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Formulir 1120-L Instruksi

Instruksi Instruksi untuk Formulir 1120-L, Perusahaan Asuransi Jiwa AS Pajak Penghasilan Kembali

Rev. 2023

Borang Berkaitan

  • Formulir 1120-L - Pajak Penghasilan Perusahaan Asuransi Jiwa Amerika Serikat
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Department of the Treasury  
Internal Revenue Service  
2023  
Instructions for Form 1120-L  
U.S. Life Insurance Company Income Tax Return  
Section references are to the Internal Revenue Code  
Future Developments  
unless otherwise noted.  
For the latest information about developments related to  
Form 1120-L 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  
How To Get Forms and Publications . . . . . . . . . . . . . . 2  
General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Who Must File . . . . . . . . . . . . . . . . . . . . . . . . . . 2  
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Electronic Filing . . . . . . . . . . . . . . . . . . . . . . . . . 3  
When To File . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . 3  
Paid Preparer Authorization . . . . . . . . . . . . . . . . . 4  
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  
Assembling the Return . . . . . . . . . . . . . . . . . . . . 4  
Tax Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 5  
Interest and Penalties . . . . . . . . . . . . . . . . . . . . . 5  
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . 6  
Accounting Period . . . . . . . . . . . . . . . . . . . . . . . 6  
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . 6  
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . 6  
What's New  
Increase in penalty for failure to file. For tax returns  
required to be filed in 2024, the minimum penalty for  
failure to file a return that is more than 60 days late has  
increased to the smaller of the tax due or $485. See Late  
filing of return, later.  
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, certain corporations must  
determine whether they are subject to the new CAMT and  
calculate CAMT if applicable. See the instructions for  
19.  
Elective payment election. Applicable entities and  
electing taxpayers can elect to treat certain credits as  
elective payments. Any resulting overpayment may result  
in refunds. See the instructions for line 27i, later. Also, see  
the Instructions for Form 3800.  
Other Forms and Statements That May Be  
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6  
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 7  
Period Covered . . . . . . . . . . . . . . . . . . . . . . . . . 7  
Name and Address . . . . . . . . . . . . . . . . . . . . . . . 7  
Item A. Identifying Information . . . . . . . . . . . . . . . 7  
Item B. Employer Identification Number (EIN) . . . . 8  
Item D. Section 953 Elections . . . . . . . . . . . . . . . 9  
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 corporations must still file the  
2023 Form 2220, even if they owe no estimated tax  
penalty. However, affected corporations may exclude the  
CAMT tax liability when calculating the required annual  
payment on Form 2220. Affected corporations must also  
include an amount of estimated tax penalty on line 29 of  
Form 1120-L (or other appropriate line of the corporation's  
income tax return), even if that amount is zero. Failure to  
follow these instructions could result in affected  
Item E. Final Return, Name Change, Address  
Change, or Amended Return . . . . . . . . . . . . . . 9  
Life Insurance Company Taxable Income . . . . . . . 9  
Schedule A—Dividends, Inclusions,  
Dividends-Received Deduction, and Other  
Special Deductions . . . . . . . . . . . . . . . . . . . . 16  
Schedule B—Investment Income . . . . . . . . . . . . 19  
corporations receiving a penalty notice that will require an  
abatement request to apply the relief provided by Notice  
2023-42. See Notice 2023-42, 2023-26 I.R.B. 1085,  
see the instructions for line 29.  
Schedule F—Increase (Decrease) in  
Reserves (Section 807) . . . . . . . . . . . . . . . . . 19  
Schedule G—Policy Acquisition Expenses . . . . . 20  
Schedule K—Tax Computation . . . . . . . . . . . . . 21  
Schedule L . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22  
Schedule M—Other Information . . . . . . . . . . . . . 23  
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26  
Photographs of Missing Children  
The IRS is a proud partner with the National Center for  
missing children selected by the Center may appear in  
instructions on pages that would otherwise be blank. You  
Jan 30, 2024  
Cat. No. 11485H  
           
can help bring these children home by looking at the  
photographs and calling 1-800-THE-LOST  
(1-800-843-5678) if you recognize a child.  
companies if they were U.S. corporations must file Form  
1120-L. This includes organizations described in section  
501(m)(1) that provide commercial-type life insurance.  
The Taxpayer Advocate Service  
Mutual Savings Banks Conducting Life  
Insurance Business  
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.  
Mutual savings banks conducting life insurance business  
and meeting the requirements of section 594 are subject  
to an alternative tax consisting of:  
A partial tax computed on Form 1120, U.S. Corporation  
Income Tax Return, on the taxable income of the bank,  
excluding the life insurance department; and  
As a taxpayer, the corporation has rights that the IRS  
must abide by in its dealings with the corporation. TAS can  
help the corporation if:  
A partial tax on the taxable income computed on Form  
1120-L of the life insurance department.  
A problem is causing financial difficulty for the business;  
The business is facing an immediate threat of adverse  
Enter the combined tax on Form 1120, Schedule J,  
line 1. File Form 1120 and attach Form 1120-L as a  
statement (and identify it as such) or attach a statement  
showing the computation of the taxable income of the life  
insurance department (including all relevant information  
that would be reported on Form 1120-L).  
action; or  
The corporation has tried repeatedly to contact the IRS  
but no one has responded, or the IRS hasn't responded  
by the date promised.  
The TAS toolkit at TaxpayerAdvocate.IRS.gov can help  
the corporation understand these rights.  
Foreign Life Insurance Companies  
TAS has offices in every state, the District of Columbia,  
and Puerto Rico. Local advocates' numbers are in their  
local directories and at TaxpayerAdvocate.IRS.gov/  
Contact-Us. The corporation can also call TAS at  
877-777-4778.  
TAS also works to resolve large-scale or systemic  
problems that affect many taxpayers. If the corporation  
knows of one of these broad issues, please report it to  
TAS through the Systemic Advocacy Management  
System at IRS.gov/SAMS.  
A foreign life insurance company that sells a U.S. real  
property interest must file Form 1120-L and Schedule D  
(Form 1120) to report the sale. Gain or loss from the sale  
of a U.S. real property interest is considered effectively  
connected with the conduct of a U.S. business, even  
though the foreign life insurance company does not carry  
on any insurance business in the United States and is not  
otherwise required to file a U.S. income tax return. See  
sections 842 and 897; and the instructions for Schedule K  
line 8, later.  
Foreign-owned domestic disregarded entities. If a  
foreign person, including a foreign corporation, wholly  
owns a domestic disregarded entity (DE), the domestic  
DE is treated as a domestic corporation separate from its  
owner (the foreign corporation) for purposes of the  
reporting requirements under section 6038A that apply to  
25% foreign-owned domestic corporations. These rules  
apply to a domestic DE owned by a foreign insurance  
company that makes an election under section 953(c)(3)  
(C) but do not apply to a domestic DE owned by a foreign  
insurance company that makes an election under section  
953(d) (for information on these elections, see the  
instructions for item D). If a foreign insurance company  
electing under section 953(c)(3)(C) wholly owns a  
domestic DE, the DE may be required 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. For additional information and  
coordination with Form 5472 filing by the domestic DE,  
see the Instructions for Form 5472.  
For more information, go to  
How To Get Forms and Publications  
Internet. You can access the IRS website 24 hours a day,  
7 days a week, at IRS.gov to:  
Download forms, instructions, and publications;  
Order IRS products online;  
Research your tax questions online;  
Search publications online by topic or keyword;  
View Internal Revenue Bulletins (IRBs) published in  
recent years; and  
Sign up to receive local and national tax news by email.  
Tax forms and publications. The corporation can view,  
download, or print all of the forms and publications it may  
need on IRS.gov/FormsPubs. Otherwise, the corporation  
can go to IRS.gov/OrderForms to place an order and have  
forms mailed to it.  
General Instructions  
Note. A domestic DE is generally a transparent entity.  
Any insurance company that must file Form 1120-L will  
include on Form 1120-L any tax items of a wholly owned  
domestic DE that are subject to reporting.  
Qualified opportunity investment. If the corporation  
held a qualified investment in a qualified opportunity fund  
(QOF) at any time during the year, the corporation must  
file its return with Form 8997, Initial and Annual Statement  
Purpose of Form  
Use Form 1120-L to report the income, gains, losses,  
deductions, credits, and to figure the income tax liability of  
life insurance companies.  
Who Must File  
Every domestic life insurance company and certain  
foreign corporations that would qualify as life insurance  
2
Instructions Form 1120-L (2023)  
             
of Qualified Opportunity Fund (QOF) Investments,  
attached. See the Instructions for Form 8997.  
When To File  
Generally, a corporation must file its income tax return by  
the 15th day of the 4th month after the end of its tax year.  
A new corporation filing a short-period return must  
generally file by the 15th day of the 4th month after the  
short period ends. A corporation that has dissolved must  
generally file by the 15th day of the 4th month after the  
date it dissolved.  
Other Insurance Companies  
Insurance companies, other than life insurance  
companies, should file Form 1120-PC, U.S. Property and  
Casualty Insurance Company Income Tax Return. A burial  
or funeral benefit insurance company that directly  
manufactures funeral supplies or performs funeral  
services is taxable under section 831 and should file Form  
1120-PC.  
However, a corporation with a fiscal tax year ending  
June 30 must file by the 15th day of the 3rd month after  
the end of its tax year. A corporation with a short tax year  
ending any time 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.  
Definitions  
An “insurance company” means any corporation if more  
than half of its business during the tax year is from the  
issuance of insurance or annuity contracts or the  
reinsuring of risks underwritten by insurance companies.  
If the due date falls on a Saturday, Sunday, or legal  
holiday, the corporation can file on the next business day.  
A “life insurance company” is an insurance company in  
the business of issuing life insurance and annuity  
contracts either separately or combined with health and  
accident insurance, or noncancelable contracts of health  
and accident insurance that meet the reserves test in  
section 816(a). Guaranteed renewable life, health, and  
accident insurance that the corporation cannot cancel but  
reserves the right to adjust premium rates by classes,  
according to experience under the kind of policy involved,  
are treated as noncancelable.  
Private Delivery Services  
Corporations can use certain private delivery services  
(PDSs) 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.  
The PDS can tell you how to get written proof of the  
mailing date.  
For the IRS mailing address to use if you're using a  
The “reserves test” requires that life insurance  
reserves, as defined in section 816(b), plus unearned  
premiums and unpaid losses (whether or not ascertained)  
on noncancelable life, health, or accident policies not  
included in life insurance reserves must make up more  
than 50% of total reserves as defined in section 816(c).  
When determining whether the reserves test has been  
met:  
1. Life insurance reserves and total reserves must  
each be reduced by an amount equal to the mean of the  
aggregates, at the beginning and end of the tax year, of  
the policy loans outstanding with respect to contracts for  
which life insurance reserves are maintained;  
2. Amounts set aside and held at interest to satisfy  
obligations under contracts that do not contain permanent  
guarantees with respect to life, accident, or health  
contingencies must not be included in either life insurance  
reserves (section 816(c)(1)) or other reserves required by  
law (section 816(c)(3)); and  
PDSs cannot deliver items to P.O. boxes. You  
must use the U.S. Postal Service to mail any item  
!
CAUTION  
to an IRS P.O. box address.  
Extension of Time To File  
File Form 7004, Application for Automatic Extension of  
Time To File Certain Business Income Tax, Information,  
and Other Returns, to request an extension of time to file.  
Generally, file Form 7004 by the regular due date of the  
return. See the Instructions for Form 7004.  
Who Must Sign  
The return must be signed and dated by:  
The president, vice-president, treasurer, assistant  
treasurer, chief accounting officer; or  
Any other corporate officer (such as tax officer)  
authorized to sign.  
If a return is filed on behalf of a corporation by a  
receiver, trustee, or assignee, the fiduciary must sign the  
return, instead of the corporate officer. Returns and forms  
signed by a receiver or trustee in bankruptcy on behalf of  
a corporation must be accompanied by a copy of the order  
or instructions of the court authorizing signing of the return  
or form.  
Paid Preparer Use Only section. If an employee of the  
corporation completes Form 1120-L, the paid preparer  
section should remain blank. Anyone who prepares Form  
1120-L but does not charge the corporation should not  
complete that section. Generally, anyone who is paid to  
prepare the return must sign it and complete the section.  
3. Deficiency reserves must not be included in either  
life insurance reserves or total reserves.  
Electronic Filing  
Corporations can generally electronically file (e-file) Form  
7004 (automatic extension of time to file) and Forms 940,  
941, and 944 (employment tax returns). If there is a  
balance due, the corporation can authorize an electronic  
funds withdrawal while e-filing. Form 1099 and other  
information returns can also be electronically filed. The  
option to e-file does not, however, apply to certain returns.  
For more information, go to IRS.gov/Filing. Click on the  
links for “Businesses & Self-Employed” and  
“Corporations.”  
The paid preparer must complete the required preparer  
information and:  
Instructions Form 1120-L (2023)  
3
                   
