Instructions for Form 1120-C - Introductory Material Future Developments What’s New Increase in penalty for failure to file. Form 1120-W now historical. Payroll credit for COVID-related paid sick leave and family leave. Alternative minimum tax. Advanced manufacturing investment credit. Principal Business Activity Codes. Photographs of Missing Children The Taxpayer Advocate Service How To Make a Contribution To Reduce Debt Held by the Public How To Get Forms and Publications Internet. Tax forms and publications. General Instructions Purpose of Form Who Must File Exceptions. Where To File When To File Private Delivery Services Extension of Time To File Who Must Sign Paid Preparer Use Only section. Paid Preparer Authorization Assembling the Return Tax Payments Electronic Deposit Requirement Depositing on time. Same-day wire payment option. Estimated Tax Payments Estimated tax penalty. Interest and Penalties Interest. Late filing of return. Late payment of tax. Trust fund recovery penalty. Other penalties. Accounting Methods Small business taxpayer. Change in accounting method. Section 481(a) adjustment. Accounting Period Change of tax year. Rounding Off to Whole Dollars Recordkeeping Other Forms and Statements That May Be Required Reportable transaction disclosure statement. Penalties. Reportable transactions by material advisors. Transfers to a cooperative controlled by the transferor. Dual consolidated losses. Election to reduce basis under section 362(e)(2)(C). Other forms and statements. Specific Instructions Period Covered Name and Address Item A. Identifying Information Consolidated return. Schedule M-3 (Form 1120). Form 1120 filed previous year. Item B. Employer Identification Number (EIN) EIN applied for, but not received. Item C. Type of Cooperative Farmers' tax exempt cooperative. Nonexempt cooperative. Item D. Initial Return, Final Return, Name Change, Address Change, or Amended Return Income Exception for income from qualifying shipping activities. Line 1. Gross Receipts or Sales Advance payments. Installment sales. Nonaccrual experience method for service providers. Line 2. Cost of Goods Sold Line 4. Dividends and Inclusions Line 5. Interest Line 6. Gross Rents and Royalties Line 9. Other Income Patronage dividends and per-unit retain allocations. Other. Deductions Limitations on Deductions Section 263A uniform capitalization rules. Transactions between related taxpayers. Limitations on business interest expense. Section 291 limitations. Election to deduct business start-up and organizational costs. Time for making an election. Passive activity limitations. Closely held cooperatives. Reducing certain expenses for which credits are allowable. Limitations on deductions related to property leased to tax-exempt entities. Line 11. Compensation of Officers Line 12. Salaries and Wages Line 13. Bad Debts Line 14. Rents Line 15. Taxes and Licenses Line 16. Interest Limitation on deduction. Line 17. Charitable Contributions Limitation on deduction. Carryover. Suspension of 10% limitation for farmers and ranchers and certain Native Corporations. Cash contributions. Contributions of $250 or more. Contributions of property other than cash. Qualified conservation contributions. Other special rules. Line 18. Depreciation Line 20. Pension, Profit-Sharing, etc., Plans Form 5500. Form 5500-SF. Form 5500-EZ. Line 21. Employee Benefit Programs Line 22. Section 199A(g) Deduction Reporting the deduction. Line 23. Other Deductions Repairs and maintenance. Travel, meals, and entertainment. Travel. Meals. Qualified transportation fringes (QTFs). Membership dues. Entertainment facilities. Amounts treated as compensation. Lobbying expenses. Line 25a. Taxable Income Before Adjustments and Special Deductions At-risk rules. Line 25b. Deductions and Adjustments From Schedule H Line 25c. Taxable Income Before Net Operating Loss and Special Deductions Line 26a. Net Operating Loss Deduction Line 26b. Special Deductions Line 26c. Total NOL and Special Deductions Tax, Refundable Credits, and Payments Line 27. Taxable Income Minimum taxable income. Net operating loss (NOL). Merchant Marine capital construction fund. Line 29 Line 30a. 2021 Overpayment Credited to 2022 Line 30b. Estimated Tax Payments Beneficiaries of trusts. Line 30c. Overpaid Estimated Tax Line 30d. Net Tax Payments Line 30f Credit from Form 2439. Credit for federal tax on fuels. Credit for tax on ozone-depleting chemicals. Line 30g Line 30h. Section 1383 Adjustment Line 30j. Total Payments, Refundable Credits, and Section 1383 Adjustments Backup withholding. Line 31. Estimated Tax Penalty Line 32. Amount Owed Line 34. Refund Direct deposit of refund. Schedule C. Dividends, Inclusions, and Special Deductions Consolidated returns. Line 1, Column (a) Line 2, Column (a) Line 3, Column (a) Line 3, Columns (b) and (c) Line 4, Column (a) Line 5, Column (a) Line 6, Column (a) Line 7, Column (a) Line 8, Column (a) Line 9, Column (c) Line 10, Columns (a) and (c) Line 11, Columns (a) and (c) Line 12, Columns (a) and (c) Line 13, Column (a) Line 14, Column (a) Line 15 Line 16a, Column (a) Line 16b, Column (a) Line 16c, Column (a) Line 17, Column (a) Line 18, Column (a) Line 19, Column (a) Line 20, Column (a) Line 21, Column (c) Line 22, Column (c) Schedule G. Allocation of Patronage and Nonpatronage Income and Deductions Line 6 Line 8, Columns (a) and (b) Line 9a, Columns (a) and (b) Line 9b, Columns (a) and (b) Line 10, Columns (a) and (b) Line 11, Column (a) Line 12, Column (a) Line 13, Column (b) Schedule H. Deductions and Adjustments Under Section 1382 Line 1. Dividends Paid on Capital Stock (Section 521 Cooperatives Only) Line 2. Nonpatronage Income Allocated to Patrons (Section 521 Cooperatives Only) Nonpatronage income. Line 3. Patronage Dividends Line 3b. Qualified written notices of allocation. Line 3d. Nonqualified written notices of allocation. Line 4. Section 199A(g) deduction allocated to patrons. Schedule J. Tax Computation Line 1. Members of a Controlled Group Line 2. Income Tax Deferred tax under section 1291. Increase in tax attributable to partner's audit liability under section 6226. Line 3. Base Erosion Minimum Tax Line 5a. Foreign Tax Credit Line 5b. Qualified Electric Vehicle Credit Line 5c. General Business Credit Elective allocations to patrons of subchapter T cooperatives. Required allocations to patrons of subchapter T cooperatives. Line 5d. Credit for Prior Year Minimum Tax Line 5e. Bond Credits Line 6. Total Credits Decrease attributable to partner's audit liability under section 6226. Line 8. Other Taxes Recapture of investment credit. Recapture of low-income housing credit. Alternative tax on qualifying shipping activities. Other. Recapture of elective allocation of credit to patrons. Recapture of required excess credit allocated to patrons. Alternative minimum tax (AMT). Line 9. Total Tax How to report. Schedule K. Other Information Item 2 Question 5 Affiliated group. Item 7 Question 8 Foreign person. Owner's country. Requirement to file Form 5472. Item 10 Item 12 Item 13 Question 16 Question 17 Question 18 Exclusions from filing. Small business taxpayer. Gross receipts test. Schedule L. Balance Sheets per Books Line 1. Cash Line 5. Investments Line 26. Adjustments to Shareholders' Equity Schedule M-1. Reconciliation of Income (Loss) per Books With Income per Return Line 5c. Travel and Entertainment Line 7. Tax-exempt Interest Instructions for Form 1120-C - Notices Paperwork Reduction Act Notice. Instructions for Form 1120-C - Additional Material Form 1120-C Agriculture, Forestry, Fishing, and Hunting Crop Production Animal Production Forestry and Logging Fishing, Hunting, and Trapping Support Activities for Agriculture and Forestry Mining Utilities Construction Construction of Buildings Heavy and Civil Engineering Construction Specialty Trade Contractors Manufacturing Food Manufacturing Beverage and Tobacco Product Manufacturing Textile Mills and Textile Product Mills Apparel Manufacturing Leather and Allied Product Manufacturing Wood Product Manufacturing Paper Manufacturing Printing and Related Support Activities Petroleum and Coal Products Manufacturing Chemical Manufacturing Plastics and Rubber Products Manufacturing Nonmetallic Mineral Product Manufacturing Primary Metal Manufacturing Fabricated Metal Product Manufacturing Machinery Manufacturing Computer and Electronic Product Manufacturing Electrical Equipment, Appliance, and Component Manufacturing Transportation Equipment Manufacturing Furniture and Related Product Manufacturing Miscellaneous Manufacturing Wholesale Trade Merchant Wholesalers and Durable Goods Merchant Wholesalers and Nondurable Goods Wholesale Trade Agents & Brokers Retail Trade Motor Vehicle and Parts Dealers Furniture and Home Furnishings Retailers Electronics and Appliance Retailers Building Material and Garden Equipment and Supplies Dealers Food and Beverage Retailers Health and Personal Care Retailers Gasoline Stations & Fuel Dealers Clothing and Accessories Retailers Sporting, Hobby, Book, Musical Instrument & Miscellaneous Retailers General Merchandise Retailers Nonstore Retailers Transportation and Warehousing Air, Rail, and Water Transportation Truck Transportation Transit and Ground Passenger Transportation Pipeline Transportation Scenic & Sightseeing Transportation Support Activities for Transportation Couriers and Messengers Warehousing and Storage Information Publishing Industries Motion Picture and Sound Recording Industries Broadcasting, Content Providers, & Telecommunications Data Processing, Web Search Portals, & Other Information Services Finance and Insurance Depository Credit Intermediation Nondepository Credit Intermediation Activities Related to Credit Intermediation Securities, Commodity Contracts, and Other Financial Investments and Related Activities Insurance Carriers and Related Activities Funds, Trusts, and Other Financial Vehicles Real Estate, Rental, and Leasing Real Estate Rental and Leasing Services Lessors of Nonfinancial Intangible Assets (except copyrighted works) Professional, Scientific, and Technical Services Legal Services Accounting, Tax Preparation, Bookkeeping, and Payroll Services Architectural, Engineering, and Related Services Specialized Design Services Computer Systems Design and Related Services Other Professional, Scientific, and Technical Services Management of Companies (Holding Companies) Administrative and Support, Waste Management, and Remediation Services Administrative and Support Services Waste Management and Remediation Services Educational Services Health Care and Social Assistance Offices of Physicians and Dentists Offices of Other Health Practitioners Outpatient Care Centers Medical and Diagnostic Laboratories Home Health Care Services Other Ambulatory Health Care Services Hospitals Nursing and Residential Care Facilities Social Assistance Arts, Entertainment, and Recreation Performing Arts, Spectator Sports, and Related Industries Museums, Historical Sites, and Similar Institutions Amusement, Gambling, and Recreation Industries Accommodation and Food Services Accommodation Food Services and Drinking Places Other Services Repair and Maintenance Personal and Laundry Services Religious, Grantmaking, Civic, Professional, and Similar Organizations Other Instructions for Form 1120-C (2022) U.S. Income Tax Return for Cooperative Associations Section references are to the Internal Revenue Code unless otherwise noted. 