. Or  
write to the Internal Revenue Service, Tax Forms and  
Publications Division, 1111 Constitution Ave. NW,  
IR-6526, Washington, DC 20224. Do not send Form  
1120-C to this address. Instead, see Where To File,  
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