Where To File  
File the corporation's return at the applicable IRS address listed below.  
If the corporation's principal business, office, or agency is located in:  
Use the following address:  
Department of the Treasury  
Internal Revenue Service Center  
Ogden, UT 84201-0012  
The United States  
Internal Revenue Service Center  
P.O. Box 409101  
Ogden, UT 84409  
A foreign country or U.S. territory  
Sign the return in the space provided for the preparer's  
statement was used as the basis for computing taxable  
income, attach that annual statement to Form 1120-L.  
However, see Electronic filing next.  
signature,  
Include their Preparer Tax Identification Number (PTIN),  
and  
Electronic filing. If a domestic or foreign life insurance  
company files Form 1120-L electronically, don’t attach the  
annual statement or pro forma annual statement to the  
electronically filed return. However, if the full annual  
statement is not attached, you must provide a copy of the  
annual statement or pro forma annual statement to the  
IRS if requested and retain it with your other tax records  
for the period required by the regulations.  
Give a copy of the return to the taxpayer.  
Note. A paid preparer may sign original or amended  
returns by rubber stamp, mechanical device, or computer  
software program.  
Paid Preparer Authorization  
If the corporation wants to allow the IRS to discuss its  
2023 tax return with the paid preparer who signed it,  
check the “Yes” box in the signature area of the return.  
This authorization applies only to the individual whose  
signature appears in the “Paid Preparer Use Only” section  
of the return. It doesn’t apply to the firm, if any, shown in  
that section.  
Reconciliation. Corporations that do not file  
Schedule M-3 (Form 1120-L) with Form 1120-L must  
attach a statement that reconciles Form 1120-L with the  
annual statement used as the basis for computing taxable  
income reported on Form 1120-L. Also, see the Note  
under the instructions for Schedule F, later, for additional  
required reconciliations.  
If the “Yes” box is checked, the corporation is  
authorizing the IRS to call the paid preparer to answer any  
questions that may arise during the processing of its  
return. The corporation is also authorizing the paid  
preparer to:  
Assembling the Return  
To ensure that the corporation's tax return is correctly  
processed, attach all schedules and other forms after  
page 5 of Form 1120-L in the following order.  
1. Schedule N (Form 1120).  
2. Form 4626.  
3. Form 4136.  
4. Form 8978.  
5. Form 965-B.  
Give the IRS any information that is missing from the  
return;  
Call the IRS for information about the processing of the  
return or the status of any related refund or payment(s);  
and  
Respond to certain IRS notices about math errors,  
offsets, and return preparation.  
6. Form 8941.  
7. Form 3800.  
The corporation is not authorizing the paid preparer to  
receive any refund check, bind the corporation to anything  
(including any additional tax liability), or otherwise  
represent the corporation before the IRS.  
8. Additional schedules in alphabetical order.  
9. Additional forms in numerical order.  
10. Supporting statements and attachments.  
The authorization will automatically end no later than  
the due date (excluding extensions) for filing the  
corporation's 2024 tax return. If the corporation wants to  
expand the paid preparer's authorization or revoke the  
authorization before it ends, see Pub. 947, Practice Before  
the IRS and Power of Attorney.  
Complete every applicable entry space on Form  
1120-L. 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 on the  
printed forms. If there are supporting statements and  
attachments, arrange them in the same order as the  
schedules or forms they support and attach them last.  
Show the totals on the printed forms. Enter the  
Statements  
Annual statement. In general, every domestic or foreign  
life insurance company must attach a copy of the National  
Association of Insurance Commissioners (NAIC) annual  
statement filed with the state of domicile and used as the  
basis for computing taxable income. If a different annual  
corporation's name and employer identification number  
(EIN) on each supporting statement or attachment.  
4
Instructions Form 1120-L (2023)  
             
less than originally estimated, it may have to refigure its  
required installments. If earlier installments were  
underpaid, the corporation may owe a penalty. See  
Tax Payments  
Generally, the corporation must pay any tax due in full no  
later than the due date for filing its tax return (not including  
extensions). See the instructions for line 30. 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.  
If the corporation overpaid estimated tax, it may be able  
to get a quick refund by filing Form 4466, Corporation  
Application for Quick Refund of Overpayment of  
Estimated Tax. See the instructions for line 27c, later.  
See section 6655 and Pub. 542, Corporations, for more  
Electronic Deposit Requirement  
information on how to figure estimated taxes.  
Corporations must use electronic funds transfers 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).  
Estimated tax penalty. A corporation that does not  
make estimated tax payments when due may be subject  
to an underpayment penalty for the period of  
underpayment. Generally, a corporation is subject to the  
penalty if its tax liability is $500 or more and it did not  
timely pay at least the smaller of:  
If the corporation does not want to use EFTPS, it can  
arrange for its tax professional, financial institution, payroll  
service, or other trusted third party to make deposits on its  
behalf. Also, it can arrange for its financial institution to  
submit a same-day wire payment (discussed later) on its  
behalf. EFTPS is a free service provided by the  
Its tax liability for the current year, or  
Its prior year's tax.  
See section 6655 for details and exceptions, including  
special rules for large corporations.  
Department of the Treasury. Services provided by a tax  
professional, financial institution, payroll service, or other  
third party may have a fee.  
Use Form 2220, Underpayment of Estimated Tax by  
Corporations, to see if the corporation owes a penalty and  
to figure the amount of the penalty. If Form 2220 is  
completed, enter the penalty on line 29. See the  
instructions for line 29. 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 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. To make your EFTPS deposits on  
time, the corporation must submit the transaction by 8  
p.m. Eastern time the day before the date the deposit is  
due. If the corporation uses a third party to make deposits  
on its behalf, they may have different cutoff times.  
Interest and Penalties  
If the corporation receives a notice about penalties  
after it files its return, send the IRS an explanation  
!
CAUTION  
and we will determine if the corporation meets  
reasonable-cause criteria. Do not attach an explanation  
when the corporation's return is filed.  
Interest. Interest is charged on taxes paid late even if an  
extension of time to file is granted. Interest is also charged  
on penalties imposed for failure to file, negligence, fraud,  
substantial valuation misstatements, substantial  
Same-day wire payment option. If the corporation fails  
to submit a deposit transaction on EFTPS by 8 p.m.  
Eastern time the day before the date a deposit is due, it  
can still make the deposit on time by using the Federal Tax  
Collection Service (FTCS). To use the same-day wire  
payment method, the corporation will need to make  
arrangements with its financial institution ahead of time  
regarding availability, deadlines, and costs. Financial  
institutions may charge a fee for payments made this way.  
To learn more about making a same-day wire payment, go  
understatements of tax, and reportable transaction  
understatements from the due date (including extensions)  
to the date of payment. The interest charge is figured at a  
rate determined under section 6621.  
Late filing of return. A corporation that does not file its  
tax return by the due date, including extensions, may be  
penalized 5% of the unpaid tax for each month or part of a  
month the return is late, up to a maximum of 25% of the  
unpaid tax. The minimum penalty for a tax return required  
to be filed in 2024 that is over 60 days late is the smaller of  
the tax due or $485 (adjusted for inflation). The penalty  
will not be imposed if the corporation can show that the  
failure to file on time was due to reasonable cause. See  
Caution, earlier.  
Late payment of tax. A corporation that does not pay  
the tax when due may generally be penalized 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 corporation's  
payments of estimated tax.  
The corporation must make installment payments of  
estimated tax if it expects its total tax for the year (less  
applicable credits) to be $500 or more.  
The installments are due by the 15th day of the 4th, 6th,  
9th, and 12th months of the tax year. If any date falls on a  
Saturday, Sunday, or legal holiday, the installment is due  
on the next regular business day.  
The corporation must use electronic funds transfers to  
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  
make installment payments of estimated tax.  
If, after the corporation figures and deposits estimated  
tax, it finds that its tax liability for the year will be more or  
Instructions Form 1120-L (2023)  
5
           
or withheld, or these taxes are not paid. These taxes are  
generally reported on:  
Rounding Off to Whole Dollars  
The corporation may enter decimal points and cents when  
completing its return. However, the corporation should  
round off cents to whole dollars on its return, forms, and  
schedules to make completing its return easier. The  
corporation must either round off all amounts on its return  
to whole dollars, or use cents for all amounts. To round,  
drop amounts under 50 cents and increase amounts from  
50 to 99 cents to the next dollar. For example, $8.40  
rounds to $8 and $8.50 rounds to $9.  
Form 720, Quarterly Federal Excise Tax Return;  
Form 941, Employer's QUARTERLY Federal Tax  
Return;  
Form 944, Employer's ANNUAL Federal Tax Return; or  
Form 945, Annual Return of Withheld Federal Income  
Tax.  
The trust fund recovery penalty may be imposed on all  
persons who are determined by the IRS to be responsible  
for collecting, accounting for, or paying over these taxes,  
and who acted willfully in not doing so. The penalty is  
equal to the full amount of the unpaid trust fund tax. See  
the Instructions for Form 720; and Pub. 15 (Circular E),  
Employer's Tax Guide, for details, including the definition  
of responsible persons.  
If two or more amounts must be added to figure the  
amount to enter on a line, include cents when adding the  
amounts and round off only the total.  
Recordkeeping  
Keep the corporation's records for as long as they may be  
needed for the administration of any provision of the  
Internal Revenue Code. Usually, records that support an  
item of income, deduction, or credit on the return must be  
kept for 3 years from the date the return is due or filed,  
whichever is later. Keep records that verify the  
corporation's basis in property for as long as they are  
needed to figure the basis of the original or replacement  
property.  
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 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.  
The corporation should keep copies of all filed returns.  
They help in preparing future and amended returns and in  
the calculation of earnings and profits.  
Accounting Methods  
The return of a life insurance company must be filed using  
the accrual method of accounting or, to the extent  
permitted under regulations, a combination of the accrual  
method with any other method, except the cash receipts  
and disbursements method. In all cases, the method used  
must clearly show life insurance company taxable income  
(LICTI).  
Other Forms and Statements That  
May Be Required  
Reportable transaction disclosure statement.  
Disclose information for each reportable transaction in  
which the corporation participated. Form 8886,  
Reportable Transaction Disclosure Statement, must be  
filed for each tax year that the federal income tax liability  
of the corporation is affected by its participation in the  
transaction. The following are reportable transactions.  
Change in accounting method. Generally, the  
corporation must get IRS consent to change either an  
overall method of accounting or the accounting treatment  
of any material item for income tax purposes. To obtain  
consent, the corporation must generally file Form 3115,  
Application for Change in Accounting Method, during the  
tax year for which the change is requested. See the  
Instructions for Form 3115 and Pub. 538 for more  
information and exceptions. Also, see the Instructions for  
Form 3115 for procedures that may apply for obtaining  
automatic consent to change certain methods of  
accounting, non-automatic change procedures, and  
reduced Form 3115 filing requirements.  
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 corporation (or a related party)  
paid an advisor a fee of at least $250,000.  
3. Certain transactions for which the corporation (or a  
related party) has contractual protection against  
disallowance of the tax benefits.  
4. Certain transactions resulting in a loss of at least  
$10 million in any single year or $20 million in any  
combination of years.  
Accounting Period  
An insurance company must figure its taxable income on  
the basis of a tax year. A tax year is the annual accounting  
period an insurance company uses to keep its records  
and report its income and expenses.  
5. Any transaction identified by the IRS by notice,  
regulation, or other published guidance as a “transaction  
of interest.”  
As a general rule under section 843, the tax year for  
every insurance company is the calendar year. However, if  
an insurance company joins in the filing of a consolidated  
return, it may adopt the tax year of the common parent  
corporation even if that year is not a calendar year.  
For more information, see Regulations section  
1.6011-4. Also see the Instructions for Form 8886.  
Penalties. The corporation may have to pay a penalty if  
it is required to disclose a reportable transaction under  
section 6011 and fails to properly complete and file Form  
6
Instructions Form 1120-L (2023)  
               
8886. Penalties also apply under section 6707A if the  
corporation fails to file Form 8886 with its corporate return,  
fails to provide a copy of Form 8886 to the Office of Tax  
Shelter Analysis (OTSA), or files a form that fails to include  
all the information required (or includes incorrect  
information). Other penalties, such as an accuracy-related  
penalty under section 6662A, 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, Material Advisor  
Disclosure Statement, with the IRS. See the Instructions  
for Form 8918.  
be filed in accordance with Regulations section 1.362-4(d)  
(3).  
Form 8975, Country-by-Country Report. Certain U.S.  
persons that are the ultimate parent entity of a U.S.  
multinational enterprise group with annual revenue for the  
preceding reporting period of $850 million or more are  
required to file Form 8975. Form 8975 and Schedule A  
(Form 8975) must be filed with the income tax return of the  
ultimate parent entity of a U.S. multinational enterprise  
group for the tax year in or within which the reporting  
period covered by Form 8975 ends. For more information,  
see Form 8975, Schedule A (Form 8975), and the  
Instructions for Form 8975 and Schedule A (Form 8975).  
Additional forms and statements. See Pub. 542,  
Corporations, for a list of other forms and statements a  
corporation may need to file in addition to the forms and  
statements discussed throughout these instructions.  
Transfers to a corporation controlled by the transfer-  
or. Every significant transferor (as defined in Regulations  
section 1.351-3(d)(1)) that receives stock of a corporation  
in exchange for property in a nonrecognition event must  
include the statement required by Regulations section  
1.351-3(a) on or with the transferor's tax return for the tax  
year of the exchange. The transferee corporation must  
include the statement required by Regulations section  
1.351-3(b) on or with its return for the tax year of the  
exchange, unless all the required information is included  
in any statement(s) provided by a significant transferor  
that is attached to the same return for the same section  
351 exchange. If the transferor or transferee corporation is  
a controlled foreign corporation (CFC), each U.S.  
Specific Instructions  
Period Covered  
Section 843 requires all insurance companies to file on a  
calendar year basis, unless they join in the filing of a  
consolidated return. If a consolidated return is filed,  
indicate the period covered on the parent corporation's  
return.  
Name and Address  
Enter the corporation's true name (as set forth in the  
charter or other legal document creating it), address, and  
EIN on the appropriate lines. Enter the address of the  
corporation's principal office or place of business. Include  
the suite, room, or other unit number after the street  
address. If the post office does not deliver mail to the  
street address and the corporation has a P.O. box, show  
the box number instead.  
shareholder (within the meaning of section 951(b)) must  
include the required statement on or with its return.  
Distributions under section 355. Every corporation that  
makes a distribution of stock or securities of a controlled  
corporation, as described in section 355 (or so much of  
section 356 as it relates to section 355), must include the  
statement required by Regulations section 1.355-5(a) on  
or with its return for the year of the distribution. A  
significant distributee (as defined in Regulations section  
1.355-5(c)) that receives stock or securities of a controlled  
corporation must include the statement required by  
Regulations section 1.355-5(b) on or with its return for the  
year of receipt. If the distributing or distributee corporation  
is a CFC, each U.S. shareholder (within the meaning of  
section 951(b)) must include the statement on or with its  
return.  
Dual consolidated losses. If a domestic corporation  
incurs a dual consolidated loss (as defined in Regulations  
section 1.1503-2(c)(5)), the corporation (or consolidated  
group) may need to attach an elective relief agreement  
and/or an annual certification as provided in Regulations  
section 1.1503-2(g)(2).  
Note. Do not use the address of the registered agent for  
the state in which the corporation is incorporated. For  
example, if a business is incorporated in Delaware or  
Nevada and the corporation's principal office is located in  
Little Rock, Arkansas, the corporation should enter the  
Little Rock address.  
If the corporation receives its mail in care of a third  
party (such as an accountant or an attorney), enter on the  
street address line “C/O” followed by the third party's  
name and street address or P.O. box.  
If the corporation has a foreign address, include the city  
or town, state or province, country, and foreign postal  
code. Do not abbreviate the country name. Follow the  
country's practice for entering the name of the state or  
province and postal code.  
Election to reduce basis under section 362(e)(2)(C).  
If property is transferred to a corporation subject to section  
362(e)(2), the transferor and the transferee corporation  
may elect, under section 362(e)(2)(C), to reduce the  
transferor's basis in the stock received instead of reducing  
the transferee corporation's basis in the property  
Item A. Identifying Information  
Consolidated Return  
If an affiliated group of corporations includes one or more  
domestic life insurance companies taxed under section  
801, the common parent may elect to treat those life  
insurance companies as includible corporations. The life  
insurance companies must have been members of the  
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  
Instructions Form 1120-L (2023)  
7
         