2022 Instructions for Form 1120-C - Introductory Material Future Developments For the latest information about developments related to Form 1120-C and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form1120c. What’s New Increase in penalty for failure to file. For returns due in 2023, 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 $450. See Late filing of return , later. Form 1120-W now historical. Form 1120-W, Estimated Tax for Corporations, and the Instructions for Form 1120-W are now historical. The 2022 Form 1120-W (released in 2021) and the 2022 Instructions for Form 1120-W (released in 2021) will be the last revision of both the form and its instructions. Prior versions will be available on IRS.gov. Payroll credit for COVID-related paid sick leave and family leave. Generally, the credit for qualified sick and family leave wages, as enacted under the Families First Coronavirus Response Act (FFCRA), and amended by the COVID-related Tax Relief Act of 2020, and the credit for qualified sick and family leave wages, as enacted under the American Rescue Plan Act of 2021 (the ARP), have expired. However, employers that paid qualified sick and family leave wages in 2022 for leave taken after March 31, 2020, and before October 1, 2021, may be eligible to claim a credit for qualified sick and family leave wages in 2022. See the March 2022 revision of the Instructions for Form 941 and the 2022 Instructions for Form 944 for more information. There is no double tax benefit allowed and the amounts claimed are reportable as income. See Line 9. Other Income, later. Alternative minimum tax. For tax years beginning after December 31, 2022, the Inflation Reduction Act of 2022 (IRA) imposes a corporate alternative minimum tax (AMT). Applicable cooperatives (within the meaning of section 59(k)) may be required to pay this AMT. Short-period filers with a tax year beginning after December 31, 2022, and ending before December 31, 2023, see section 55 and the instructions for Schedule J, line 8 , later. Advanced manufacturing investment credit. An eligible cooperative that held a qualified investment in an advanced manufacturing facility placed in service after December 31, 2022, can elect to treat the credit for the advanced manufacturing investment as a deemed payment. If the election is made, the cooperative is treated as making a payment against tax by the amount of the credit. See section 48D. See the Instructions for Form 3468 for information on how to report the deemed credit on the cooperative's return. Principal Business Activity Codes. The list of principal business activities (PBA) codes has been updated. See Principal Business Activity Codes . Photographs of Missing Children The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. The Taxpayer Advocate Service The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. TAS's job is to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights. As a taxpayer, the cooperative has rights that the IRS must abide by in its dealings with the cooperative. TAS can help the cooperative if: Problems are causing financial difficulty for the business; The business is facing an immediate threat of adverse action; or The cooperative has tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. TAS has offices in every state, the District of Columbia, and Puerto Rico. The cooperative's local advocate's number is in its local directory and at TaxpayerAdvocate.IRS.gov. The cooperative can also call TAS at 877-777-4778. TAS also works to resolve large-scale or systemic problems that affect many taxpayers. If the cooperative knows of one of these broad issues, please report it to TAS through the Systemic Advocacy Management System at IRS.gov/SAMS. For more information, go to IRS.gov/Advocate. How To Make a Contribution To Reduce Debt Held by the Public To help reduce debt held by the public, make a check payable to “Bureau of the Fiscal Service.” Send it to: Bureau of the Fiscal Service Attn: Dept G P.O. Box 2188 Parkersburg, WV 26106-2188 Or, enclose the check with the corporation's income tax return. In the memo section of the check, make a note that it is a gift to reduce the debt held by the public. For information on how to make this type of contribution online, go to www.treasurydirect.gov and click on “How To Make a Contribution To Reduce the Debt.” Do not add the contributions to any tax the cooperative may owe. See the instructions for line 32 for details on how to pay any tax the cooperative owes. Contributions to reduce debt held by the public are deductible subject to the rules and limitations for charitable contributions. 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; Use the online Internal Revenue Code, regulations, or other official guidance; View Internal Revenue Bulletins (IRBs) published in the last few years; and Sign up to receive local and national tax news by email. Tax forms and publications. The cooperative can view, print, or download all of the forms and publications it may need on IRS.gov/FormsPubs. Otherwise, the cooperative can go to IRS.gov/OrderForms to place an order and have forms mailed to it. General Instructions Purpose of Form Use Form 1120-C, U.S. Income Tax Return for Cooperative Associations, to report income, gains, losses, deductions, credits, and to figure the income tax liability of the cooperative. Who Must File Any corporation operating on a cooperative basis under section 1381 and allocating amounts to patrons on the basis of business done with or for such patrons should file Form 1120-C (including farmers' cooperatives under section 521 whether or not it has taxable income). Exceptions. This does not apply to organizations which are: Exempt from income tax under chapter 1 (other than exempt farmers' cooperatives under section 521); Subject to Part II (section 591 and following), subchapter H, chapter 1 (relating to mutual savings banks); Subject to subchapter L (section 801 and following), chapter 1 (relating to insurance companies); or Engaged in generating, transmitting, or otherwise furnishing electric energy or providing telephone service to persons in rural areas. Where To File If the cooperative's principal business, office, or agency is located in the United States, file Form 1120-C at the following IRS center address: Department of the Treasury Internal Revenue Service Ogden, UT 84201-0012 If the cooperative's principal business, office, or agency is located in a foreign country or a U.S. possession, file Form 1120-C at the following IRS center address: Internal Revenue Service P.O. Box 409101 Ogden, UT 84409 When To File Generally, a cooperative described in section 6072(d) must file its income tax return by the 15th day of the 9th month after the end of its tax year. Any cooperative not described in section 6072(d) must generally file its tax return by the 15th day of the 4th month after the end of its tax year. However, a cooperative with a fiscal tax year ending June 30 must file by the 15th day of the 3rd month after the end of its tax year. A cooperative with a short tax year ending anytime in June will be treated as if the short year ended on June 30, and must file by the 15th day of the 3rd month after the end of its tax year. If the due date falls on a Saturday, Sunday, or legal holiday, the cooperative can file on the next business day. Private Delivery Services Cooperatives can use certain private delivery services (PDS) designated by the IRS to meet the “timely mailing as timely filing” rule for tax returns. Go to IRS.gov/PDS for the current list of designated services. 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 PDS, go to IRS.gov/PDSStreetAddresses. Private Delivery Services can't deliver items to P.O. boxes. You must use the U.S. Postal Service to mail any item to an IRS P.O. box address. Extension of Time To File File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, to request an extension of time to file. Generally, the cooperative must file Form 7004 by the regular due date of the return. See the Instructions for Form 7004. Who Must Sign The return must be signed and dated by: The president, vice president, treasurer, assistant treasurer, chief accounting officer; or Any other cooperative officer (such as tax officer) authorized to sign. If a return is filed on behalf of a cooperative by a receiver, trustee, or assignee, the fiduciary must sign the return, instead of the cooperative officer. Returns and forms signed by a receiver or trustee in bankruptcy on behalf of a cooperative must be accompanied by a copy of the order or instructions of the court authorizing signing of the return or form. Paid Preparer Use Only section. If an employee of the cooperative completes Form 1120-C, the paid preparer section should remain blank. Anyone who prepares Form 1120-C but does not charge the cooperative should not complete that section. Generally, anyone who is paid to prepare the return must sign and complete the section. The paid preparer must complete the required preparer information and: Sign the return in the space provided for the preparer's signature, Include their Preparer Tax Identification Number (PTIN), and Give a copy of the return to the taxpayer. A paid preparer may sign original or amended returns by rubber stamp, mechanical device, or computer software program. Paid Preparer Authorization If the cooperative wants to allow the IRS to discuss its 2022 tax return with the paid preparer who signed it, check the “Yes” box in the signature area of the return. This authorization applies only to the individual whose signature appears in the “Paid Preparer Use Only” section of the cooperative's return. It does not apply to the firm, if any, shown in that section. If the “Yes” box is checked, the cooperative is authorizing the IRS to call the paid preparer to answer any questions that may arise during the processing of its return. The cooperative is also authorizing the paid preparer to: 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. The cooperative is not authorizing the paid preparer to receive any refund check, bind the cooperative to anything (including any additional tax liability), or otherwise represent the cooperative before the IRS. The authorization will automatically end no later than the due date (excluding extensions) for filing the cooperative's 2023 tax return. If the cooperative wants to expand the paid preparer's authorization or revoke the authorization before it ends, see Pub. 947, Practice Before the IRS and Power of Attorney. Assembling the Return To ensure that the cooperative's tax return is correctly processed, attach all schedules and other forms after Form 1120-C, page 5, in the following order. Schedule N (Form 1120). Form 4136. Form 8978. Form 8941. Form 3800. Additional schedules in alphabetical order. Additional forms in numerical order. Supporting statements and attachments. Complete every applicable entry space on Form 1120-C. Do not enter “See Attached” or “Available Upon Request” instead of completing the entry spaces. If more space is needed on the forms or schedules, attach separate sheets using the same size and format as the printed forms. 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 cooperative's name and EIN on each supporting statement or attachment. Tax Payments Generally, the cooperative must pay any tax due in full no later than the due date for filing its return (not including extensions). If the due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next day that isn't a Saturday, Sunday, or legal holiday. See the instructions for line 32. Electronic Deposit Requirement Cooperatives must use electronic funds transfer to make all federal tax deposits (such as deposits of employment, excise, and corporate income tax). Generally, electronic funds transfers are made using the Electronic Federal Tax Payment System (EFTPS). However, if the cooperative does not want to use EFTPS, it can arrange for its tax professional, financial institution, payroll service, or other trusted third party to make deposits on its behalf. Also, it may arrange for its financial institution to submit a same-day wire payment (discussed below) on its behalf. EFTPS is a free service provided by the Department of the Treasury. Services provided by a tax professional, financial institution, payroll service, or other third party may have a fee. To get more information about EFTPS or to enroll in EFTPS, visit EFTPS.gov or call 800-555-4477. To contact EFTPS using the Telecommunications Relay Services (TRS), for people who are deaf, hard of hearing, or have a speech disability, dial 711 and provide the TRS assistant the 800-555-4477 number above or 800-733-4829. Depositing on time. For deposits made by EFTPS to be on time, the cooperative must submit the deposit by 8 p.m. Eastern time the day before the date the deposit is due. If the cooperative uses a third party to make deposits on its behalf, they may have different cutoff times. Same-day wire payment option. If the cooperative fails to submit a deposit transaction on EFTPS by 8 p.m. Eastern time the day before the date a deposit is due, it can still make the deposit on time by using the Federal Tax Collection Service (FTCS). To use the same-day wire payment method, the cooperative will need to make arrangements with its financial institution ahead of time regarding availability, deadlines, and costs. The cooperative's financial institution may charge a fee for payments made this way. To learn more about the information the cooperative will need to provide to its financial institution to make a same-day wire payment, go to IRS.gov/SameDayWire. Estimated Tax Payments Generally, the following rules apply to the