group for the 5 tax years immediately preceding the tax  
year for which the election is made. See section 1504(c)  
(2) and Regulations section 1.1502-47(b)(12).  
requirement is satisfied by checking box 2 of item A on  
page 1.  
Show any setoffs required by paragraphs (e), (h), and  
(j) of Regulations section 1.1502-47.  
Report separately the nonlife consolidated taxable  
Note. The eligibility requirements (the tacking rule) for a  
life insurance company to join in the filing of a  
income or loss, determined under Regulations section  
1.1502-47(f), on a Form 1120 or 1120-PC (whether filed  
by the common parent or as an attachment to the  
consolidated return), for all nonlife members of the  
consolidated group.  
consolidated return with nonlife companies are covered in  
Regulations section 1.1502-47(b)(12)(v).  
Note. If an election under section 1504(c)(2) is in effect  
for an affiliated group for the tax year, all items of  
members of the group that are not life insurance  
companies must not be taken into account in figuring the  
tentative LICTI of members that are life insurance  
companies.  
Report separately the consolidated LICTI (as defined by  
Regulations section 1.1502-47(g)(1)), determined under  
Regulations section 1.1502-11, on a Form 1120-L  
(whether filed by the common parent or as an attachment  
to the consolidated return), for all life members of the  
consolidated group.  
Corporations filing a consolidated return must check  
box 1 of item A and attach Form 851, Affiliations  
Schedule, and other supporting statements to the return.  
Also, for the first year a subsidiary corporation is being  
included in a consolidated return, attach Form 1122,  
Authorization and Consent of Subsidiary Corporation To  
Be Included in a Consolidated Income Tax Return, to the  
parent's consolidated return. Attach a separate Form 1122  
for each new subsidiary being included in the  
Note. If a nonlife insurance company is a member of an  
affiliated group, file Form 1120-PC as an attachment to the  
consolidated return in addition to the supporting  
statements discussed earlier under Consolidated Return.  
Across the top of page 1 of Form 1120-PC, write  
“Supporting Statement to Consolidated Returns.”  
Schedule M-3 (Form 1120-L)  
consolidated return.  
A life insurance company with total assets  
File supporting statements for each corporation  
included in the consolidated return. Do not use Form  
1120-L as a substitute for the supporting statement. On  
the supporting statement, use columns to show the  
following, both before and after adjustments.  
(non-consolidated or consolidated for all companies  
included within a tax consolidation group) of $10 million or  
more on the last day of the tax year must file  
Schedule M-3 (Form 1120-L), Net Income (Loss)  
Reconciliation for U.S. Life Insurance Companies With  
Total Assets of $10 Million or More. A corporation filing  
Form 1120-L that is not required to file Schedule M-3 may  
voluntarily file Schedule M-3.  
1. Items of gross income and deductions.  
2. A computation of taxable income.  
3. Balance sheets as of the beginning and end of the  
If you are filing Schedule M-3 (Form 1120-L), check  
box 3, of item A, “Schedule M-3 (Form 1120-L) attached”  
at the top of page 1 of Form 1120-L. See the Instructions  
for Schedule M-3 (Form 1120-L) for more details.  
tax year.  
4. A reconciliation of income per books with income  
per return.  
5. A reconciliation of retained earnings.  
Note. If you do not file Schedule M-3 (Form 1120-L) with  
Form 1120-L, see Reconciliation under Statements,  
earlier.  
Enter on Form 1120-L the totals for each item of  
income, gain, loss, expense, or deduction, net of  
eliminating entries for intercompany transactions between  
corporations within the consolidated group. Attach  
consolidated balance sheets and a reconciliation of  
consolidated retained earnings.  
Item B. Employer Identification  
Number (EIN)  
Enter the corporation's EIN. If the corporation does not  
have an EIN, it must apply for one. An EIN can be applied  
for in one of the following ways.  
For more information on consolidated returns, see the  
regulations under section 1502.  
Online—Click on the Employer ID Numbers link at  
Life-Nonlife Consolidated Return  
If the corporation is the common parent of a life-nonlife  
consolidated group, check boxes 1 and 2 of item A.  
Filing requirements. The common parent of a  
life-nonlife consolidated group must satisfy the following  
filing requirements.  
IRS.gov/EIN. The EIN is issued immediately once the  
application information is validated.  
By faxing or mailing Form SS-4, Application for  
Employer Identification Number.  
Corporations located in the United States or U.S.  
territories can use the online application. Foreign  
!
File the applicable consolidated corporate income tax  
CAUTION  
corporations should call 1-267-941-1099 (not a  
return: a Form 1120-L, where the common parent is a life  
insurance company; a Form 1120-PC, where the common  
parent is an insurance company, other than a life  
insurance company; or a Form 1120, where the common  
parent is any other type of corporation.  
toll-free number) for more information on obtaining an EIN.  
See the Instructions for Form SS-4.  
EIN applied for, but not received. If the corporation has  
not received its EIN by the time the return is due, enter  
“Applied For” and the date the corporation applied in the  
space for the EIN. However, if the corporation is filing its  
Indicate clearly on the face of the return that the  
corporate tax return is a life-nonlife return. This  
8
Instructions Form 1120-L (2023)  
     
return electronically, an EIN is required at the time the  
return is filed. An exception applies to subsidiaries of  
corporations whose returns are filed with the parent's  
electronically filed consolidated Form 1120. These  
subsidiaries should enter “Applied For” in the space for the  
EIN on their returns. The subsidiaries' returns are  
identified under the parent corporation's EIN.  
Life Insurance Company Taxable  
Income  
Income  
Except as otherwise provided in the Internal Revenue  
Code, gross income includes all income from whatever  
source derived.  
Line 1. Enter gross premiums and other consideration  
received on insurance and annuity contracts less return  
premiums and premiums and other consideration paid for  
indemnity reinsurance.  
Gross premiums and other consideration includes  
advance premiums, deposits, fees, assessments,  
consideration received for assuming liabilities under  
contracts not issued by the corporation, and any amount  
treated as premiums received under section 808(e).  
Return premiums include amounts rebated or refunded  
due to policy cancellations or incorrectly computed  
premiums, but do not include amounts returned to  
policyholders when such amounts are not fixed in the  
contract but instead depend on the corporation's  
experience or the management's discretion.  
Line 3a. Decrease in reserves under section 807(f). If  
the amount of any item referred to in section 807(c)  
decreased as a result of a change in the basis used to  
determine that item, then enter the section 807(f)  
prescribed portion of the change that must be included in  
life insurance company gross income (LICGI).  
For more information, see the Instructions for Form  
SS-4.  
Item D. Section 953 Elections  
Check the appropriate box if the corporation is a foreign  
corporation and elects under:  
1. Section 953(c)(3)(C) to treat its related person  
insurance income as effectively connected with the  
conduct of a trade or business in the United States, or  
2. Section 953(d) to be treated as a domestic  
corporation.  
Generally, a foreign corporation making either election  
must file its return by sending it to:  
Internal Revenue Service Center  
P.O. Box 409101  
Ogden, UT 84409  
See Notice 87-50, 1987-2 C.B. 357; and Rev. Proc.  
2003-47, 2003-28 I.R.B. 55, for the procedural rules,  
election statement formats, and filing addresses for  
making the respective elections under section 953(c)(3)  
(C) or section 953(d).  
Note. If a corporation no longer qualifies as a life  
insurance company, the balance of any adjustments under  
section 807(f) must be taken into account in the last tax  
year the corporation is qualified to file Form 1120-L. See  
section 807(f)(2).  
Line 3b. Income from Reserve Transition Relief. If  
section 807(d) (as amended by P.L. 115-97) decreased  
the amount of the reserve for any contract as of the close  
of the tax year preceding the first tax year beginning after  
2017, enter the portion of the change that must be  
included in LICGI as prescribed by section 13517(c)(3) of  
P.L. 115-97. See Rev. Proc. 2019-34, 2019-35 I.R.B. 669,  
for more information.  
Line 4. Investment income. Enter the amount from  
Schedule B, line 6, less 50% of interest income of an  
employee stock ownership plan (ESOP) loan made prior  
to August 20, 1996. Also, see section 1602 of P.L.  
104-188 for binding contracts and refinancing rules.  
Line 5. Capital gain net income. Unless specifically  
excluded by section 1221, each asset held by a  
corporation (whether or not connected with its business) is  
a "capital asset."  
Note. Once either election is made, it will apply to the tax  
year for which it was made and all subsequent tax years  
unless revoked with the consent of the IRS. Also, any loss  
of a foreign corporation electing to be treated as a  
domestic insurance company under section 953(d) will be  
treated as a dual-consolidated loss and may not be used  
to reduce the taxable income of any other member of the  
affiliated group for the tax year or any other tax year.  
Note. If a section 953(d) election is made, include the  
additional tax required to be paid on line 11 of  
Schedule K. On the dotted line to the left of line 11 of  
Schedule K, write “Section 953(d)” and the amount.  
Attach a statement showing the computation. See section  
953(d) for more details.  
Item E. Final Return, Name Change,  
Address Change, or Amended Return  
Indicate if this is a final return, name change, address  
change, or amended return by checking the appropriate  
box.  
Note. If a change of 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.  
Under section 1221, capital asset does not include the  
following.  
1. Assets that can be inventoried or property held  
mainly for sale to customers.  
2. Depreciable or real property used in the trade or  
business.  
Instructions Form 1120-L (2023)  
9
         
3. Certain copyrights; or literary, musical, or artistic  
compositions.  
4. Accounts or notes receivable acquired in the  
ordinary course of trade or business for services rendered  
or from the sale of property described in (1) above.  
meaning of section 367(a)(3)(C), as in effect before its  
repeal) to a foreign corporation with respect to which you  
were a U.S. shareholder immediately after the transfer as  
other income. Under section 91(d), transferred loss  
amounts recognized are treated as derived from sources  
within the United States.  
5. Certain publications of the U.S. Government.  
Part or all of the proceeds received from certain  
corporate-owned life insurance contracts issued after  
August 17, 2006. Corporations that own one or more  
employer-owned life insurance contracts issued after  
August 17, 2006, must file Form 8925, Report of  
Employer-Owned Life Insurance Contracts. See Form  
8925.  
Section 818(b) modifies the above definition so only  
property used in carrying on an insurance business will be  
considered as “depreciable or real property used in the  
corporation's trade or business.” For life insurance  
companies, gains or losses from the sale or exchange of  
depreciable assets of any business other than an  
insurance business will be treated as gains or losses from  
the sale or exchange of capital assets.  
Income from cancellation of debt (COD) for the  
repurchase of a debt instrument for less than its adjusted  
issue price.  
See section 818(c) and the related regulations for how  
to limit the gain from the sale or exchange of any section  
818(c) property.  
The corporation's share of the following income from  
Form 8621, Information Return by a Shareholder of a  
Passive Foreign Investment Company or Qualified  
Electing Fund.  
Note. Form 8949, Sales and Other Dispositions of Capital  
Assets, must be attached to Schedule D (Form 1120), as  
required.  
See Form 8621 and the Instructions for Form 8621 for  
details.  
1. Ordinary earnings of a qualified electing fund  
(QEF).  
Line 7. Other income. Enter any other taxable income,  
includible in LICGI, not reported on lines 1 through 6. List  
the type and amount of income on an attached statement.  
If the life insurance company has only one item of other  
income, describe it in parentheses on line 7. The following  
are examples of other income to report on line 7.  
2. Gain or loss from marking passive foreign  
investment company (PFIC) stock to market.  
3. Gain or loss from sale or other disposition of section  
1296 stock.  
Gains and losses (including ordinary gains and losses)  
4. Excess distributions from a section 1291 fund  
from sales or exchanges of assets used in a trade or  
business and from involuntary conversions reported on  
Form 4797, Sales of Business Property. Section 818(b)(1)  
provides that, for section 1231(a), “property used in a  
trade or business” includes only the following.  
1. Property used in carrying on an insurance business  
that is either real or depreciable property held for more  
than 1 year.  
allocated to the current year and pre-PFIC years, if any.  
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 leave and qualified paid family  
leave under the FFCRA and the ARP (both the  
nonrefundable and refundable portions). The corporation  
must include the full amount of the credit for qualified sick  
and family leave wages in gross income for the tax year  
that includes the last day of any calendar quarter in which  
the credit is allowed.  
2. Timber, coal, and domestic iron ore to which section  
631 applies.  
For (1) above, property used in a trade or business  
does not include property includible in inventory; property  
held primarily for sale to customers; or certain copyrights,  
literary, musical, or artistic compositions, letters,  
memoranda, and similar property.  
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.  
Any amount includible in income from Form 6478,  
Biofuel Producer Credit, if applicable.  
Deductions  
Any amount includible in income from Form 8864,  
Biodiesel, Renewable Diesel, or Sustainable Aviation  
Fuels Credit.  
Limitations on Deductions  
Ordinary income from trade or business activities of a  
Section 263A uniform capitalization rules. The  
uniform capitalization rules of section 263A require  
corporations to capitalize certain costs.  
A small business taxpayer is not required to capitalize  
costs under section 263A. A small business taxpayer that  
wants to discontinue capitalizing costs under section  
263A must change its method of accounting. See section  
263A(i) and Regulations section 1.263A-1(j). Also, see  
partnership from Schedule K-1 (Form 1065), Partner's  
Share of Income, Deductions, Credits, etc. Do not offset  
ordinary losses against ordinary income. Instead, include  
the losses on line 18. 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.  
Section 91 Transferred Loss Amount. Enter the  
transferred loss amount and identify the amount as  
“Section 91 Transferred Loss Amount” required to be  
recognized under section 91 resulting from a transfer of  
substantially all the assets of a foreign branch (within the  
For more information on the uniform capitalization rules,  
see Pub. 538. Also, see Regulations sections 1.263A-1  
through 1.263A-3.  
10  
Instructions Form 1120-L (2023)  
   
need to reduce the otherwise allowable deductions for  
expenses used to figure the credit. This applies to credits  
such as the following.  
Transactions between related taxpayers. Generally,  
an accrual basis taxpayer can only deduct business  
expenses and interest owed to a related party in the year  
the payment is included in the income of the related party.  
See sections 163(e)(3) and 267 for limitations on  
deductions for unpaid interest and expenses.  
Limitations on business interest expense. Business  
interest expense may be limited. See section 163(j) and  
Form 8990, Limitation on Business Interest Expense  
Under Section 163(j). Also, see the instructions for  
line 15a and Schedule M, Question 17, later.  
Employment credits. See Employment credits, later.  
Credit for increasing research activities (Form 6765).  
Orphan drug credit (Form 8820).  
Disabled access credit (Form 8826).  
Employer credit for social security and Medicare taxes  
paid on certain employee tips (Form 8846).  
Credit for small employer pension plan start-up costs  
(Form 8881).  
Credit for employer-provided childcare facilities and  
Section 291 limitations. Corporations may be required  
to adjust certain deductions. See section 291 to determine  
the amount of the adjustment.  
services (Form 8882).  
Credit for small employer health insurance premiums  
(Form 8941).  
Golden parachute payments. A portion of the  
payments made by a corporation to key personnel that  
exceeds their usual compensation may not be deductible.  
This occurs when the corporation has an agreement  
(golden parachute) with these key employees to pay them  
these excess amounts if control of the corporation  
changes. See section 280G and Regulations section  
1.280G-1.  
If the corporation has any of these credits, figure the  
current year credit before figuring the deduction for  
expenses on which the credit is based. If the corporation  
capitalized any costs on which it figured the credit, it may  
need to reduce the amount capitalized by the credit  
attributable to these costs.  
See the instructions for the form used to figure the  
applicable credit for more information.  
Business start-up and organizational costs. A  
corporation can elect to deduct a limited amount of  
start-up and organizational costs it paid or incurred. Any  
remaining costs must generally be amortized over a  
180-month period. See sections 195 and 248 and the  
related regulations.  
Time for making the election. The corporation  
generally elects to deduct start-up or organizational costs  
by claiming the deduction on its income tax return filed by  
the due date (including extensions) for the tax year in  
which the active trade or business begins.  
Limitations on deductions related to property leased  
to tax-exempt entities. If a corporation leases property  
to a governmental or other tax-exempt entity, the  
corporation cannot claim deductions related to the  
property to the extent that they exceed the corporation's  
income from the lease payments. This disallowed  
tax-exempt use loss can be carried over to the next tax  
year and treated as a deduction with respect to the  
property for that tax year. See section 470(d) for more  
details and exceptions.  
Line 9. Death benefits, etc. Enter all claims and benefits  
accrued and losses incurred (whether or not ascertained)  
during the year on insurance and annuity contracts.  
For more details, see the Instructions for Form 4562,  
Depreciation and Amortization.  
If the corporation timely filed its return for the year  
without making an election, it can still make an election by  
filing an amended return within 6 months of the due date  
of the return (excluding extensions). Clearly indicate the  
election on the amended return and write “Filed pursuant  
to section 301.9100-2” at the top of the amended return.  
File the amended return at the same address the  
corporation filed its original return. The election applies  
when figuring taxable income for the current tax year and  
all subsequent years.  
The corporation can choose to forgo the elections  
above by affirmatively electing to capitalize its start-up or  
organizational costs on its income tax return filed by the  
due date (including extensions) for the tax year in which  
the active trade or business begins.  
Losses incurred (whether or not ascertained) include a  
reasonable estimate of both losses incurred but not  
reported and of reported losses, when the amount of the  
losses cannot be determined by the end of the tax year.  
Losses incurred must be adjusted to take into account  
recoveries (for example, for reinsurance) for those losses  
together with estimates of those recoveries that may be  
recovered on those losses in future years.  
Under section 807(c), the amount of unpaid  
losses (other than losses on life insurance  
TIP  
contracts) must be the amount of the discounted  
unpaid losses under section 846. See the instructions for  
Schedule F, line 2, for more information on the discounting  
provisions.  
Line 11a. Increase in reserves under section 807(f).  
If the amount of any item referred to in section 807(c)  
increased as a result of a change in the basis used to  
determine that item, then enter the section 807(f)  
prescribed portion of the change that is a deduction in  
computing LICTI.  
Note. The election to either amortize or capitalize start-up  
costs is irrevocable and applies to all start-up costs that  
are related to the trade or business.  
Report the deductible amount of start-up and  
organizational costs and any amortization on line 18. For  
amortization that begins during the current year, complete  
and attach Form 4562.  
Note. If a corporation ceases to qualify as a life insurance  
company, the balance of any adjustments under section  
807(f) must be taken into account in the last year that the  
Reducing certain expenses for which credits are al-  
lowable. If the corporation claims certain credits, it may  
Instructions Form 1120-L (2023)  
11  
         
corporation is qualified to file Form 1120-L. See section  
807(f)(2).  
next year. See the Instructions for Form 8990. Also see  
Schedule M, Question 17, later.  
Consolidated groups. The limitation in section 163(j)  
(1) on the amount allowed as a deduction for business  
interest applies at the level of the consolidated group.  
Line 11b. Deduction from Reserve Transition Relief. If  
section 807(d) (as amended by P.L. 115-97) increased the  
amount of the reserve for any contract as of the close of  
the tax year preceding the first tax year beginning after  
2017, enter the portion of the change that is a deduction in  
computing LICTI as prescribed by section 13517(c)(3) of  
P.L. 115-97. See Rev. Proc. 2019-34, 2019-35 I.R.B. 669,  
for more information.  
Line 12. Deductible policyholder dividends. A  
policyholder dividend is any dividend or similar distribution  
to policyholders in their capacity as such and includes any  
amount paid or credited (including an increase in benefits)  
where the amount is not fixed in the contract but depends  
on the corporation’s experience or management’s  
discretion. Enter on line 12 the amount of policyholder  
dividends paid or credited during the tax year. Also, under  
section 808(e), any policyholder dividend that (a)  
increases either the cash surrender value of the contract  
or other benefits payable under the contract, or (b)  
reduces the premium otherwise required to be paid, is  
treated as paid to and returned by the policyholder to the  
company as a premium. Include these amounts in income  
on page 1, line 1.  
Line 15b. Less tax-exempt interest expense. Enter  
interest paid or accrued on indebtedness incurred or  
continued to purchase or carry obligations, the interest on  
which is wholly tax exempt. See section 265(b) for special  
rules and exceptions for financial institutions. Also see  
section 265(b)(7) for a de minimis exception for financial  
institutions for certain tax-exempt bonds issued in 2009  
and 2010.  
Line 18. Other deductions. Attach a statement, listing  
by type and amount, all allowable deductions in  
computing LICTI (including the amortization of premiums  
under section 811(b)) not included on lines 9 through 16.  
Examples of other deductions may include the  
following.  
Certain business start-up and organizational costs  
(discuss earlier under Limitations on Deductions).  
Legal and professional fees.  
Supplies used and consumed in the business.  
Travel, meals, and entertainment expenses. Special  
rules apply (discussed later).  
Utilities.  
Line 13. Assumption by another person of liabilities  
under insurance, etc., contracts. Enter the total  
consideration paid by the corporation to another person  
(other than for indemnity reinsurance) for the assumption  
by that person of liabilities under insurance and annuity  
contracts (including supplementary contracts).  
Ordinary losses from trade or business activities of a  
partnership from Schedule K-1 (Form 1065). Do not offset  
ordinary income against ordinary losses. Instead, include  
the income on line 7. Show the partnership's name,  
address, and EIN on a separate statement attached to this  
return. If the amount is from more than one partnership,  
identify the amount from each partnership.  
Line 14. Dividends reimbursable by taxpayer. Enter  
the amount of policyholder dividends:  
Any extraterritorial income exclusion (from Form 8873,  
1. Paid or accrued by another insurance company for  
Extraterritorial Income Exclusion).  
policies this corporation has reinsured, and  
Any applicable deduction under section 179D for the  
cost of energy efficient commercial building property  
placed in service during the tax year. Complete and attach  
Form 7205.  
2. That are reimbursable by the corporation under the  
terms of the reinsurance contract.  
Line 15a. Interest. Enter all interest paid or accrued  
during the tax year. No deduction is allowed under section  
163 for interest on the items described in section 807(c).  
Also, do not include interest included on Schedule G,  
line 9 (General deductions).  
Limitations. The deduction for interest is limited when  
the corporation is a policyholder or beneficiary with  
respect to a life insurance, endowment, or annuity  
contract issued after June 8, 1997. For details, see  
section 264(f). Attach a statement showing the  
computation of the deduction.  
Business interest expense is any interest paid or  
accrued on indebtedness properly allocable to a trade or  
business. 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 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  
expense the corporation can deduct for the current tax  
year and the amount that can be carried forward to the  
Dividends paid in cash on stock held by an ESOP.  
However, a deduction can only be taken for the dividends  
above if, according to the plan, the dividends are:  
1. Paid in cash directly to the plan participants or  
beneficiaries;  
2. Paid to the plan, which distributes them in cash to  
the plan participants or their beneficiaries no later than 90  
days after the end of the plan year in which the dividends  
are paid;  
3. At the election of such participants or their  
beneficiaries (a) payable as provided under (1) or (2)  
above, or (b) paid to the plan and reinvested in qualifying  
employer securities; or  
4. Used to make payments on a loan described in  
section 404(a)(9).  
See section 404(k) for more details and the limitation on  
certain dividends.  
Depreciation or amortization (attach Form 4562, if  
required). Attach Form T (Timber), Forest Activities  
Schedule, if a deduction for depletion of timber is taken.  
Foreign intangible drilling costs and foreign exploration  
12  
Instructions Form 1120-L (2023)  
     
and development costs must either be added to the  
corporation's basis for cost depletion purposes or be  
deducted ratably over a 10-year period. See sections  
263(i), 616, and 617.  
For details, see section 162(m) and Regulations  
section 1.162-27. Also, see Notice 2007-49, 2007-25  
I.R.B. 1429.  
Salaries and wages. Include 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, elective  
contributions to a section 401(k) cash or deferred  
arrangement, or amounts contributed under a salary  
reduction SEP agreement or a SIMPLE IRA plan.  
If the corporation provided taxable fringe benefits to its  
employees, such as personal use of a car, do not deduct  
as wages the amount allocated for depreciation and other  
expenses claimed under Other Deductions on line 18.  
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.  
Lobbying expenses. However, see exceptions  
(discussed later).  
Also, include on line 18 the following.  
Compensation of officers. Enter deductible officers'  
compensation. See Employment credits, later, for a list of  
employment credits that may reduce your deduction for  
officers' compensation. Do not include compensation  
deductible elsewhere on the return, such as 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.  
Include only the deductible part of each officer's  
compensation on line 18. (See Disallowance of deduction  
Attach a statement for compensation of all officers using  
the following columns.  
If the corporation claims a credit for any wages  
paid or incurred, it may need to reduce any  
!
CAUTION  
corresponding deduction for officers’  
compensation and salaries and wages. See Reducing  
Also, reduce the amounts deducted as  
compensation of officers and salaries and wages  
!
CAUTION  
by the nonrefundable and refundable portions of  
the CARES Act and the ARP employee retention credit  
claimed on the corporation’s employment tax return(s).  
1. Name of officer.  
2. Social security number.  
3. Percentage of time devoted to business.  
4. Amount of compensation.  
Limitation on tax benefits for remuneration under the  
Patient Protection and Affordable Care Act. The $1  
million compensation limit is reduced to $500,000 for  
remuneration for services provided by individuals for or on  
behalf of certain health insurance providers in tax years  
beginning after December 31, 2009. The $500,000  
limitation applies to remuneration that is deductible in the  
tax year during which the services were performed and  
remuneration for services during the year that is  
deductible in a future tax year (called deferred deduction  
remuneration). The $500,000 limitation is reduced by any  
amounts disallowed as excess parachute payments. See  
section 162(m)(6) and Regulations section 1.162-31 for  
definitions and other special rules. Also, see Notice  
2011-2, 2011-2 I.R.B. 260.  
If a consolidated return is filed, each member of an  
affiliated group must furnish this information.  
Disallowance of deduction for employee compensa-  
tion in excess of $1 million. Publicly held corporations  
cannot deduct compensation to a covered employee to  
the extent that the compensation exceeds $1 million.  
Generally, a covered employee is:  
The principal executive officer of the corporation (or an  
individual acting in that capacity) as of the end of the tax  
year, or  
Employment credits. If the corporation claims a credit  
on any of the forms listed below, it may need to reduce its  
deduction for salaries and wages. See the applicable  
form(s).  
An employee whose total compensation must be  
reported to shareholders under the Securities Exchange  
Act of 1934 because the employee is among the three  
highest compensated officers for that tax year (other than  
the principal executive officer).  
Form 5884, Work Opportunity Credit.  
Form 8844, Empowerment Zone Employment Credit, if  
For this purpose, compensation does not include the  
applicable.  
following.  
Form 8882, Credit for Employer-Provided Childcare  
Income from certain employee trusts, annuity plans, or  
Facilities and Services.  
Form 8932, Credit for Employer Differential Wage  
pensions.  
Any benefit paid to an employee that is excluded from  
Payments.  
the employee's income.  
Form 8994, Employer Credit for Paid Family and  
The deduction limit does not apply to:  
Medical Leave.  
Commissions based on individual performance;  
Qualified performance-based compensation; and  
Income payable under a written binding contract in  
Pension, profit-sharing, etc., plans. Enter the  
deduction for contributions to qualified pension,  
profit-sharing, or other funded deferred compensation  
plans. Employers who maintain such a plan must  
generally file one of the forms listed below unless exempt  
from filing under regulations or other applicable guidance,  
even if the plan is not a qualified plan under the Internal  
Revenue Code. The filing requirement applies even if the  
corporation does not claim a deduction for the current tax  
effect on February 17, 1993.  
The $1 million limit is reduced by amounts disallowed  
as excess parachute payments under section 280G.  
Instructions Form 1120-L (2023)  
13  
     