cooperative's payments of estimated tax. The cooperative must make installment payments of estimated tax if it expects its total tax for the year (less applicable credits) to be $500 or more. The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any due date falls on a Saturday, Sunday, or legal holiday, the payment of the installment is due on the next regular business day. The cooperative must use electronic funds transfer to make installment payments of estimated tax. If, after the cooperative figures and deposits estimated tax, it finds that its tax liability for the year will be more or less than originally estimated, it may have to refigure its required installments. If earlier installments were underpaid, the cooperative may owe a penalty. See Estimated tax penalty below. If the cooperative overpaid estimated tax, it may be able to get a quick refund by filing Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax. See the instructions for lines 30b and 30c. See section 6655 for more information on how to figure estimated taxes. Estimated tax penalty. A cooperative that does not make estimated tax payments when due may be subject to an underpayment penalty for the period of underpayment. Generally, a cooperative is subject to the penalty if its tax liability is $500 or more and it did not timely pay at least the smaller of: Its tax liability for the current year, or Its prior year's tax. Use Form 2220, Underpayment of Estimated Tax by Corporations, to see if the cooperative owes a penalty and to figure the amount of the penalty. If Form 2220 is completed, enter the penalty on line 31. See the instructions for line 31. Interest and Penalties If the cooperative receives a notice about penalties after it files its return, send the IRS an explanation and we will determine if the cooperative meets reasonable cause criteria. Do not attach an explanation when the cooperative's return is filed. Interest. Interest is charged on taxes paid late even if an extension of time to file is granted. Interest is also charged on penalties imposed for failure to file, negligence, fraud, substantial valuation misstatements, substantial understatements of tax, and reportable transaction understatements from the due date (including extensions) to the date of payment. The interest charge is figured at a rate determined under section 6621. Late filing of return. A cooperative that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $450. The penalty will not be imposed if the cooperative can show that the failure to file on time was due to reasonable cause. See Caution, earlier. Late payment of tax. Generally, a cooperative that does not pay the tax when due may be penalized ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. See Caution, earlier. Trust fund recovery penalty. This penalty may apply if certain excise, income, social security, and Medicare taxes that must be collected or withheld are not collected or withheld, or these taxes are not paid. These taxes are generally reported on: Form 720, Quarterly Federal Excise Tax Return; Form 941, Employer's QUARTERLY Federal Tax Return; Form 943, Employer's Annual Federal Tax Return for Agricultural Employees; Form 944, Employer's ANNUAL Federal Tax Return; or Form 945, Annual Return of Withheld Federal Income Tax. The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to have been responsible for collecting, accounting for, or paying over these taxes, and who acted willfully in not doing so. The penalty is equal to the unpaid trust fund tax. See the Instructions for Form 720; Pub. 15 (Circular E), Employer's Tax Guide; or Pub. 51 (Circular A), Agricultural Employer's Tax Guide, for details, including the definition of responsible persons. Note. The trust fund recovery penalty will not apply to any amount of trust fund taxes an employer holds back in anticipation of the credit for qualified sick and family leave wages or the employee retention credit that they are entitled to. See Pub. 15 and Pub. 51 for more information. Other penalties. Other penalties can be imposed for negligence, substantial understatement of tax, reportable transaction understatements, and fraud. See sections 6662, 6662A, and 6663. Accounting Methods Figure taxable income using the method of accounting regularly used in keeping the cooperative's books and records. In all cases, the method used must clearly show taxable income. Permissible methods include: Cash, Accrual, or Any other method authorized by the Internal Revenue Code. Certain cooperatives must use an accrual method of accounting. An exception applies for a small business taxpayer (defined below). See Pub. 538, Accounting Periods and Methods, for more information. Small business taxpayer. For tax years beginning in 2022, a cooperative qualifies as a small business taxpayer if (a) it has average annual gross receipts of $27 million or less for the 3 prior tax years, and (b) it is not a tax shelter (as defined in section 448(d)(3)). A small business taxpayer can account for inventory by (a) treating the inventory as non-incidental materials and supplies, or (b) conforming to its treatment of inventory in an applicable financial statement (as defined in section 451(b)(3)). If it does not have an applicable financial statement, it can use the method of accounting used in its books and records prepared according to its accounting procedures. Change in accounting method. Generally, the cooperative must get IRS consent to change either an overall method of accounting or the accounting treatment of any material item for income tax purposes. To obtain consent, the cooperative must generally file Form 3115, Application for Change in Accounting Method, during the tax year for which the change is requested. See the Instructions for Form 3115 and Pub. 538 for more information and exceptions. Also see the Instructions for Form 3115 for procedures that may apply for obtaining automatic consent to change certain methods of accounting, non-automatic change procedures, and reduced Form 3115 filing requirements. Section 481(a) adjustment. If the cooperative's taxable income for the current tax year is figured under a method of accounting different from the method used in the preceding tax year, the cooperative may have to make an adjustment under section 481(a) to prevent amounts of income or expense from being duplicated or omitted. See section 481(d). Also, see the Instructions for Form 3115. If the net section 481(a) adjustment is positive, report the ratable portion on Form 1120-C, line 9, as other income. If the net section 481(a) adjustment is negative, report it on Form 1120-C, line 23, as a deduction. Accounting Period A cooperative must figure its taxable income on the basis of a tax year. A tax year is the annual accounting period a cooperative uses to keep its records and report its income and expenses. Generally, cooperatives can use a calendar year or a fiscal year. Change of tax year. Generally, a cooperative must get the consent of the IRS before changing its tax year by filing Form 1128, Application to Adopt, Change, or Retain a Tax Year. However, under certain conditions, exceptions may apply. See the Instructions for Form 1128 and Pub. 538 for more information. Rounding Off to Whole Dollars The cooperative may enter decimal points and cents when completing its return. However, the cooperative should round off cents to whole dollars on its return, forms, and schedules to make completing its return easier. The cooperative must either round off all amounts on its return to whole dollars, or use cents for all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $8.40 rounds to $8 and $8.50 rounds to $9. 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 cooperative's records for as long as they may be needed for the administration of any provision of the Internal Revenue Code. Usually, records that support an item of income, deduction, or credit on the return must be kept for 3 years from the date the return is due or filed, whichever is later. Keep records that verify the cooperative's basis in property for as long as they are needed to figure the basis of the original or replacement property. The cooperative should keep copies of all filed returns. They help in preparing future and amended returns and in the calculation of earnings and profits. Other Forms and Statements That May Be Required Reportable transaction disclosure statement. Disclose information for each reportable transaction in which the cooperative participated. Form 8886, Reportable Transaction Disclosure Statement, must be filed for each tax year that the federal income tax liability of the cooperative is affected by its participation in the transaction. The following are reportable transactions. Any listed transaction, which is a transaction that is the same as or substantially similar to one of the types of transactions that the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other published guidance as a listed transaction. Any transaction offered under conditions of confidentiality for which the cooperative (or a related party) paid an advisor a fee of at least $250,000. Certain transactions for which the cooperative (or a related party) has contractual protection against disallowance of the tax benefits. Certain transactions resulting in a loss of at least $10 million in any single year or $20 million in any combination of years. Any transaction identified by the IRS by notice, regulation, or other published guidance as a “transaction of interest.” For more information, see Regulations section 1.6011-4. Also, see the Instructions for Form 8886. Penalties. The cooperative may have to pay a penalty if it is required to disclose a reportable transaction under section 6011 and fails to properly complete and file Form 8886. Penalties may also apply under section 6707A if the cooperative fails to file Form 8886 with its cooperative return, fails to provide a copy of Form 8886 to the Office of Tax Shelter Analysis (OTSA), or files a form that fails to include all the information required (or includes incorrect information). Other penalties, such as an accuracy-related penalty under section 6662A, may also apply. See the Instructions for Form 8886 for details on these and other penalties. Reportable transactions by material advisors. Material advisors to any reportable transaction must disclose certain information about the reportable transaction by filing Form 8918 with the IRS. For details, see the Instructions for Form 8918. Transfers to a cooperative controlled by the transferor. Every significant transferor (as defined in Regulations section 1.351-3(d)(1)) that receives stock of a cooperative in exchange for property in a nonrecognition event must include the statement required by Regulations section 1.351-3(a) on or with the transferor's tax return for the tax year of the exchange. The transferee cooperative must include the statement required by Regulations section 1.351-3(b) on or with its return for the tax year of the exchange, unless all the required information is included in any statement(s) provided by a significant transferor that is attached to the same return for the same section 351 exchange. Dual consolidated losses. If a cooperative incurs a dual consolidated loss (as defined in Regulations section 1.1503(d)-1(b)(5)), the cooperative (or consolidated group) may need to attach a domestic use agreement and/or annual certification, as provided in Regulations sections 1.1503(d)-6(d) and (g). Election to reduce basis under section 362(e)(2)(C). If property is transferred to a cooperative in transfers subject to section 362(e)(2), the transferor and the transferee cooperative may elect, under section 362(e)(2)(C), to reduce the transferor's basis in the stock received instead of reducing the transferee corporation's basis in the property transferred. Once made, the election is irrevocable. For more information, see section 362(e)(2) and Regulations section 1.362-4. If an election is made, a statement must be filed in accordance with Regulations section 1.362-4(d)(3). Other forms and statements. See Pub. 542, Corporations, for a list of other forms and statements that a cooperative may need to file in addition to the forms and statements discussed throughout these instructions. Specific Instructions Period Covered File the 2022 return for calendar year 2022 and fiscal years that begin in 2022 and end in 2023. For a fiscal or short tax year return, fill in the tax year space at the top of the form. The 2022 Form 1120-C can also be used if: The