year. There are penalties for failure to file these forms on  
time and for overstating the pension plan deduction. See  
sections 6652(e) and 6662(f). Also, see the instructions  
for the applicable form.  
Contributions of $250 or more. A corporation can  
deduct a contribution of $250 or more only if it gets a  
written acknowledgment from the donee organization that  
shows the amount of cash contributed, describes any  
property contributed, and either gives a description and a  
good faith estimate of the value of any goods or services  
provided in return for the contribution or states that no  
goods or services were provided in return for the  
contribution. The acknowledgment must be obtained by  
the due date (including extensions) of the corporation's  
return, or, if earlier, the date the return is filed. Do not  
attach the acknowledgment to the tax return, but keep it  
with the corporation's records.  
Contributions of property other than cash. If a  
corporation contributes property other than cash and  
claims over a $500 deduction for the property, it must  
generally attach a statement to the return describing the  
kind of property contributed and the method used to  
determine its fair market value (FMV). Attach Form 8283,  
Noncash Charitable Contributions, to the return 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.  
Form 5500, Annual Return Report of Employee Benefit  
Plan.  
Form 5500-SF, Short Form Annual Return/Report of  
Small Employee Benefit Plan, instead of Form 5500,  
generally if under 100 participants at the beginning of the  
plan year.  
Note. Form 5500 and Form 5500-SF must be filed  
electronically under the computerized ERISA Filing  
Acceptance System (EFAST2). For more information, see  
the EFAST2 website at www.EFAST.dol.gov.  
Form 5500-EZ, Annual Return of A One-Participant  
(Owners/Partners and Their Spouses) Retirement Plan or  
A Foreign Plan. File this form for a plan that only covers  
the owner (or the owner and their spouse) but only if the  
owner (or the owner and their spouse) owns the entire  
business.  
Charitable contributions. Enter contributions or gifts  
actually paid within the tax year to or for the use of  
charitable and governmental organizations described in  
section 170(c) and any unused contributions carried over  
from prior years. Special rules and limits apply to  
contributions to organizations conducting lobbying  
activities. See section 170(f)(9).  
Life insurance companies reporting LICTI on the  
accrual method can elect to treat as paid during the tax  
year any contributions paid by the due date for filing the  
corporations’s tax return (not including extensions), if the  
contributions were authorized by the board of directors  
during the tax year. Attach a declaration to the return  
stating that the resolution authorizing the contributions  
was adopted by the board of directors during the tax year.  
The declaration must include the date the resolution was  
adopted. See Regulations section 1.170A-11.  
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. For special rules applicable  
to certain qualified conservation contributions made by  
Native corporations, see section 170(b)(2)(C).  
Other special rules. See section 170 for special rules,  
limitations, and requirements.  
Travel, meals, and entertainment. Subject to limitations  
and restrictions discussed below, a corporation can  
deduct ordinary and necessary travel, meal, and  
nonentertainment expenses paid or incurred in its trade or  
business. Generally, entertainment expenses,  
Limitation on deduction. The total amount claimed  
cannot be more than 10% of LICTI computed without  
regard to the following.  
membership dues, and facilities used in connection with  
these activities cannot be deducted. In addition, no  
deduction is generally allowed for qualified transportation  
fringe benefits. Special rules apply to deductions for gifts,  
luxury water travel, and convention expenses. See section  
274 and Pub. 463, Travel, Gift, and Car Expenses.  
Travel. The corporation cannot deduct travel expenses  
of any individual accompanying a corporate officer or  
employee, including a spouse or dependent of the officer  
or employee, unless:  
Any deduction for contributions.  
The deduction for policyholder dividends.  
The deduction for dividends received.  
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).  
Carryover. Charitable contributions over the 10%  
limitation (or the 25% limitation, if elected; see below)  
cannot be deducted for the tax year but may be carried  
over to the next 5 tax years.  
That individual is an employee of the corporation, and  
Their travel is for a bona fide business purpose and  
would otherwise be deductible by that individual.  
Meals. Generally, the corporation can deduct only 50%  
of the amount otherwise allowable for  
A contributions carryover is not allowed, however, to the  
extent that it increases an NOL.  
non-entertainment-related meal expenses paid or incurred  
in its trade or business.  
Cash contributions. For contributions of cash, check, or  
other monetary gifts (regardless of the amount), the  
corporation must maintain a bank record, or a receipt,  
letter, or other written communication from the donee  
organization indicating the name of the organization, the  
date of the contribution, and the amount of the  
contribution.  
Meals not separately stated from entertainment are  
generally not deductible. In addition (subject to exceptions  
under section 274(k)(2)):  
Meals must not be lavish or extravagant, and  
An employee of the corporation must be present at the  
meal.  
14  
Instructions Form 1120-L (2023)  
   
See section 274(n)(3) for a special rule that applies to  
expenses for meals consumed by individuals subject to  
the hours of service limits of the Department of  
Transportation.  
Qualified transportation fringes (QTFs). Generally,  
no deduction is allowed under section 274(a)(4) for QTFs  
provided by employers to their employees. QTFs are  
defined in section 132(f)(1) and include:  
reimbursement to the government for the costs of any  
investigation or litigation are not eligible for the exceptions  
and are nondeductible. See section 162(f).  
Lobbying expenses. Generally, lobbying expenses are  
not deductible. These expenses include:  
Amounts paid or incurred in connection with influencing  
federal, state, or local legislation (but not amounts paid or  
incurred before December 22, 2017, in connection with  
local legislation); or  
Transportation in a commuter highway vehicle between  
the employee's residence and place of employment,  
Amounts paid or incurred in connection with any  
Any transit pass, and  
Qualified parking.  
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.”  
See section 274 and Pub. 15-B, Employer’s Tax Guide  
to Fringe Benefits, for details.  
Membership dues. The corporation can deduct  
amounts paid or incurred for membership dues in civic or  
public service organizations, professional organizations  
(such as bar and medical associations), business  
leagues, trade associations, chambers of commerce,  
boards of trade, and real estate boards. However, no  
deduction is allowed if a principal purpose of the  
organization is to entertain or provide entertainment  
facilities for members or their guests. In addition,  
corporations cannot deduct membership dues in any club  
organized for business, pleasure, recreation, or other  
social purpose. This includes country clubs, golf and  
athletic clubs, airline and hotel clubs, and clubs operated  
to provide meals under conditions favorable to business  
discussion.  
Entertainment facilities. Generally, the corporation  
cannot deduct an expense paid or incurred for a facility  
(such as a yacht or hunting lodge) used for an activity  
usually considered entertainment, amusement, or  
recreation.  
Amounts treated as compensation. Generally, the  
corporation may be able to deduct otherwise  
nondeductible entertainment, amusement, or recreation  
expenses if the amounts are treated as compensation to  
the recipient and reported on Form W-2, Wage and Tax  
Statement, for an employee or on Form 1099-NEC,  
Nonemployee Compensation, for an independent  
contractor.  
Dues and other similar amounts paid to certain  
tax-exempt organizations may not be deductible. If certain  
in-house lobbying expenditures do not exceed $2,000,  
they are deductible.  
Line 21b. NOL deduction. The NOL deduction is the  
lesser of the aggregate of the NOL carryovers to the tax  
year, plus the NOL carrybacks to the tax year. If this  
deduction is taken, show its computation on an attached  
statement. Generally, a life insurance company can carry  
over an NOL to each tax year following the tax year of the  
loss. After applying the NOL to the first tax year to which it  
may be carried, the portion of the loss the corporation may  
carry to each of the remaining tax years is the excess, if  
any, of the loss over the sum used as an NOL deduction in  
the carryover year. See section 172 for special rules,  
limitations, and definitions pertaining to the NOL  
deduction and carryover.  
If an ownership change (described in section 382(g))  
occurs, the amount of the taxable income of a loss  
corporation that may be offset by the pre-change loss  
carryovers may be limited. (See section 382 and the  
related regulations.) A loss corporation must include the  
information statement as provided in Regulations section  
1.382-11(a), with its income tax return for each tax year  
that it is a loss corporation in which an ownership shift,  
equity structures shift, or other transaction described in  
Temporary Regulations section 1.382-2T(a)(2)(i) occurs. If  
the corporation makes the closing-of-the-books election,  
see Regulations section 1.382-6(b).  
The limitations under section 382 do not apply to  
certain ownership changes after February 17, 2009, made  
pursuant to a restructuring plan under the Emergency  
Economic Stabilization Act of 2008. See section 382(n).  
For guidance in applying section 382 to loss  
corporations whose instruments were acquired by the  
Department of the Treasury under certain programs under  
the Emergency Economic Stabilization Act of 2008, see  
Notice 2010-2, 2010-2 I.R.B. 251.  
For more details on the NOL deduction, see section  
172 and the Instructions for Form 1139, Corporation  
Application for Tentative Refund.  
Line 24. Phased inclusion of balance of policyhold-  
ers surplus account. Section 13514(d) of P.L. 115-97  
requires a one-eighth per year phased inclusion of any  
December 31, 2017, balance of the policyholders surplus  
account starting in 2018. This amount cannot be reduced  
by an NOL.  
However, if the recipient is an officer, a director, a  
beneficial owner (directly or indirectly), or other “specified  
individual” (as defined in section 274(e)(2)(B) and  
Regulations section 1.274-9(b)), special rules apply.  
Fines or similar penalties. Generally, no deduction is  
allowed for fines or similar penalties paid, or incurred to, or  
at the direction of, a government or governmental entity for  
violating any law, or for the investigation or inquiry into the  
potential violation of a law, except:  
Amounts that constitute restitution or remediation of  
property,  
Amounts paid to come into compliance with the law,  
Amounts paid or incurred as the result of certain court  
orders or agreements in which no government or specified  
nongovernmental agency is a party, and  
Amounts paid or incurred for taxes due.  
No deduction is allowed unless the amounts are  
specifically identified in the order or agreement and the  
corporation establishes that the amounts were paid for  
that purpose. Also, any amount paid or incurred as  
Instructions Form 1120-L (2023)  
15  
 