cooperative has a tax year of less than 12 months that begins and ends in 2023, and The 2023 Form 1120-C is not available at the time the cooperative is required to file its return. The cooperative must show its 2023 tax year on the 2022 Form 1120-C and take into account any tax law changes that are effective for tax years beginning after December 31, 2022. Name and Address Enter the cooperative's true name (as set forth in the charter or other legal document creating it), address, and EIN on the appropriate lines. Enter the address of the cooperative's principal office or place of business. Include the suite, room, or other unit number after the street address. If the post office does not deliver mail to the street address and the cooperative has a P.O. box, show the box number instead. Note. Do not use the address of the registered agent for the state in which the cooperative is incorporated. For example, if the cooperative is incorporated in Delaware or Nevada and the cooperative's principal office is located in Little Rock, Arkansas, the cooperative should enter the Little Rock address. If the cooperative receives its mail in care of a third party (such as an accountant or an attorney), enter on the street address line “C/O” followed by the third party's name and street address or P.O. box. If the cooperative has a foreign address, include the city or town, state or province, country, and foreign postal code. Do not abbreviate the country name. Follow the country's practice for entering the name of the state or province and postal code. Item A. Identifying Information Consolidated return. Cooperatives filing a consolidated return must check box 1, and attach Form 851, Affiliations Schedule, and other supporting statements to the return. Also, for the first year a subsidiary cooperative is being included in a consolidated return, attach Form 1122 to the parent's consolidated return. Attach a separate Form 1122 for each new subsidiary being included in the consolidated return. If the cooperative is a farmers' tax exempt cooperative and checked Item C, box 1, it cannot file a consolidated return. File supporting statements for each cooperative/corporation included in the consolidated return. Do not use Form 1120-C as a supporting statement. On the supporting statement, use columns to show the following, both before and after adjustments. Items of gross income and deductions. A computation of taxable income. Balance sheets as of the beginning and end of the tax year. A reconciliation of income per books with income per return. A reconciliation of retained earnings. Enter on Form 1120-C the totals for each item of income, gain, loss, expense, or deduction, net of eliminating entries for intercompany transactions between cooperatives/corporations within the consolidated group. Attach consolidated balance sheets and a reconciliation of consolidated retained earnings. The cooperative does not have to provide the information requested in (3), (4), and (5) above if its total receipts (page 1, lines 1a plus lines 4 through 9) and its total assets at the end of the tax year (Schedule L, line 13(d)) are less than $250,000. See Schedule K, Question 14. For more information on consolidated returns, see the regulations under section 1502. Schedule M-3 (Form 1120). A cooperative with total assets (non-consolidated or consolidated for all cooperatives/corporations included with the consolidated tax group) of $10 million or more on the last day of the tax year must file Schedule M-3 (Form 1120) instead of Form 1120-C, Schedule M-1. Cooperatives that (a) are required to file Schedule M-3 (Form 1120) and have less than $50 million total assets at the end of the tax year, or (b) are not required to file Schedule M-3 (Form 1120) and voluntarily file Schedule M-3 (Form 1120), must either (i) complete Schedule M-3 (Form 1120) entirely, or (ii) complete Schedule M-3 (Form 1120) through Part I, and complete Form 1120-C, Schedule M-1, instead of completing Parts II and III of Schedule M-3 (Form 1120). If the cooperative chooses to complete Schedule M-1 instead of completing Parts II and III of Schedule M-3, the amount on Schedule M-1, line 1, must equal the amount on Schedule M-3, Part I, line 11. See the Instructions for Schedule M-3 for more details. Also, see the instructions for Schedule M-1, later. If you are filing Schedule M-3, check Item A, box 2, to indicate that Schedule M-3 is attached. Form 1120 filed previous year. Check box 3 if the cooperative filed Form 1120 in a prior year as a subchapter T cooperative. Item B. Employer Identification Number (EIN) Enter the cooperative's EIN. If the cooperative does not have an EIN, it must apply for one. An EIN can be applied for: Online. Go to IRS.gov/EIN. The EIN is issued immediately once the application information is validated. By faxing or mailing Form SS-4, Application for Employer Identification Number. Cooperatives located in the United States or U.S. possessions can use the online application. Foreign corporations should call 267-941-1099 (not a toll-free number) for more information on obtaining an EIN. See the Instructions for Form SS-4. EIN applied for, but not received. If the cooperative has not received its EIN by the time the return is due, enter “Applied for” and the date you applied in the space for the EIN. For more information, see the Instructions for Form SS-4. Item C. Type of Cooperative Farmers' tax exempt cooperative. Check the “Farmers' tax exempt cooperative” box if the cooperative applied for and received status as a tax exempt farmers', fruit growers', or like association, organized and operated on a cooperative basis, as described in section 521. If the cooperative has submitted Form 1028, Application for Recognition of Exemption, but has not received a determination letter from the IRS, enter “Application Pending” on Form 1120-C at the top of page 1. Nonexempt cooperative. All other subchapter T cooperatives including farmers' cooperatives without section 521 exempt status, organized and operated as described under Who Must File , earlier, should check the “Nonexempt cooperative” box. Item D. Initial Return, Final Return, Name Change, Address Change, or Amended Return If this is the cooperative's first return, check the “Initial return” box. If this is the cooperative's final return and it will no longer exist, file Form 1120-C and check the “Final return” box. If the cooperative changed its name since it last filed a return, check the “Name change” box. Generally, a cooperative must also have amended its articles of incorporation and filed the amendment with the state in which it was incorporated. If the cooperative has changed its address since it last filed a return (including a change to an “in care of” address), check the “Address change” box. If the cooperative must change its originally filed return for any year, it should file a new return including any required attachments. Use the revision of the form applicable to the year being amended. The amended return must provide all the information called for by the form and instructions, not just the new or corrected information. Check the “Amended return” box. Note. If a change in address or responsible party occurs after the return is filed, use Form 8822-B, Change of Address or Responsible Party—Business, to notify the IRS of the new address. For more information, see the instructions for Form 8822-B. Income Except as otherwise provided in the Internal Revenue Code, gross income includes all income from whatever source derived. Exception for income from qualifying shipping activities. Gross income does not include income from qualifying shipping activities if the cooperative makes an election under section 1354 to be taxed on its notional shipping income (as defined in section 1353) at the highest corporate rate. If the election is made, the cooperative may generally not claim any loss, deduction, or credit with respect to qualifying shipping activities. A cooperative making this election may also elect to defer gain on the disposition of a qualifying vessel. Use Form 8902, Alternative Tax on Qualifying Shipping Activities, to figure the tax. Include the alternative tax on Schedule J, line 8. Line 1. Gross Receipts or Sales Enter gross receipts or sales from all business operations except those that must be reported on lines 4 through 9. Special rules apply to certain income, as discussed below. Advance payments. In general, advance payments are reported in the year of receipt. For exceptions to this general rule for cooperatives that use the accrual method of accounting, see the following: To report income from long-term contracts, see section 460. For rules that allow a limited deferral of advance payments beyond the current tax year, see section 451(c). Also, see Regulations sections 1.451-8(c), (d), and (e). For applicability dates, see Regulations section 1.451-8(h). For information on adopting or changing to a permissible method for reporting certain advance payments for services and certain goods by an accrual method cooperative, see the Instructions for Form 3115. Installment sales. Generally, the installment method cannot be used for dealer dispositions of property. A “dealer disposition” is any disposition of (a) personal property by a person who regularly sells or otherwise disposes of personal property of the same type on the installment plan, or (b) real property held for sale to customers in the ordinary course of the taxpayer's trade or business. The restrictions on using the installment method do not apply to the following. Dispositions of property used or produced in the trade or business of farming. Certain dispositions of timeshares and residential lots reported under the installment method for which the cooperative elects to pay interest under section 453(l)(3). Enter on line 1a (and carry to line 3) the gross profit on collections from installment sales. Attach a statement showing the following information for the current and the 3 preceding years: (a) gross sales, (b) cost of goods sold, (c) gross profits, (d) percentage of gross profits to gross sales, (e) amount collected, and (f) gross profit on the amount collected. For sales of timeshares and residential lots reported under the installment method, if the cooperative elects to pay interest under section 453(l)(3), the cooperative's income tax is increased by the interest payable under section 453(l)(3). Report this addition to tax on Schedule J, line 8. Nonaccrual experience method for service providers. Cooperatives are not required to accrue certain amounts to be received from the performance of services that, based on their experience, will not be collected if: The services are in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting; or The cooperative meets the section 448(c) gross receipts test for all prior years. This provision does not apply to any amount if interest is required to be paid on the amount or if there is any penalty for failure to timely pay the amount. See Regulations section 1.448-3 for more information on the nonaccrual experience method, including information on safe harbor methods. For information on a book safe harbor method of accounting for cooperatives that use the nonaccrual experience method of accounting, see Rev. Proc. 2011-46, 2011-42 I.R.B. 518, available at IRS.gov/irb/2011-42_IRB#RP-2011-46, or any successor. Also, see the Instructions for Form 3115 for procedures to obtain automatic consent to change to this method or make certain changes within this method. Cooperatives that qualify to use the nonaccrual experience method should attach a statement showing total gross receipts, the amount not accrued as a result of the application of section 448(d)(5), and the net amount accrued. Enter the net amount on line 1a. Line 2. Cost of Goods Sold Complete and attach Form 1125-A, Cost of Goods Sold, if applicable. Enter on Form 1120-C, line 2, the amount from Form 1125-A, line 8. See Form 1125-A and its instructions. Line 4. Dividends and Inclusions See the instructions for Schedule C, later. Complete Schedule C and enter on line 4 the amount from Schedule C, line 23. Note. Do not report patronage dividends received on Schedule C. Report income from patronage dividends and per-unit retain allocations on line 9. Line 5. Interest Enter taxable interest on U.S. obligations and on loans, notes, mortgages, bonds, bank deposits, corporate bonds, tax refunds, etc. Do not offset interest expense against interest income. Special rules apply to interest income from certain below-market-rate loans. See section 7872 for details. Note. Report tax-exempt interest income on Schedule K, Item 10. Also, if required, include the same amount on Schedule M-1, line 7, or Schedule M-3 (Form 1120), Part II, line 13, if applicable. Line 6. Gross Rents and Royalties Enter the gross amount received from the rental of property and royalties. Deduct expenses such as repairs, interest, taxes, and depreciation on the applicable lines. Line 9. Other Income Enter any other taxable income not reported on lines 1 through 8. List the type and amount of income on an attached statement. If the cooperative has only one item of other income, describe it in parentheses on line 9. Patronage dividends and per-unit retain allocations. Include on line 9 the patronage dividends and per-unit retain allocations listed below. Attach a statement listing the name of each declaring association from which the cooperative received income from patronage dividends and per-unit retain allocations, and the total amount received from each association. Include the items listed below. Patronage dividends received in: Money, Qualified written notices of allocation, or Other property (except nonqualified written notices of allocation). Nonpatronage distributions received on a patronage basis from tax-exempt farmers' cooperatives in: Money; Qualified written notices of allocation; or Other property (except nonqualified written notices of allocation), based on earnings of that cooperative either from business done with or for the United States or any of its agencies (or from sources other than patronage, such as investment income). Qualified written notices of allocation at their stated dollar amounts and property at its fair market value (FMV). Amounts received on the redemption, sale, or other disposition of nonqualified written notices of allocation. Generally, patronage dividends from purchases of capital assets or depreciable property are not includible in income but must be used to reduce the basis of the assets. See section 1385(b) and the related regulations. Amounts received (or the stated dollar value of qualified per-unit retain certificates received) from the sale or redemption of nonqualified per-unit retain certificates. Per-unit retain allocations received (except nonqualified per-unit retain certificates). See section 1385. Note. Payments from the Commodity Credit Corporation to a farmers' cooperative for certain expenses of the co-op's farmers-producers under a “reseal” program of the U.S. Department of Agriculture are patronage-source income that may give rise to patronage dividends under section 1382(b)(1). Other. Examples of other income to report on line 9 include the following. Recoveries of bad debts deducted in prior years under the specific charge-off method. The amount included in income from Form 6478, Biofuel Producer Credit. The amount included in income from Form 8864, Biodiesel, Renewable Diesel, or Sustainable Aviation Fuels Credit. Refunds of taxes deducted in prior years to the extent they reduced the amount of tax imposed. See section 111 and the related regulations. Do not offset current-year taxes against any tax refunds. Ordinary income from trade or business activities of a partnership (from Schedule K-1 (Form 1065)). Do not offset ordinary losses against ordinary income. Instead, include the losses on line 23. Show the partnership's name, address, and EIN on a separate statement attached to this return. If the amount entered is from more than one partnership, identify the amount from each partnership. The transferred loss amount identified as "Section 91 Transferred Loss Amount," which is required to be recognized when substantially all the assets of a foreign branch are transferred to a specified 10%-owned foreign corporation (as defined in section 245A(b)) with respect to which the corporation was a U.S. shareholder immediately after the transfer. See section 91. The ratable portion of any net positive section 481(a) adjustment. See Section 481(a) adjustment , earlier. Part or all of the proceeds received from certain cooperative-owned life insurance contracts issued after August 17, 2006. See section 101(j) for details. Form 8925, Report of Employer-Owned Life Insurance Contracts, may also be required. See Form 8925 and its instructions. Income from cancellation of debt (COD) for the repurchase of a debt instrument for less than its adjusted issue price. The cooperative's share of the following income from Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund. Ordinary earnings of a qualified electing fund (QEF). Gain or loss from marking passive foreign investment company (PFIC) stock to market. Gain or loss from sale or other disposition of section 1296 stock. Excess distributions from a section 1291 fund allocated to the current year and pre-PFIC years, if any. See Form 8621 and the Instructions for Form 8621 for details. The amount of payroll tax credit taken by an employer on its 2022 employment tax returns (Forms 941, 943, and 944) for qualified paid sick and qualified paid family leave under FFCRA and ARP (both the nonrefundable and refundable portions). The cooperative must include the full amount of the credit for qualified sick and family leave wages in gross income for the tax year that includes the last day of any calendar quarter in which the credit is allowed. Note. A credit is available only if the leave was taken after March 31, 2020, and before October 1, 2021, and only after the qualified leave wages were paid, which might under certain circumstances not occur until a quarter after September 30, 2021, including quarters in 2022. Deductions Limitations on Deductions Section 263A uniform capitalization rules. The uniform capitalization rules of section 263A generally require cooperatives to capitalize, or include in inventory, certain costs. Cooperatives subject to the section 263A uniform capitalization rules are required to capitalize: Direct costs of assets produced or acquired for resale, and Certain indirect costs (including taxes) that are properly allocable to property produced or acquired for resale. The costs required to be capitalized under section 263A are not deductible until the property (to which the costs relate) is sold, used, or otherwise disposed of by the cooperative. The cooperative recovers these costs through depreciation, amortization, or costs of goods sold. A small business taxpayer (defined earlier) is not required to capitalize costs under section 263A. A small business taxpayer that wants to discontinue capitalizing costs under section 263A must change its method of accounting. See section 263A(i), Regulation section 1.263A-1(j), and the Instructions for Form 3115. For more information on the uniform capitalization rules, see Pub. 538. Also, seeRegulations sections 1.263A-1 through 1.263A-3. For more information on non-small business taxpayers, seeRegulations section 1.263A-4. For rules for property produced in a farming business, see Pub. 225. Transactions between related taxpayers. Generally, an accrual basis taxpayer can only deduct business expenses and interest owed to a related party in the year payment is included in the income of the related party. See sections 163(e)(3), 163(j), and 267(a)(2) for the limitations on deductions for unpaid interest and expenses. Limitations on business interest expense. Business interest expense may be limited. See section 163(j) and Form 8990. Also, see Limitation on deduction in the instructions for line 16 and Schedule K, Questions 17 and 18, later. Section 291 limitations. Cooperatives may be required to adjust deductions for depletion of iron ore and coal, intangible drilling, exploration and development costs, and the amortizable basis of pollution control facilities. See section 291 to determine the amount of the adjustment, later. Election to deduct business start-up and organizational costs. A cooperative can elect to deduct a limited amount of start-up and organizational costs it paid or incurred. Any remaining costs must generally be amortized over a 180-month period. See sections 195 and 248 and the related regulations. Time for making an election. The cooperative generally elects to deduct start-up or organizational costs by claiming the deduction on its income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. For more details, including special rules for costs paid or incurred before September 9, 2008, see the Instructions for Form 4562. Also, see Pub. 535, Business Expenses. If the cooperative timely filed its return for the year without making an election, it can still make an election by filing an amended return within 6 months of the due date of the return (excluding extensions). Clearly indicate the election on the amended return and write “Filed pursuant to section 301.9100-2” at the top of the amended return. File the amended return at the same address the cooperative filed its original return. The election applies when figuring taxable income for the current tax year and all subsequent years. The cooperative can choose to forgo the elections above by affirmatively electing to capitalize its start-up or organizational costs on its income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. 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 23. For amortization that begins during the current tax year, complete and attach Form 4562, Depreciation and Amortization. Passive activity limitations. Limitations on passive activity losses and credits under section 469 apply to closely held cooperatives (defined later). Generally, the two kinds of passive activities are: Trade or business activities in which the cooperative did not materially participate for the tax year, and Rental activities, regardless of its participation. Cooperatives subject to the passive activity limitations must complete Form 8810 to compute their allowable passive activity loss and credit. Before completing Form 8810, see Temporary Regulations section 1.163-8T, which provides rules for allocating interest expense among activities. If a passive activity is also subject to the at-risk rules of section 465, or the tax-exempt use loss rules of section 470, those rules apply before the passive loss rules. For more information, see section 469, the related regulations, and Pub. 925, Passive Activity and At-Risk Rules. Closely held cooperatives. A cooperative is “closely held” (as defined in section 469(j)(1)) if at any time during the last half of the tax year more than 50% in value of its outstanding stock is owned, directly or indirectly, by or for not more than five individuals. Certain organizations are treated as individuals for purposes of this test. See section 542(a)(2). For rules for determining stock ownership, see section 544 (as modified by section 465(a)(3)). Reducing certain expenses for which credits are allowable. If the cooperative claims certain credits, it may need to reduce the otherwise allowable deductions for expenses used to figure the credit. This applies to credits such as the following. Work opportunity credit (Form 5884). Credit for increasing research activities (Form 6765). Orphan drug credit (Form 8820). Disabled access credit (Form 8826). Empowerment zone employment credit (Form 8844). Indian employment credit (Form 8845). Credit for employer social security and Medicare taxes paid on certain employee tips (Form 8846). Credit for small employer pension plan start-up costs (Form 8881). Credit for employer-provided childcare facilities and services (Form 8882). Low sulfur diesel fuel production credit (Form 8896). Mine rescue team training credit (Form 8923). Credit for employer differential wage payments (Form 8932). Credit for small employer health insurance premiums (Form 8941). Employer credit for paid family and medical leave (Form 8994). If the cooperative has any of the credits listed above, figure the current year credit before figuring the deduction for expenses on which the credit is based. If the cooperative capitalized any costs on which it figured the credit, it may need to reduce the amount capitalized by the credit attributable to these costs. See the instructions for the form used to figure the applicable credit for more details. Limitations on deductions related to property leased to tax-exempt entities. If a cooperative leases property to a governmental or other tax-exempt entity, the cooperative cannot claim deductions related to the property to the extent that they exceed the cooperative's income from the lease payments. This disallowed tax-exempt use