Backup withholding. If the corporation had federal  
income tax withheld from any payments it received  
because, for example, it failed to give the payer its correct  
EIN, include the amount withheld in the total for line 28.  
Write the amount withheld and the words “Backup  
Withholding” in the blank space above line 28.  
Line 29. Estimated tax penalty. Generally, the  
corporation does not have to file Form 2220 with its  
income tax return because the IRS will figure the amount  
of any penalty and notify the corporation of any amount  
due. However, see the Instructions for Form 2220 for  
circumstances where the corporation must file Form 2220  
even if it owes no penalty.  
Line 25. Total taxable income. The total taxable income  
reported on line 25 cannot be less than line 24 of the Form  
1120-L.  
Also, line 25 cannot be less than the largest of the  
following amounts.  
The inversion gain of the corporation for the tax year, if  
the corporation is an expatriated entity or a partner in an  
expatriated entity. For details, see section 7874.  
The sum of the corporation's excess inclusions from  
Schedule Q (Form 1066), line 2c, and the corporation's  
taxable income determined solely with respect to its  
ownership and high-yield interests in FASITs. For details,  
see sections 860E(a) and 860J (repealed).  
If Form 2220 is attached, check the box on line 29 and  
Tax and Payments  
enter the amount of any penalty on that line.  
Line 27b. Estimated tax payments. Enter any  
estimated tax payments the corporation made for the  
current tax year.  
If the corporation's tax liability includes a CAMT  
liability, the corporation must complete and attach  
!
CAUTION  
Form 2220. The affected corporation must also  
include an amount of estimated tax penalty on Form  
1120-L, line 29, even if that amount is zero. Failure to  
follow these instructions could result in the corporation  
receiving a penalty notice that will require an abatement  
request to apply any penalty relief. See Notice 2023-42.  
Line 27c. Current year's refund applied for on Form  
4466. If the corporation overpaid estimated tax, it may be  
able to get a quick refund by filing Form 4466. The  
overpayment must be at least 10% of the corporation's  
expected income tax liability and at least $500. File Form  
4466 after the end of the corporation's tax year, and no  
later than the due date for filing the corporation’s tax  
return. Form 4466 must be filed before the corporation  
files its tax return. See the instructions for Form 4466.  
Line 30. Amount owed. If the corporation cannot pay  
the full amount of tax owed, it can apply for an installment  
agreement online. Go to IRS.gov/OPA for the latest  
information.  
Line 32. Refunded electronic deposit of tax refund of  
$1 million or more. If the corporation is due a refund of  
$1 million or more and wants it electronically deposited  
into its checking or savings account at any U.S. bank or  
other financial institution instead of having a check sent to  
the corporation, complete Form 8302, Electronic Deposit  
of Tax Refund of $1 Million or More, and attach it to the  
corporation's tax return.  
Line 27d. Combine lines 27a through 27c.  
Line 27f. 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 corporation's share of the tax paid by a regulated  
investment company (RIC) or a real estate investment  
trust (REIT) on undistributed long-term capital gains  
included in the corporation's income. Attach Form 2439 to  
Form 1120-L.  
Schedule A—Dividends, Inclusions,  
Dividends-Received Deduction, and  
Other Special Deductions  
Line 27g. Credit for federal tax on fuels. Enter the total  
income tax credit claimed on Form 4136, Credit for  
Federal Tax Paid on Fuels. Attach Form 4136 to Form  
1120-L.  
Line 27h. U.S. income tax paid or withheld at source.  
Enter the amount of any U.S. income tax paid or withheld  
as reported on Form 1042-S, Foreign Person's U.S.  
Source Income Subject to Withholding.  
Line 27i. Elective payment election amount from  
Form 3800. Enter the elective payment election amount  
from Form 3800, General Business Credit, Part III, line 6,  
column (i). See the Instructions for Form 3800.  
Line 27z. Other credits and payments. Include on  
line 27z any other refundable credit or payment the  
corporation is claiming. Attach a statement listing the type  
of credit and the amount of the credit or payment.  
Credit for tax on ozone-depleting chemicals.  
Include on line 27z any credit the corporation is claiming  
under section 4682(g)(2) for tax on ozone-depleting  
chemicals.  
For purposes of the 20% ownership test on lines 1 through  
7, the percentage of stock owned by the corporation is  
based on voting power and value of the stock. Preferred  
stock described in section 1504(a)(4) is not taken into  
account.  
Consolidated returns. Corporations filing a  
consolidated return should see Regulations sections  
1.1502-13, 1.1502-26, and 1.1502-27 before completing  
Schedule A.  
Corporations filing a consolidated return must not  
report as dividends on Schedule A any amounts received  
from corporations within the tax consolidation group. Such  
dividends are eliminated in consolidation rather than offset  
by the dividends-received deduction.  
Line 1, column (a). Enter dividends (except those  
received on certain debt-financed stock acquired after  
July 18, 1984 (see section 246A)) that are:  
Line 28. Total payments and credits. Combine the  
amounts on lines 27d through 27z and enter the total on  
line 28.  
Received from less-than-20%-owned domestic  
corporations subject to income tax, and  
16  
Instructions Form 1120-L (2023)  
                   
Qualified for the 50% deduction under section 243(a)  
is subject to income tax and is allowed the deduction  
provided in section 247 (as affected by P.L. 113-295, Div.  
A, section 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043)  
for dividends paid.  
(1).  
Also include on line 1 the following.  
Taxable distributions from an interest charge domestic  
international sales corporation (IC-DISC) or former  
domestic interational sales corporation (DISC) that are  
designated as eligible for the 50% deduction and certain  
dividends of Federal Home Loan Banks. See section  
246(a)(2).  
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  
Dividends (except those received on certain  
qualify for the 50% deduction, the corporation must own at  
least 10% of the stock of the foreign corporation by vote  
and value.  
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 corporation should receive a notice  
from the RIC specifying the amount of dividends that  
qualify for the deduction.  
Also include dividends received from a  
less-than-20%-owned foreign sales corporation (FSC)  
that:  
Are attributable to income treated as effectively  
Report so-called dividends or earnings received from  
mutual savings banks, etc., as interest. Do not treat them  
as dividends.  
connected with the conduct of a trade or business within  
the United States (excluding foreign trade income), and  
Qualify for the 50% deduction under section 245(c)(1)  
(B).  
Line 2, column (a). Enter on line 2:  
Dividends (except those received on debt-financed  
Line 7, column (a). Enter the U.S.-source portion of  
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  
dividends that:  
Are received from 20%-or-more-owned foreign  
corporations, and  
Qualify for the 65% deduction under sections 245(a)  
Taxable distributions from an IC-DISC or former DISC  
and 243 by reference.  
that are considered eligible for the 65% deduction.  
Also include dividends received from a  
Line 3, column (a). Enter the following.  
20%-or-more-owned FSC that:  
Dividends received on certain debt-financed stock  
Are attributable to income treated as effectively  
acquired after July 18, 1984, from domestic and foreign  
corporations subject to income tax that would otherwise  
be subject to the dividends-received deduction under  
section 243(a)(1), 243(c), or 245(a). Generally,  
debt-financed stock is stock that the corporation acquired  
by incurring a debt (for example, it borrowed money to buy  
the stock).  
connected with the conduct of a trade or business within  
the United States (excluding foreign trade income), and  
Qualify for the 65% deduction under section 245(c)(1)  
(B).  
Line 8, column (a). Enter dividends received from wholly  
owned foreign subsidiaries that are eligible for the 100%  
deduction under section 245(b) but that do not qualify as  
“100% dividends” under section 805(a)(4)(C).  
Dividends received from a RIC on debt-financed stock.  
The amount of dividends eligible for the  
dividends-received deduction is limited by section 854(b).  
The corporation should receive a notice from the RIC  
specifying the amount of dividends that qualify for the  
deduction.  
In general, the deduction under section 245(b) applies  
to dividends paid out of the earnings and profits of a  
foreign corporation for a tax year during which:  
All of its outstanding stock is directly or indirectly owned  
by the domestic corporation receiving the dividends, and  
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 showing how the amount on line 3,  
column (c), was figured.  
Line 4, column (a). Enter dividends received on  
preferred stock of a less-than-20%-owned public utility  
that is subject to income tax and is allowed the deduction  
provided in section 247 (as affected by P.L. 113-295, Div.  
A, section 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043)  
for dividends paid.  
All of its gross income from all sources is effectively  
connected with the conduct of a trade or business within  
the United States.  
Do not include dividends received from a life insurance  
company.  
Also, include on line 8, 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 9, column (a). Enter only those dividends that  
qualify under section 243(b) for the 100%  
dividends-received deduction described in section 243(a)  
(3) but that do not qualify as “100% dividends” under  
section 805(a)(4)(C). Corporations taking this deduction  
are subject to the provisions of section 1561. Do not  
include dividends received from a life insurance company.  
Line 5, column (a). Enter dividends received on  
preferred stock of a 20%-or-more-owned public utility that  
Instructions Form 1120-L (2023)  
17  
 
The 100% deduction does not apply to affiliated group  
members that are joining in the filing of a consolidated  
return.  
Line 10, column (c). Limitation on dividends-received  
deduction. Generally, line 10 of column (c) cannot  
exceed the amount from the Worksheet for Schedule A,  
Line 10. 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 section 246(b).  
Line 17c, column (a). Enter all other amounts included  
in income under section 951, which should equal the U.S.  
shareholder's pro rata share of the sum of the amounts  
reported on Form(s) 5471, Schedule I, lines 1f, 2, 3, and 4.  
Line 18, column (a). Enter amounts included in income  
under the section 951A GILTI provision. See Form 8992,  
U.S. Shareholder Calculation of Global Intangible  
Low-Taxed Income (GILTI), Part II, line 5; and the  
Instructions for Form 8992. Also, consider the applicability  
of section 951A with respect to CFCs owned by domestic  
partnerships in which the filer has an interest. If you also  
have a Form 5471 reporting requirement, attach Form  
5471.  
Line 13, column (a). In general, enter “100% dividends”  
as defined in section 805(a)(4)(C). That is, in general,  
enter dividends that qualify for the 100%  
dividends-received deduction under sections 243, 244 (as  
affected by P.L. 113-295, Div. A, section 221(a)(41)(A),  
Dec. 19, 2014, 128 Stat. 4043), and 245(b), and were not  
reported on line 8 or 9 because they were (a) not  
distributed out of tax-exempt interest or out of dividends  
that do not qualify as 100% dividends, or (b) paid by a life  
insurance company.  
Line 19, column (a). Include the following.  
1. Include gross-up for taxes deemed paid under  
section 902 (for dividends paid in pre-2022 tax years of  
foreign corporations) and 960.  
2. 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.  
Note. Certain dividends received by a foreign corporation  
are not subject to proration. Attach a statement showing  
computations.  
3. Dividends from tax-exempt organizations.  
Line 14, column(a). Enter the foreign-source portion of  
4. 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.  
dividends:  
Received from specified 10%-owned foreign  
corporations (as defined in section 245A(b)), including  
gain from the sale of stock of a foreign corporation that is  
treated as a dividend under sections 1248(a) and (i); and  
5. Dividends not eligible for a dividends-received  
deduction, which include the following.  
Qualify for the 100% deduction under section 245A(a).  
a. Dividends received on any share of stock held for  
less than 46 days during the 91-day period beginning 45  
days before the ex-dividend date. When counting the  
number of days the corporation held the stock, you cannot  
count certain days during which the corporation's risk of  
loss was diminished. See section 246(c)(4) and  
Line 15, column (a). Enter foreign dividends not  
reportable on line 3, 6, 7, 8, or 14 of column (a).  
Include on line 15 any hybrid dividends from a CFC.  
Hybrid dividends are generally dividends received from a  
CFC that would otherwise be reported on line 14 except  
the CFC receives a deduction (or other tax benefit) with  
respect to any income, war profits, or excess profits taxes  
imposed by any foreign country or territory of the United  
States.  
Regulations section 1.246-5 for more details.  
b. Dividends attributable to periods totaling more than  
366 days that the corporation received on any share of  
preferred stock held for less than 91 days during the  
181-day period that began 90 days before the ex-dividend  
date. When counting the number of days the corporation  
held the stock, you cannot count certain days during  
which the corporation's risk of loss was diminished. See  
section 246(c)(4) and Regulations section 1.246-5 for  
more details. Preferred dividends attributable to periods  
totaling less than 367 days are subject to the 46-day  
holding period rule above.  
Also, include on line 15 the corporation’s share of  
distributions from a section 1291 fund from Form 8621, to  
the extent that the amounts are taxed as dividends under  
section 301. See Form 8621 and the Instructions for Form  
8621.  
Line 16, column (a). Reserved for future use.  
Line 16, column (c). Reserved for future use.  
Line 17a, 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 U.S.  
shareholder's pro rata share of the amount reported on  
Form(s) 5471, Information Return of U.S. Persons With  
Respect to Certain Foreign Corporations, Schedule I,  
line 1a.  
Line 17b, column (a). Enter the pro rata share of  
subpart F inclusions attributable to hybrid dividends of  
tiered corporations under section 245A(e)(2). This should  
equal the U.S. shareholder's pro rata share of the amount  
reported on Form(s) 5471, Schedule I, line 1b.  
c. Dividends on any share of stock to the extent the  
corporation is under an obligation (including a short sale)  
to make related payments with respect to positions in  
substantially similar or related property.  
6. Any other taxable dividend income not properly  
reported above.  
Line 21, column (c). Enter the section 250 deduction  
claimed for FDII and GILTI. This should equal the sum of  
line 8 and line 9 of Form 8993, Section 250 Deduction for  
Foreign-Derived Intangible Income (FDII) and Global  
Intangible Low-Taxed Income (GILTI), Part IV.  
18  
Instructions Form 1120-L (2023)  
 
Keep for Your Records  
Worksheet for Schedule A, Line 10  
1. Refigure Form 1120-L, page 1, line 8, without any adjustment under section 1059, and without any  
capital loss carryback to the tax year under section 1212(a)(1). Add this refigured line 8 amount to  
the amount on page 1, line 25. Subtract from that total the sum of page 1, lines 9 through 18 . . . . .  
2. Add lines 9, 13, 14, and 17a, column (c), and the portion of the deduction on line 8, column (c), that  
is attributable to dividends from FSCs that are attributable to foreign trade income . . . . . . . . . . . . . .  
3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
4. Multiply line 3 by 65% (0.65) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
5. Add lines 2, 5, and 7, column (c); the portion of the deduction on line 8, column (c), that is  
attributable to wholly owned foreign subsidiaries; and the portion of the deduction on line 3, column  
(c), that is attributable to dividends received from 20%-or-more-owned corporations . . . . . . . . . . . .  
6. Enter the smaller of line 4 or line 5. If line 5 is greater than line 4, stop here and enter the amount  
from line 6 on line 10, column (c), and do not complete the rest of the worksheet . . . . . . . . . . . . . . .  
7. Enter the total amount of dividends from 20%-or-more-owned corporations that are included on lines  
2, 3, 5, and 7, column (a), and the portion of the deduction on line 8, column (a), that is attributable  
to wholly owned subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
8. Subtract line 7 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
9. Multiply line 8 by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
10. Subtract line 5 above from line 10, column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
11. Enter the smaller of line 9 or line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
12. Dividends-received deduction after limitation (section 246(b)). Add lines 6 and 11. Enter the  
result here and on line 10, column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
and depreciation, should be reported as “Other  
deductions” on page 1, line 18.  
Line 4. Royalties. Enter the royalties received or accrued  
during the tax year. Report the depletion deduction on  
page 1, line 18.  
Line 5. Leases, terminations, etc. Enter the income  
received from entering into, altering, or terminating any  
lease, mortgage, or other instrument from which the  
corporation derives interest, rents, or royalties.  
Schedule B—Investment Income  
Line 1. Interest. Enter the total taxable interest received  
or accrued during the tax year, less any amortization of  
premium, plus any accrual of discount required by section  
811(b). Generally, the appropriate amortization of  
premium and accrual of discount for the tax year on  
bonds, notes, debentures, or other evidence of  
indebtedness held by a life insurance company should be  
determined:  
1. Under the method regularly employed by the  
Schedule F—Increase (Decrease) in  
Reserves (Section 807)  
company, if reasonable; and  
2. In all other cases, under the regulations.  
For bonds (as defined in section 171(d)) issued after  
September 27, 1985, the appropriate amount of  
amortization of premium must be determined using the  
yield to maturity method described in section 171(b)(3).  
Market discount is not required to be accrued under  
section 811(b). Attach a statement showing the method  
and computation used.  
Note. Attach a statement to the tax return that reconciles  
lines 1 through 6 of Schedule F to the annual statement  
used to prepare the tax return. If the annual statement  
used to prepare the tax return is different from the NAIC  
annual statement filed with the state of domicile, include a  
separate reconciliation of lines 1 through 6 of Schedule F  
to the annual statement filed with the state of domicile.  
Schedule F is used to determine if, under section 807,  
certain reserves decreased or increased for the tax year.  
A net decrease will be includible in gross income, while a  
net increase will be a deduction in computing LICTI.  
Note. The Small Business Job Protection Act of 1996  
repealed section 133, which provided for the 50% interest  
income exclusion with respect to ESOP loans. The Act  
also repealed section 812(g), which provided for the  
exclusion of interest income from ESOP loans for  
company/policyholder proration. The repeal of these  
exclusions is effective for ESOP loans made after August  
20, 1996. See Act section 1602 for special rules for  
binding contract agreements in effect prior to June 10,  
1996, and certain refinancings made after August 20,  
1996.  
The net increase or net decrease in reserves is figured  
by comparing the opening balance for reserves to the  
closing balance for reserves reduced by the policyholders'  
share of tax-exempt interest (and the increase in policy  
cash value of section 264(f) policies as defined in section  
805(a)(4)(F)).  
Reserve adjustments are not treated as interest  
expenses for allocation purposes under section 864(c).  
See section 818(f).  
Line 3. Rents. Enter the rents received or accrued during  
the tax year. Related expenses, such as repairs, taxes,  
Instructions Form 1120-L (2023)  
19  
       