loss can be carried over to the next tax year and treated as a deduction with respect to the property for that tax year. See section 470(d) for exceptions. Line 11. Compensation of Officers Enter deductible officers' compensation on line 11. Do not include compensation deductible elsewhere on the return, such as amounts included in cost of goods sold, elective contributions to a section 401(k) cash or deferred arrangement, or amounts contributed under a salary reduction SEP agreement or a SIMPLE IRA plan. If the cooperative's total receipts (line 1a plus lines 4 through 9) are $500,000 or more, complete Form 1125-E, Compensation of Officers. On Form 1120-C, enter on line 11 the amount from Form 1125-E, line 4. Line 12. Salaries and Wages Enter the total salaries and wages paid for the tax year. Do not include salaries and wages deductible elsewhere on the return, such as amounts included in officers' compensation, cost of goods sold, elective contributions to a section 401(k) cash or deferred arrangement, or amounts contributed under a salary reduction SEP agreement or a SIMPLE IRA plan. If the cooperative provided taxable fringe benefits to its employees, such as personal use of a car, do not deduct as wages the amount allocated for depreciation and other expenses claimed on lines 18 and 23. If the cooperative claims a credit for any wages paid or incurred, it may need to reduce any corresponding deduction for officers' compensation and salaries and wages. See Reducing certain expenses for which credits are allowable, earlier. Line 13. Bad Debts Enter the total debts that became worthless in whole or in part during the tax year. A cooperative that uses the cash method of accounting cannot claim a bad debt deduction unless the amount was previously included in income. Line 14. Rents If the cooperative rented or leased a vehicle, enter the total annual rent or lease expense paid or incurred during the year. Also, complete Form 4562, Part V. If the cooperative leased a vehicle for a term of 30 days or more, the deduction for vehicle lease expense may have to be reduced by an amount includible in income called the inclusion amount. The cooperative may have an inclusion amount if: The lease term began: And the vehicle's FMV on the first day of the lease exceeded: Cars (excluding Trucks and Vans) After 12/31/21 but before 1/1/23 $56,000 After 12/31/20 but before 1/1/22 $51,000 After 12/31/17 but before 1/1/21 $50,000 After 12/31/12 but before 1/1/18 $19,000 After 12/31/07 but before 1/1/13 $18,500 Trucks and Vans After 12/31/21 but before 1/1/23 $56,000 After 12/31/20 but before 1/1/22 $51,000 After 12/31/17 but before 1/1/21 $50,000 After 12/31/13 but before 1/1/18 $19,500 After 12/31/09 but before 1/1/14 $19,000 After 12/31/08 but before 1/1/10 $18,500 After 12/31/07 but before 1/1/09 $19,000 See Pub. 463, Travel, Gift, and Car Expenses, for instructions on figuring the inclusion amount. The inclusion amount for lease terms beginning in 2023 will be published in the Internal Revenue Bulletin in early 2023. Line 15. Taxes and Licenses Enter taxes paid or accrued during the tax year, but do not include the following. Federal income taxes. Foreign or U.S. possession income taxes if a foreign tax credit is claimed. Taxes not imposed on the cooperative. Taxes, including state or local sales taxes, that are paid or incurred in connection with an acquisition or disposition of property (these taxes must be treated as part of the cost of the acquired property, or in the case of a disposition, as a reduction in the amount realized on the disposition). Taxes assessed against local benefits that increase the value of the property assessed (such as for paving, etc.). Taxes deducted elsewhere on the return, such as those reflected in cost of goods sold. See section 164(d) for the rule on apportionment of taxes on real property between the seller and purchaser. Do not reduce the cooperative’s deduction for social security and Medicare taxes by the nonrefundable and refundable portions of the FFCRA and ARP credits for qualified sick and family leave wages claimed on its employment tax returns. Instead, report this amount as income on line 9. Line 16. Interest Note. Do not offset interest income against interest expense. The cooperative must make an interest allocation if the proceeds of a loan were used for more than one purpose (for example, to purchase a portfolio investment and to acquire an interest in a passive activity). See Temporary Regulations section 1.163-8T for the interest allocation rules. Do not deduct the following interest. Interest on indebtedness incurred or continued to purchase or carry obligations if the interest is wholly exempt from income tax. For exceptions, see section 265(b). For cash basis taxpayers, prepaid interest allocable to years following the current tax year. For example, a cash basis calendar year taxpayer who in 2022 prepaid interest allocable to any period after 2022 can deduct only the amount allocable to 2022. Interest and carrying charges on straddles. Generally, these amounts must be capitalized. See section 263(g). Interest on debt allocable to the production of designated property by a cooperative for its own use or for sale. The cooperative must capitalize this interest. Also, capitalize any interest on debt allocable to an asset used to produce the property. See section 263A(f) and Regulations sections 1.263A-8 through 1.263A-15 for definitions and more information. Interest paid or incurred on any portion of an underpayment of tax that is attributable to an understatement arising from an undisclosed listed transaction or an undisclosed reportable avoidance transaction (other than a listed transaction) entered into in tax years beginning after October 22, 2004. Special rules apply to: Forgone interest on certain below-market-rate loans (see section 7872). Original issue discount (OID) on certain high yield discount obligations. See section 163(e)(5) to determine the amount of the deduction for OID that is deferred and the amount that is disallowed on a high yield discount obligation. The rules under section 163(e)(5) do not apply to certain high yield discount obligations issued after August 31, 2008, and before January 1, 2011. See section 163(e)(5)(F). Interest allocable to unborrowed policy cash values of life insurance, endowment, or annuity contracts issued after June 8, 1997. See section 264(f). Attach a statement showing the computation of the deduction. Limitation on deduction. Under section 163(j), business interest expense is generally limited to the sum of business interest income, 30% of the adjusted taxable income, and floor plan financing interest. The amount of any business interest expense that is not allowed as a deduction for the tax year is carried forward to the following year. If section 163(j) applies, use Form 8990 to figure the amount of business interest expense the corporation can deduct for the current tax year and the amount that can be carried forward to the next year. See the Instructions for Form 8990. Also, see Schedule K, Question 17 and 18, later. Line 17. 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). Cooperatives reporting taxable income on the accrual method can elect to treat as paid during the tax year any contributions paid by the due date for filing the cooperative’s return (not including extensions), if the contributions were authorized by the board of directors during the tax year. Attach a declaration to the return stating that the resolution authorizing the contributions was adopted by the board of directors during the tax year. The declaration must include the date the resolution was adopted. Limitation on deduction. Generally, the total amount claimed cannot be more than 10% of taxable income (line 27) computed without regard to the following. Any deduction for contributions. The special deductions on line 26b. The limitation under section 249 on the deduction for bond premium. Any net operating loss (NOL) carryback to the tax year under section 172. Any capital loss carryback to the tax year under section 1212(a)(1). Any deduction for income attributable to domestic production activities of specified agricultural or horticultural cooperatives under section 199A(g). Carryover. Charitable contributions over the 10% limitation cannot be deducted for the tax year but can be carried over to the next 5 tax years. See the exception below for farmers and ranchers and certain Native Corporations. Special rules apply if the cooperative has an NOL carryover to the tax year. In figuring the charitable contributions deduction for the current tax year, the 10% limit is applied using the taxable income after taking into account any deduction for the NOL. To figure the amount of any remaining NOL carryover to later years, taxable income must be modified (see section 172(b)). To the extent that contributions are used to reduce taxable income for this purpose and increase an NOL carryover, a contributions carryover is not allowed. See section 170(d)(2)(B). Suspension of 10% limitation for farmers and ranchers and certain Native Corporations. Certain cooperatives can deduct contributions of qualified conservation property without regard to the general 10% limit. This applies to: A qualified farmer or rancher (as defined in section 170(b)(1)(E)(v)) that does not have publicly traded stock; and A Native Corporation (as defined in section 170(b)(2)(C)(iii)) that contributes property which was land conveyed under the Alaska Native Claims Settlement Act. The total amount of the contribution claimed for the qualified conservation property cannot exceed 100% of the excess of the cooperative's taxable income (as computed above substituting “100%” for “10%”) over all other allowable charitable contributions. Any excess qualified conservation contributions can be carried over to the next 15 years, subject to the 100% limitation. See section 170(b)(2)(B) and (C). Cash contributions. For contributions of cash, check, or other monetary gifts (regardless of the amount), the cooperative must maintain a bank record, or a receipt, letter, or other written communication from the donee organization indicating the name of the organization, the date of the contribution, and the amount of the contribution. Contributions of $250 or more. A cooperative can deduct a contribution of $250 or more only if it gets a written acknowledgment from the donee organization that shows the amount of cash contributed, describes any property contributed (but not its value), and either gives a description and a good faith estimate of the value of any goods or services provided in return for the contribution or states that no goods or services were provided in return for the contribution. The acknowledgment must be obtained by the due date (including extensions) of the cooperative's return, or, if earlier, the date the return is filed. Do not attach the acknowledgment to the tax return, but keep it with the cooperative's records. Contributions of property other than cash. If a cooperative contributes property other than cash and claims over a $500 deduction for the property, it must attach a statement to the return describing the kind of property contributed and the method used to determine its fair market value (FMV). Complete and attach Form 8283, Noncash Charitable Contributions, for contributions of property (other than money) if the total claimed deduction for all property contributed was more than $5,000. Special rules apply to the contribution of certain property. See the Instructions for Form 8283. Qualified conservation contributions. Special rules apply to qualified conservation contributions, including contributions of certain easements on buildings located in a registered historic district. See section 170(h) and Pub. 526, Charitable Contributions. Other special rules. The cooperative must reduce its deduction for contributions of certain capital gain property. See sections 170(e)(1) and 170(e)(5). For more information on charitable contributions, including substantiation and recordkeeping requirements, see section 170 and the related regulations, and Pub. 526. For special rules that apply to corporations, see Pub. 542. Line 18. Depreciation Include on line 18 depreciation and the cost of certain property that the cooperative elected to expense under section 179 from Form 4562. Include amounts not claimed on Form 1125-A or elsewhere on the return. See Form 4562 and the Instructions for Form 4562. Line 20. Pension, Profit-Sharing, etc., Plans Enter the deduction for contributions to qualified pension, profit-sharing, or other funded deferred compensation plans. Generally, employers who maintain such a plan must file one of the forms listed below unless exempt from filing under regulations or other applicable guidance, even if the plan is not a qualified plan under the Internal Revenue Code. The filing requirement applies even if the cooperative does not claim a deduction for the current tax year. There are penalties for failure to file these forms timely and for overstating the pension plan deduction. See sections 6652(e) and 6662(f). Also, see the instructions for the applicable form. Form 5500. Annual Return/Report of Employee Benefit Plan. Form 5500-SF. Short Form Annual Return/Report of Small Employee Benefit Plan. File this form instead of Form 5500, generally if there were under 100 participants at the beginning of the plan year. If you are a small plan (generally under 100 participants at the beginning of the plan year), you may be eligible to file the Form 5500-SF instead of the Form 5500. For more information, see the instructions to the Form 5500-SF. Instructions and more information can be found at the Department of Labor website at www.EFAST.dol.gov. Note. Form 5500 and Form 5500-SF must be filed electronically under the computerized ERISA Filing Acceptance System (EFAST2). For more information, see the EFAST2 website at www.EFAST.dol.gov. Form 5500-EZ. Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan. File this form for a plan that only covers the owner (or the owner and spouse) or a foreign plan that is required to file an annual return and does not file the annual return electronically on Form 5500-SF. See the Instructions for Form 5500-EZ. Line 21. Employee Benefit Programs Enter contributions to employee benefit programs not claimed elsewhere on the return (for example, insurance or health and welfare programs) that are not an incidental part of a pension, profit-sharing, etc., plan included on line 20. Line 22. Section 199A(g) Deduction This deduction applies only to specified agricultural and horticultural cooperatives (specified cooperatives). Specified agricultural or horticultural cooperatives (specified cooperatives) to which Part I of subchapter T applies may qualify for a deduction under section 199A(g). A specified cooperative is a cooperative that markets or is engaged in the manufacturing, production, growth or extraction of agricultural or horticultural products. Specified cooperatives that qualify under section 521 are considered “exempt” cooperatives. All other specified cooperatives are considered “nonexempt.” Special rules apply to specified cooperatives with both patronage and nonpatronage income and losses. A specified cooperative's section 199A(g) deduction generally equals 9% of the lesser of: Qualified production activity income (QPAI), or Taxable income. Note. QPAI and taxable income are computed without regard to any deductions for patronage dividends, per-unit retain allocations, or nonpatronage distributions under section 1382(b) or (c). A specified cooperative with oil-related QPAI must also reduce the deduction by 3% of the least of the following amounts. Oil-related QPAI. QPAI. Taxable income figured without the deduction. The deduction shall not exceed 50% of the Form W-2 wages allocable to domestic production gross receipts (DPGR) of the specified cooperative for the tax year. Reporting the deduction. Specified cooperatives may use Form 8903, Domestic Production Activities Deduction, to compute the section 199A(g) deduction. Write “Specified Cooperative Section 199A(g) deduction” across the top of Form 8903. Form 8903 must be attached to the cooperative's return. See the Instructions for Form 8903. Alternatively, specified cooperatives may create and attach a schedule similar to Form 8903 to compute the section 199A(g) deduction. Note. For tax years beginning after January 19, 2021, a specified cooperative should apply the final regulations under section 199A(g) (T.D. 9947) published January 19, 2021. However, a specified cooperative may choose to apply the final rules to tax years beginning on or before January 19, 2021, provided the cooperative follows the rules in their entirety and in a consistent manner. Alternatively, the cooperative may rely on the proposed regulations (REG-118425-18), published June 19, 2019, for tax years beginning on or before January 19, 2021, provided the cooperative follows the proposed rules in their entirety and in a consistent manner. For purposes of the W-2 Wage Limitation, also see Rev. Proc. 2021-11, 2021-6 I.R.B. 833, available at IRS.gov/irb/2021-6_IRB#REV-PROC-2021-11. Line 23. Other Deductions Attach a statement, listing by type and amount, all allowable deductions that are not deductible elsewhere on Form 1120-C. Enter the total on line 23. See Pub. 535 for details on other deductions that may apply to cooperatives. Examples of other deductions include the following. Amortization. See Form 4562, Part VI. Any applicable deduction under section 179D for costs of energy efficient commercial building property placed in service during the tax year. Complete and attach new Form 7205, if applicable. Certain business start-up and organizational costs (discussed earlier under Election to deduct business start-up and organizational costs). Reforestation costs. The cooperative can elect to deduct up to $10,000 of qualifying reforestation expenses for each qualified timber property. The cooperative can elect to amortize over 84 months any amount not deducted. See Pub. 535. Depletion. See sections 613 and 613A for percentage depletion rates applicable to natural deposits. Also, see section 291 for the limitation on the depletion deduction for iron ore and coal (including lignite). Attach Form T (Timber), Forest Activities Schedule, if a deduction for depletion of timber is taken. See Pub. 535 for more information on depletion. Insurance premiums. Legal and professional fees. Repairs and maintenance (discussed later). Supplies used and consumed in the business. Travel, meals, and entertainment expenses. Special rules apply (discussed later). Utilities. Ordinary losses from trade or business activities of a partnership (from Schedule K-1 (Form 1065)). Do not offset ordinary income against ordinary losses. Instead, include the income on line 9. Show the partnership's name, address, and EIN on a separate statement attached to this return. If the amount entered is from more than one partnership, identify the amount from each partnership. Any extraterritorial income exclusion (from Form 8873). Any net negative section 481(a) adjustment. See the instructions for line 9. Dividends paid in cash on stock held by an employee stock ownership plan. However, a deduction can only be taken for the dividends above if, according to the plan, the dividends are: Paid in cash directly to the plan participants or beneficiaries; 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; 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 Used to make payments on a loan described in section 404(a)(9). See section 404(k) for more details and the limitation on certain dividends. Do not deduct the following. Amounts paid or incurred to, or at the direction of, a government or governmental entity for the violation, or investigation or inquiry into the potential violation, of a law. See section 162(f) for more information and exceptions. Any amount that is allocable to a class of exempt income. See section 265(b) for exceptions. Lobbying expenses. However, see exceptions (discussed later). Amounts paid or incurred for any settlement, payout, or attorney fees related to sexual harassment or sexual abuse, if such payments are subject to a nondisclosure agreement. See section 162(q). Repairs and maintenance. Enter the cost of repairs and maintenance not claimed elsewhere on the return, such as labor and supplies, that are not payments to produce or improve tangible or real property. See Regulations section 1.263(a)-1. For example, amounts are paid for improvements if they are for betterments to the property, restorations of the property (such as the replacements of major components or substantial structural parts), or if they adapt the property to a new or different use. Amounts paid to produce or improve property must be capitalized. See Regulations sections 1.263(a)-2 and (a)-3. The cooperative can deduct repair and maintenance expenses only to the extent they relate to a trade or business activity. See Regulations section 1.162-4. The cooperative may elect to capitalize certain repair and maintenance costs consistent with its books and records. See Regulations section 1.263(a)-3(n) for information on how to make the election. Travel, meals, and entertainment. Subject to limitations and restrictions discussed below, a cooperative can deduct ordinary and necessary travel, meals, and nonentertainment expenses paid or incurred in its trade or business. Generally, entertainment expenses, membership dues, and facilities used in connection with these activities cannot be deducted. Generally, no deduction is allowed for qualified transportation fringe benefits. Also, special rules apply to deductions for gifts and convention expenses. See section 274, Pub. 463, and Pub. 535 for details. Travel. The cooperative cannot deduct travel expenses of any individual accompanying a cooperative officer or employee, including a spouse or dependent of the officer or employee, unless: That individual is an employee of the cooperative, and That individual’s travel is for a bona fide business purpose and would otherwise be deductible by that individual. Meals. Generally, the cooperative can deduct only 50% of the amount otherwise allowable for nonentertainment related meal expenses paid or incurred in its trade or business. However, the cooperative can deduct 100% of business meal expenses if the meals are food and beverages provided by a restaurant. This applies only to amounts paid or incurred after December 31, 2020, and before January 1, 2023. 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 cooperative must be present at the meal. For more information, see Pub. 535. 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 for QTFs provided by employers to their employees. QTFs are defined in section 132(f)(1) and include: Transportation in a commuter highway vehicle between the employee's residence and place of employment, Any transit pass, and Qualified parking. See section 274, Pub. 15-B, and Pub. 535 for more information. Membership dues. The cooperative can deduct amounts paid or incurred for membership dues in civic or public service organizations, professional organizations (such as bar and medical associations), business leagues, trade associations, chambers of commerce, boards of trade, and real estate boards. However, no deduction is allowed if a principal purpose of the organization is to entertain, or provide entertainment facilities for members or their guests. In addition, cooperatives cannot deduct membership dues in any club organized for business, pleasure, recreation, or other social purpose. This includes country clubs, golf and athletic clubs, airline and hotel clubs, and clubs operated to provide meals under conditions favorable to business discussion. Entertainment facilities. The cooperative cannot deduct an expense paid or incurred for a facility (such as a yacht or hunting lodge) used for an activity usually considered entertainment, amusement, or recreation. Amounts treated as compensation. Generally, the cooperative may be able to deduct otherwise nondeductible entertainment, amusement, or recreation expenses if the amounts are treated as compensation to the recipient and reported on Form W-2, Wage and Tax Statement, for an employee or on Form 1099-NEC, Nonemployee Compensation, for an independent contractor. However, if the recipient is an officer, director, beneficial owner (directly or indirectly), or other “specified individual” (as defined in section 274(e)(2)(B) and Regulations section 1.274-9(b)), special rules apply. Lobbying expenses. Generally, lobbying expenses are not deductible. These expenses include amounts paid or incurred in connection with: Influencing legislation, or Any communication with certain federal executive branch officials in an attempt to influence the official actions or positions of the officials. See Regulations section 1.162-29 for the definition of “influencing legislation.” Dues and other similar amounts paid to certain tax-exempt organizations may