There are special rules for computing reserves of  
unearned premiums of certain nonlife contracts. See  
section 807(e)(5)(A).  
For this item, the appropriate rate of interest is the  
highest rate or rates permitted to be used to discount the  
obligations by the NAIC as of the date the reserve is  
determined. In no case shall the amount determined  
under section 807(c)(3) for any contract be less than the  
net surrender value of such contract.  
Line 4. Dividend accumulations and other amounts.  
Enter the total dividend accumulations and other amounts  
held as interest in connection with insurance and annuity  
contracts.  
Note. If the basis for determining the amount of any item  
referred to in section 807(c) (life insurance reserves, etc.)  
at the end of the tax year differs from the basis for the  
determination at the beginning of the tax year, see section  
807(f).  
Line 1. Life insurance reserves. For rules on how to  
compute life insurance reserves, see sections 807(d) and  
(e).  
Line 2. Unearned premiums and unpaid losses. For  
purposes of sections 807 and 805(a)(1), the amount of the  
unpaid losses (other than losses on life insurance  
contracts) must be the amount of the discounted unpaid  
losses determined under section 846.  
Section 846 provides that the amount of the discounted  
unpaid losses must be figured separately by each line of  
business (multiple peril lines must be treated as a single  
line of business) and by each accident year and must be  
equal to the present value of those losses determined by  
using the:  
Line 5. Advance premiums. Enter the total premiums  
received in advance and liabilities for premium deposit  
funds. See section 807(e)(5)(A) for special rules for  
treatment of certain nonlife reserves.  
Line 6. Special contingency reserves. Enter the total  
reasonable special contingency reserves under contracts  
of group-term life insurance or group accident and health  
insurance, which are established and maintained for the  
provision of insurance on retired lives, premium  
stabilization, or for a combination thereof.  
Line 8. Increase (decrease) in reserves under section  
807. In figuring the amount on line 8, any decrease in  
reserves must be computed without any reduction of the  
closing balance of section 807 reserves by the  
1. Amount of the undiscounted unpaid losses,  
2. Applicable interest rate, and  
3. Applicable loss payment pattern.  
policyholders' share of tax-exempt interest.  
Line 11. Do not include the exempt portion of any of the  
interest income received on an ESOP loan made prior to  
August 21,1996. For binding contract and refinancing  
rules, see section 1602 of P.L. 104-188.  
Special rules apply to:  
Unpaid losses related to disability insurance (other than  
credit disability insurance),  
Noncancelable accident and health insurance, and  
Cancelable accident and health insurance.  
Schedule G—Policy Acquisition  
Expenses  
With regard to the special rules for discounting unpaid  
losses on accident and health insurance (other than  
disability income insurance), unpaid losses are assumed  
to be paid in the middle of the year following the accident  
year.  
For purposes of section 848(b), all life insurance company  
members of the same controlled group are treated as one  
company. Any deduction determined for the group must  
be allocated among the life insurance companies in the  
group in such a manner as the IRS may prescribe.  
Generally, the amount of undiscounted unpaid losses  
means the unpaid losses shown in the annual statement.  
The amount of discounted unpaid losses with respect to  
any line of business for an accident year cannot exceed  
the total amount of unpaid losses with respect to any line  
of business for an accident year as reported on the annual  
statement.  
The applicable interest rate for each calendar year and  
the applicable loss payment patterns for each accident  
year for each line of business are determined by the IRS.  
The applicable interest rate and loss payment patterns for  
2023 are published in Rev. Proc. 2023-41, 2023-52 I.R.B  
PROC-2023-41. Rev. Proc. 2023-41 also provides, for  
convenience, the discount factors for losses incurred in  
earlier accident years for use in tax years beginning in  
2023.  
Note. Policy acquisition expenses for an annuity or life  
insurance contract that includes a qualified long-term care  
insurance contract as part of, or as a rider on, the annuity  
or life insurance contract, must be capitalized using the  
net premium percentage for contracts that are not  
described in section 848(c)(1)(A) or 848(c)(1)(B). See  
section 848(e)(6) for more information.  
Line 1. Gross premiums and other consideration.  
Generally, gross premiums and other consideration is the  
total of:  
1. All premiums and other consideration (other than  
amounts on reinsurance agreements), and  
2. Net positive consideration for any reinsurance  
agreement (see Regulations section 1.848-2(b)).  
Line 3. Supplementary contracts. Enter the amount  
(discounted at the appropriate rate of interest) necessary  
to satisfy the obligations under insurance and annuity  
contracts, but only if the obligations do not involve (at the  
time the computation is made) life, accident, or health  
contingencies.  
Also include on this line:  
Advanced premiums;  
Amounts in a premium deposit fund or similar account,  
as permitted by Regulations section 1.848-2(b)(3);  
Fees;  
Assessments;  
20  
Instructions Form 1120-L (2023)  
     
Amounts that the insurance company charges itself  
Do not include on line 1 any interest due under section  
1291(c)(3). Instead, include the amount of interest owed  
on Schedule K, line 11.  
representing premiums with respect to benefits for its  
employees (including full-time insurance salesmen treated  
as employees under section 7701(a)(20)); and  
For more information on reporting the deferred tax and  
The value of a new contract issued in an exchange  
interest, see the Instructions for Form 8621.  
described in Regulations section 1.848-2(c)(2) or (3).  
Increase in tax attributable to partner's audit  
liability under section 6226. If the corporation is filing  
Form 8978 to report adjustments shown on Form 8986,  
Partner’s Share of Adjustment(s) to Partnership-Related  
Item(s), they received from partnerships which have been  
audited and have elected to push out imputed  
Line 2. Return premiums and premiums and other  
consideration incurred for reinsurance. For purposes  
of section 848(d)(1)(B) and Regulations section  
1.848-2(e), return premiums means amounts (other than  
policyholder dividends or claims and benefit payments)  
returned or credited to the policyholder. See Regulations  
sections 1.848-2(f) and 1.848-3 for how to treat amounts  
returned to another insurance company under a  
reinsurance agreement.  
underpayments to their partners, include any increase in  
taxes due from Form 8978, line 14, in the total for Form  
1120-L, Schedule K, 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 K, line 6.  
Additional tax under section 197(f). A corporation  
that elects to recognize gain and pay tax on the sale of a  
section 197 intangible under the related person exception  
to the anti-churning rules should include any additional tax  
due in the total for line 1. On the dotted line next to line 1,  
enter “Section 197” and the amount. See section 197(f)(9)  
(B)(ii).  
Line 4. Enter the applicable net premium percentage as  
defined in section 848(c)(1).  
Line 5. The entries in column 5(a), 5(b), or 5(c) may be  
positive or negative.  
Line 6. If the sum of columns 5(a), 5(b), and 5(c) is  
negative, enter this negative amount on line 6 and  
enter -0- on lines 7 and 8. The result is a negative  
capitalization amount under section 848(f).  
Line 2. Base erosion minimum tax amount. If the  
corporation had gross receipts of at least $500 million in  
any 1 of the 3 preceding tax years, see section 59A and  
the Instructions for Form 8991, Tax on Base Erosion  
Payments of Taxpayers With Substantial Gross Receipts,  
for further guidance on the determination of the amount of  
base erosion minimum tax.  
Line 3. Corporate alternative minimum tax. Enter on  
Schedule K, line 3, the amount from Form 4626,  
Alternative Minimum Tax—Corporations, Part II, line 13, if  
applicable. See the Instructions for Form 4626.  
Line 9. General deductions. These are deductions  
under sections 161 through 198, relating to itemized  
deductions, and sections 401 through 424, relating to  
pension, profit-sharing, stock bonus plans, etc. Also,  
include on this line ceding commissions incurred for the  
reinsurance of a specified insurance contract. Do not  
include amortization deductions of specified policy  
acquisition expenses under section 848(a) or (b). Skip  
line 9 if the corporation has elected out of the general  
deductions limitation. See Regulations section 1.848-2(g)  
(8).  
Line 5a. Foreign tax credit. To find out if a corporation  
can take this credit for payment of income tax to a foreign  
country or U.S. territory, see Form 1118, Foreign Tax  
Credit—Corporations.  
Line 5b. Credit from Form 8834. Enter any qualified  
electric vehicle passive activity credits from prior years  
allowed for the current 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.  
Line 5d. Credit for prior year minimum tax. Enter any  
allowable credit from Form 8827, Credit for Prior Year  
Minimum Tax—Corporations. Complete and attach Form  
8827.  
Line 5e. Bond credits from Form 8912. Enter the  
allowable credits from Form 8912, Credit to Holders of Tax  
Credit Bonds, line 12.  
Line 6. Total credits. Add lines 5a through 5e and enter  
the total on line 6.  
Decrease attributable to partner's audit liability  
under section 6226. If the corporation is filing Form  
8978 to report adjustments shown on Form 8986 they  
Note. If interest expense is included on line 9, do not also  
include it on page 1, line 15a.  
Line 13. Unamortized specified policy acquisition ex-  
penses from prior years. Enter the balance of  
unamortized specified policy acquisition expenses from  
prior years as of the beginning of the tax year. See section  
848(f)(1)(B).  
Line 16. Phase-out amount. The amount of  
amortization for members of a controlled group and the  
phase-out of the group's specified policy acquisition  
expenses under section 848(b) must be allocated to each  
member in proportion to that member's specified policy  
acquisition expenses for the tax year.  
Schedule K—Tax Computation  
Line 1. Corporations figure their tax by multiplying  
taxable income by 21% (0.21).  
Deferred tax under section 1291. If the corporation  
was a shareholder in a PFIC and received an excess  
distribution or disposed of its investment in the PFIC  
during the year, it must include the total increase in taxes  
due under section 1291(c)(2) (from Form 8621) in the total  
for line 1. On the dotted line to the left of line 1, enter  
“Section 1291” and the amount.  
Instructions Form 1120-L (2023)  
21  
             
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-L, Schedule K, 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 K, line 1.  
Line 8. Foreign corporations. A foreign corporation  
carrying on a life insurance business in the United States  
is taxed as a domestic life insurance company on its  
income effectively connected with the conduct of a trade  
or business in the United States (see sections 864(c) and  
897 for definition).  
Generally, any other U.S.-source income received by  
the foreign corporation is taxed at 30% (or at a lower treaty  
rate) under section 881. If the corporation has this income,  
attach a statement showing the kind and amount of  
income, the tax rate, and the amount of tax. Enter the tax  
on line 8. However, see Reduction of section 881 tax,  
later.  
Line 11. Other taxes. Include any of the following taxes  
and interest in the total on line 11. Attach a statement  
showing the computation of each item included in the total  
for line 11 and identify the applicable Code section and  
the type of tax or interest.  
Recapture of Indian employment credit. Generally, if an  
employer terminates the employment of a qualified  
employee less than 1 year after the date of initial  
employment, any Indian employment credit allowed for a  
prior tax year because of wages paid or incurred to that  
employee must be recaptured. For details, see Form 8845  
and section 45A.  
Recapture of new markets credit (see Form 8874, New  
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 certain nondealer  
installment obligations (section 453A(c)).  
Interest due on deferred gain (section 1260(b)).  
Interest due under section 1291(c)(3). See Form 8621  
and the Instructions for Form 8621.  
Note. Interest received from certain portfolio debt  
investments that were issued after July 18, 1984, is not  
subject to the tax. See section 881(c).  
Line 12. Total tax. Include any deferred tax on the  
termination of a section 1294 election applicable to  
shareholders in a QEF in the amount entered on line 12.  
Subtract any deferred tax on the corporation's share of  
undistributed earnings of a QEF (see Form 8621).  
How to report. Attach a statement showing the  
computation of each item included in, or subtracted from,  
the total for line 12. On the dotted line next to line 12,  
specify (a) the applicable Code section, (b) the type of tax,  
and (c) the amount of tax.  
See section 842 for more information.  
Minimum effectively connected net investment  
income. See section 842(b) and Notice 89-96, 1989-2  
C.B. 417, for the general rules for computing this amount.  
Also, see Rev. Proc. 2021-41, 2021-39 I.R.B. 443,  
available at IRS.gov/2021-39 IRB, for the domestic asset/  
liability percentages and domestic yields needed to  
compute this amount.  
Any additional income required by section 842(b) must  
be included in LICTI (for example, page 1, line 7).  
Reduction of section 881 tax. Additional taxes  
resulting from the net investment income adjustment may  
offset a corporation's section 881 tax on U.S.-source  
income. The tax reduction is determined by multiplying the  
section 881 tax by the ratio of the amount of income  
adjustment to income subject to the section 881 tax,  
computed without the exclusion for interest on state and  
local bonds or income exempted from taxation by treaty.  
See section 842(c)(1). Attach a statement showing how  
the reduction of section 881 tax was figured. Enter the net  
tax imposed by section 881 on line 8.  
Line 9. Recapture of investment credit. If the  
corporation disposed of investment credit property or  
changed its use before the end of the 5-year recapture  
period under section 50(a), enter the increase in tax from  
Form 4255, Recapture of Investment Credit. See  
Instructions for Form 4255.  
Line 10. Recapture of low-income housing credit. If  
the corporation disposed of property (or there was a  
reduction in the qualified basis of the property) for which it  
took the low-income housing credit and the corporation  
did not follow the procedures that would have prevented  
recapture of the credit, it may owe a tax. See Form 8611,  
Recapture of Low-Income Housing Credit. Complete and  
attach Form 8611.  
Schedule L  
All filers must complete Parts I and II of Schedule L.  
Note. Foreign life insurance companies should report  
assets and insurance liabilities for their U.S. business only.  
Part I—Total Assets  
For Schedule L, assets mean all assets of the corporation.  
In valuing real property and stocks, use FMV; for other  
assets, use the adjusted basis as determined under  
section 1011 and related sections, without regard to  
section 818(c). An interest in a partnership or trust is not  
itself treated as an asset of the corporation. Instead, the  
corporation is treated as actually owning its proportionate  
share of the assets held by the partnership or trust. The  
value of the corporation's share of these assets should be  
listed on line 3.  
Part II—Total Assets and Total Insurance  
Liabilities  
The information provided in Part II should conform  
with the “Assets” and “Liabilities, Surplus, and  
!
CAUTION  
Other Funds” sections of the NAIC annual  
statement.  
Foreign life insurance companies must maintain a  
minimum surplus of U.S. assets over their U.S. insurance  
liabilities. The minimum required surplus is determined by  
multiplying their U.S. insurance liabilities by a percentage  
22  
Instructions Form 1120-L (2023)  
         
determined by the IRS. The IRS determines the  
percentage from data supplied by domestic life insurance  
companies on Schedule L, Part II. See section 842.  
The constructive ownership rules of section 318 apply  
in determining if a corporation is foreign owned. See  
section 6038A(c)(5) and the related regulations.  
Enter on line 8a the percentage owned by the foreign  
person specified in question 8. On line 8b, write the name  
of the owner's country.  
For Schedule L, total insurance liabilities means the  
sum of the following amounts as of the end of the tax year.  
1. Total reserves as defined in section 816(c); plus  
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.  
2. The items referred to in paragraphs (3), (4), (5), and  
(6) of section 807(c), to the extent such amounts are not  
included in total reserves.  
Foreign life insurance companies, see Notice 89-96 for  
more information on determining total insurance liabilities  
on U.S. business.  
Foreign person. The term “foreign person” means:  
An individual who is not a citizen or resident of the  
United States;  
An individual who is a citizen or resident of a U.S.  
territory who is not otherwise a citizen or resident of the  
United States;  
Schedule M—Other Information  
Complete the items that apply to the corporation.  
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 6. Check the “Yes” box if:  
The corporation is a subsidiary in an affiliated group  
7701(a)(31); or  
(defined below) but is not filing a consolidated return for  
the tax year with that group, or  
A foreign government (or one of its agencies or  
instrumentalities) to the extent that it is engaged in the  
conduct of a commercial activity as described in section  
892.  
The corporation is a subsidiary in a parent-subsidiary  
controlled group. For a definition of a parent-subsidiary  
controlled group, see the Instructions for Schedule O  
(Form 1120).  
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 corporation  
checked “Yes” to question 8, it may have to file Form 5472.  
Generally, a 25% foreign-owned corporation that had a  
reportable transaction with a foreign or domestic related  
party during the tax year must file Form 5472. See the  
Instructions for Form 5472 for filing instructions and  
penalties for failure to file.  
Item 11. Enter the amount of the NOL carryover to the tax  
year from prior years, even if some of the loss is used to  
offset income on this return. The amount to enter is the  
total of all NOLs generated in prior years but not used to  
offset income (either as a carryback or carryover) in a tax  
year prior to 2023. Do not reduce the amount by any NOL  
deduction reported on page 1, line 21b.  
Any corporation that meets either of the requirements  
above should check the “Yes” box. This applies even if the  
corporation is a subsidiary member of one group and the  
parent corporation of another.  
Note. If the corporation is an “excluded member” of a  
controlled group (see definition in the Instructions for  
Schedule O (Form 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 (section 1504(a))  
connected through stock ownership with a common  
parent corporation. The common parent must be an  
includible corporation and the following requirements must  
be met.  
1. The common parent must own directly stock that  
represents at least 80% of the total voting power and at  
least 80% of the total value of the stock of at least one of  
the other includible corporations.  
2. Stock that represents at least 80% of the total voting  
power and at least 80% of the total value of the stock of  
each of the other corporations (except for the common  
parent) must be owned directly by one or more of the  
other includible corporations.  
Item 12. Complete item 12 to identify the state where the  
annual statement used to prepare the tax return was filed.  
Question 13. A corporation that files Form 1120-L must  
file Schedule UTP (Form 1120), Uncertain Tax Position  
Statement, with its 2022 income tax return if:  
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).  
Question 8. Check the “Yes” box if one foreign person  
owned at least 25% of the total voting power of all classes  
of stock of the corporation entitled to vote, or at least 25%  
of the total value of all classes of stock of the corporation.  
For 2023, the corporation's total assets equal or exceed  
$10 million;  
The corporation or a related party issued audited  
financial statements reporting all or a portion of a  
corporation's operations for all or a portion of the  
corporation's tax year; and  
The corporation has one or more tax positions that must  
be reported on Schedule UTP.  
Attach Schedule UTP to the corporation's income tax  
return. Do not file it separately. A taxpayer that files a  
Instructions Form 1120-L (2023)  
23  
           
protective Form 1120-L must also file Schedule UTP if it  
satisfies the requirements set forth above.  
current year, or prior year carryover, excess business  
interest expense allocated from the partnership.  
For details, see the Instructions for Schedule UTP.  
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 the following excepted trades or businesses.  
Question 14. If the corporation had gross receipts of at  
least $500 million in any 1 of the 3 preceding tax years,  
complete and attach Form 8991. For this purpose, the  
corporation's gross receipts include the gross receipts of  
all persons aggregated with the corporation as specified in  
section 59A(e)(3). See the Instructions for Form 8991 to  
determine if the corporation is subject to the base erosion  
minimum tax.  
An electing real property trade or business.  
An electing farming business.  
Certain utility businesses.  
Small business taxpayer. A small business taxpayer is  
not subject to the business interest expense limitation and  
is not required to file Form 8990. A small business  
taxpayer is a taxpayer that (a) is not a tax shelter (as  
defined in section 448(d)(3)), and (b) meets the gross  
receipts test of section 448(c), discussed next.  
Gross receipts test. For tax years beginning in 2023, a  
taxpayer meets the gross receipts test if the taxpayer has  
average annual gross receipts of $29 million or less for the  
3 prior tax years. A taxpayer's average annual gross  
receipts for the 3 prior tax years is determined by adding  
the gross receipts for the 3 prior tax years and dividing the  
total by 3. Gross receipts include the aggregate gross  
receipts from all persons treated as a single employer,  
such as a controlled group of corporations, commonly  
controlled partnerships, or proprietorships, and affiliated  
service groups. See section 448(c) and the Instructions  
for Form 8990 for additional information.  
Question 15. Section 267A disallows a deduction for  
certain interest and royalty payments or accruals. In  
general, section 267A applies when:  
1. The interest or royalty is paid or accrued to a related  
party;  
2. Under its tax laws, the related party either:  
a. Does not include the full amount in income, or  
b. Is allowed a deduction with respect to the amount;  
and  
3. The amount is paid or accrued pursuant to a hybrid  
transaction or by, or to, a hybrid entity.  
When section 267A applies, the deduction is generally  
disallowed to the extent the related party does not include  
the amount in income or is allowed a deduction with  
respect to the amount. However, the deduction is not  
disallowed to the extent the amount is included in the  
gross income of a U.S. shareholder under section 951(a).  
Member of controlled group, business under com-  
mon control, or affiliated group. For purposes of the  
gross receipts test, all members of a controlled group of  
corporations (as defined in section 52(a)) and all  
members of a group of businesses under common control  
(as defined in section 52(b)), are treated as a single  
person, and all employees of the members of an affiliated  
service group (as defined in sections 414(m) and (o)) shall  
be treated as employed by a single person. If required,  
attach Form 8990 to the corporation's income tax return.  
Do not file it separately. See Limitations under Line 15a,  
earlier.  
Question 18. If the corporation is a member of a  
controlled group, check the "Yes" box. Complete and  
attach Schedule O (Form 1120), Consent Plan and  
Apportionment Schedule for a Controlled Group.  
Component members of a controlled group must use  
Schedule O (Form 1120) to report the apportionment of  
certain tax benefits between the members of the group.  
See Schedule O (Form 1120) and the Instructions for  
Schedule O (Form 1120) for more information.  
For definitions of terms, see section 267A.  
Question 16. 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.  
Certain real property trades or businesses and farming  
businesses qualify to make an election not to limit  
business interest expense. This is an irrevocable election.  
If you make this election, you are required to use the  
alternative depreciation system to depreciate any  
nonresidential real property, residential rental property,  
and qualified improvement property for an electing real  
property trade or business, and any property with a  
recovery period of 10 years or more for an electing  
farming business. See section 168(g)(1)(F). Also, you are  
not entitled to the special depreciation allowance for that  
property. For a taxpayer with more than one qualifying  
business, the election is made with respect to each  
business.  
Check "Yes" if the corporation has an election in effect  
to exclude a real property trade or business or a farming  
business from section 163(j). For more information, see  
section 163(j) and the Instructions for Form 8990.  
Question 17. 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  
Question 19. Check the appropriate boxes to indicate if  
the corporation is required to file Form 4626. If the  
corporation does not meet the requirements of the safe  
harbor method, as provided under section 59(k)(3)(A) and  
Notice 2023-7, 2023-3 I.R.B. 390, available at IRS.gov/irb/  
2023-03_IRB#NOT-2023-7, for the current tax year, Form  
4626 must be completed and attached to the corporation’s  
return. See the Instructions for Form 4626.  
24  
Instructions Form 1120-L (2023)  
   
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returns and return information are confidential, as required by section 6103.  
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden  
for business taxpayers filing this form is approved under OMB control number 1545-0123 and is included in the estimates  
shown in the instructions for their business income tax return.  
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from you. You can send us comments from IRS.gov/FormComments. Or you can write to:  
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Do not send the tax form to this address. Instead, see Where To File, earlier.  
Instructions Form 1120-L (2023)  
25  
Index  
A
Foreign corporations 22  
Foreign person 23  
R
Foreign tax credit 21  
Accounting methods, change in 6  
Accounting period (tax year) 6  
Address change 9  
Recordkeeping 6  
Forms and publications, how to get 2  
Future Developments 1  
Return premiums 9  
S
Affiliated group 23  
G
Amended return 9  
Schedule:  
Amortization 11  
General business credit 21  
Annual Statement 4  
Golden parachute payments 11  
Assembling the return 4  
Gross premiums and other  
consideration 9  
B
I
Backup withholding 16  
L, Part I 22  
Interest due on late payment of tax 5  
Business start-up expenses 11  
L, Part II 22  
L
C
Schedule M-3 (Form 1120-L) 8  
Section 953 elections 9  
Life insurance company taxable  
Charitable contributions 14  
Consolidated return 7  
Controlled group:  
income 9  
Limitation on dividends-received  
T
deduction 18  
Member of 21  
Tax and payments:  
Limitations on deductions 10  
Losses incurred 11  
Parent-subsidiary 23  
Estimated tax payments 16  
Prior year(s) special estimated tax  
payments to be applied 16  
D
M
Taxpayer Advocate Service 2  
Deductions 10  
Minimum tax:  
Transactions between related  
Definitions:  
taxpayers 11  
Alternative minimum tax 21  
Prior year, credit for 21  
Insurance company 3  
Life insurance company 3  
Reserves test 3  
Travel, meals, and entertainment:  
Meals and entertainment 14  
Membership dues 14  
N
Depository methods of tax  
Travel 14  
Name change 9  
payment 5  
Disclosure statement 6  
W
O
What's New 1  
E
Operations loss deduction 15  
Other deductions 12  
Overpaid 16  
When to file 3  
Electronic deposit of tax refund of $1  
Where to file 4  
million or more 16  
Who must file 2  
Electronic Federal Tax Payment  
Owner's country 23  
Foreign Life Insurance Companies 2  
System (EFTPS) 5  
Mutual savings banks conducting life  
insurance business 2  
Electronic Filing 3  
P
Employer identification number  
Paid preparer authorization 4  
Penalties 5, 6, 16  
Other insurance companies 3  
Who must sign 3  
(EIN) 8  
Estimated tax payments 16  
Estimated tax penalty 5, 16  
Extension of time to file 3  
Pension, profit-sharing, etc. plans 13  
Period covered 7  
Worksheet for Schedule A 17  
Private delivery services 3  
F
Final return 9  
26