not be deductible. If certain in-house expenditures do not exceed $2,000, they are deductible. See section 162(e)(4)(B). Line 25a. Taxable Income Before Adjustments and Special Deductions At-risk rules. Generally, special at-risk rules under section 465 apply to closely held cooperatives (see Passive activity limitations , earlier) engaged in any activity as a trade or business or for the production of income. These cooperatives may have to adjust the amount on line 25a. (See below.) A taxpayer is generally considered “at-risk” for an amount equal to the taxpayer’s investment in the entity. That investment consists of money and other property contributed to the entity and amounts borrowed on behalf of the entity. The at-risk rules do not apply to: Holding real property placed in service by the cooperative before 1987; Equipment leasing under sections 465(c)(4), (5), and (6); or Any qualifying business of a qualified cooperative under section 465(c)(7). However, the at-risk rules do apply to the holding of mineral property. If the at-risk rules apply, adjust the amount on this line for any section 465(d) losses. These losses are limited to the amount for which the cooperative is at risk for each separate activity at the close of the tax year. If the cooperative is involved in one or more activities, any of which incurs a loss for the year, report the losses for each activity separately. Attach Form 6198, At-Risk Limitations, showing the amount at risk and gross income and deductions for the activities with the losses. If the cooperative sells or otherwise disposes of an asset or its interest (either total or partial) in an activity to which the at-risk rules apply, determine the net profit or loss from the activity by combining the gain or loss on the sale or disposition with the profit or loss from the activity. If the cooperative has a net loss, the loss may be limited because of the at-risk rules. Treat any loss from an activity not allowed for the current tax year as a deduction allocable to the activity in the next tax year. Cooperatives are required to allocate income and deductions between patronage and nonpatronage-related business. Cooperatives with gross receipts and assets of $250,000 or more must complete Schedule G. See the instructions for Schedule G. Line 25b. Deductions and Adjustments From Schedule H Complete Schedule H. Enter on line 25b the amount from Schedule H, line 5. See the instructions forSchedule H. Line 25c. Taxable Income Before Net Operating Loss and Special Deductions Subtract line 25b from line 25a and enter the result on line 25c. Line 26a. Net Operating Loss Deduction A cooperative can use the NOL incurred in 1 tax year to reduce its taxable income in another tax year. Enter on line 26a the total NOL carryovers from other tax years, but do not enter more than the cooperative's taxable income (after special deductions). Attach a statement showing the computation of the NOL deduction. Also, complete Schedule K, Item 12, if applicable. The cooperative must attach a statement separately accounting for patronage and nonpatronage-sourced NOLs. Note. Patronage-sourced NOLs cannot be used to reduce nonpatronage-sourced taxable income. The following special rules apply. If an ownership change (described in section 382(g)) occurs, the amount of the taxable income of a loss cooperative that may be offset by the pre-change NOL carryovers may be limited. See section 382 and the related regulations. A loss cooperative must include the information statement as provided in Regulations section 1.382-11(a) with its income tax return for each tax year that it is a loss cooperative in which an ownership shift, equity structure shift, or other transaction described in Temporary Regulations section 1.382-2T(a)(2)(i) occurs. If the cooperative makes the closing-of-the-books election, see Regulations section 1.382-6(b). The limitations under section 382 do not apply to certain ownership changes after February 17, 2009, made according to a restructuring plan under the Emergency Economic Stabilization Act of 2008. See section 382(n). For guidance in applying section 382 to loss cooperatives whose instruments were acquired by Treasury under certain programs under the Emergency Economic Stabilization Act of 2008, see Notice 2010-2, 2010-2 I.R.B. 251. If a cooperative acquires control of another cooperative (or acquires its assets in a reorganization), the amount of pre-acquisition losses that may offset recognized built-in gain may be limited (see section 384). If a cooperative elects the alternative tax on qualifying shipping activities under section 1354, no deduction is allowed for an NOL attributable to the qualifying shipping activities to the extent that the loss is carried forward from a tax year preceding the first tax year for which the alternative tax election was made. See section 1358(b)(2). For more details on the NOL deduction, see section 172 and the Instructions for Form 1139. Line 26b. Special Deductions See the instructions for Schedule C. Then, complete Schedule C and enter on line 26b the amount from Schedule C, line 24. Line 26c. Total NOL and Special Deductions Combine lines 26a and 26b and enter the result on line 26c. Tax, Refundable Credits, and Payments Line 27. Taxable Income See Schedule K, Question 14, to determine if the cooperative needs to complete Schedule G. Taxable income reported on line 27 cannot be less than the nonpatronage taxable income shown on Schedule G, line 10, column b. Patronage source losses cannot be used to offset nonpatronage income. See the instructions for Schedule G. Minimum taxable income. The cooperative's taxable income cannot be less than the inversion gain of the cooperative for the tax year, if the cooperative is an expatriated entity or a partner in an expatriated entity. See section 7874(a). Net operating loss (NOL). If line 27 (figured without regard to the minimum taxable income rule stated above) is zero or less, the cooperative may have an NOL that can be carried back or forward as a deduction to other tax years. Only farming losses and losses of an insurance company (other than a life insurance company) can be carried back. The carryback period for these losses is 2 years. For NOLs that can be carried back, the cooperative can elect to waive the carryback period and instead carry the NOL forward to future tax years. See the instructions for Schedule K, Item 12 for information on making the election to waive the carryback period. See the Instructions for Form 1139 for other special rules and elections. The NOL deduction for tax year 2022 cannot exceed the aggregate amount of NOLs arising in tax years beginning before January 1, 2018, carried to such year plus the lesser of: The aggregate amount of NOLs arising in tax years beginning after December 31, 2017, carried to such tax year; or 80% of the excess, if any, of taxable income determined without any NOL deduction, section 199A deduction, or section 250 deduction, over any NOL carryover to the tax year from tax years beginning before January 1, 2018. An exception applies for NOLs of insurance companies other than life insurance companies. The 80% taxable income limit does not apply to these entities. See sections 172(b) and (f). Merchant Marine capital construction fund. To take a deduction for amounts contributed to a capital construction fund (CCF), reduce the amount that would otherwise be entered on line 27 by the amount of the deduction. On the dotted line next to the entry space, enter “CCF” and the amount of the deduction. For more information, see section 7518. Line 29 Reserved for future use. Line 30a. 2021 Overpayment Credited to 2022 Enter the amount of overpayment credited to 2022 from the tax return filed for 2021. Line 30b. Estimated Tax Payments Enter any estimated tax payments the cooperative made for the tax year. Beneficiaries of trusts. If the cooperative is the beneficiary of a trust, and the trust makes a section 643(g) election to credit its estimated tax payments to its beneficiaries, include the cooperative's share of the payment in the total for line 30b. Enter “T” and the amount of the payment in the shaded space beside line 30b. Line 30c. Overpaid Estimated Tax If the cooperative overpaid estimated tax, it may be able to get a quick refund by filing Form 4466. The overpayment must be at least 10% of the cooperative's expected income tax liability and at least $500. File Form 4466 after the end of the cooperative's tax year, and no later than the due date for filing the cooperative’s tax return. Form 4466 must be filed before the cooperative files its tax return. See the instructions for Form 4466. Line 30d. Net Tax Payments Combine lines 30a through 30c and enter the result on line 30d. Line 30f Credit from Form 2439. Enter any credit from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, for the cooperative's share of the tax paid by a regulated investment company (RIC) or a real estate investment trust (REIT) on undistributed long-term capital gains included in the cooperative's income. Attach Form 2439. 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. Credit for tax on ozone-depleting chemicals. Include on line 30f any credit the cooperative is claiming under section 4682(g)(2) for tax on ozone-depleting chemicals. Enter “ODC” next to the entry space. Line 30g Reserved for future use. Line 30h. Section 1383 Adjustment If the cooperative would pay less total tax by claiming the deduction for the redemption of nonqualified written notices of allocation or nonqualified per-unit retain certificates in the issue year versus the current tax year, refigure the tax for the years the nonqualified written notices or certificates were originally issued (deducting them in the issue year), then enter the amount of the reduction in the issue years' taxes on this line. Attach a statement showing how the adjustment was figured. This adjustment is treated as a payment, and any amount that is more than the tax on line 28 will be refunded. Line 30j. Total Payments, Refundable Credits, and Section 1383 Adjustments Add the amounts on lines 30d through 30h and enter the total on line 30j. Backup withholding. If the cooperative had federal income tax withheld from any payments it received because, for example, it failed to give the payer its correct EIN, include the amount withheld in the total for line 30j. Enter the amount withheld and the words “Backup withholding” in the blank space above line 30j. Line 31. Estimated Tax Penalty Generally, the cooperative does not have to file Form 2220 because the IRS can figure the penalty amount, if any, and bill the cooperative. However, even if the cooperative does not owe the penalty, it must complete and attach Form 2220 if: The annualized income or adjusted seasonal installment method is used, or The cooperative is a large corporation (as defined in the Instructions for Form 2220) computing its first required installment based on the prior year's tax. See the Instructions for Form 2220. If Form 2220 is attached, check the box on line 31, and enter any penalty on this line. Line 32. Amount Owed If the cooperative cannot pay the full amount of tax owed, it can apply for an installment agreement online. The cooperative can apply for an installment agreement online if: It cannot pay the full amount shown on line 32, The total amount owed is $25,000 or less, and The cooperative can pay the liability in full in 24 months. To apply using the Online Payment Agreement Application, go to IRS.gov/OPA. Under an installment agreement, the cooperative can pay what it owes in monthly installments. There are certain conditions that must be met to enter into and maintain an installment agreement, such as paying the liability within 24 months and making all required deposits and timely filing tax returns during the length of the agreement. If the installment agreement is accepted, the cooperative will be charged a fee and it will be subject to penalties and interest on the amount of tax not paid by the due date of the return. Line 34. Refund Enter the amount of any overpayment that should be refunded or applied to next year's estimated tax. Note. This election to apply some or all of the overpayment amount to the cooperative's 2023 estimated tax cannot be changed at a later date. Direct deposit of refund. If the cooperative has a refund of $1 million or more and wants it directly deposited into its checking or savings account at any U.S. bank or other financial institution instead of having a check sent to the cooperative, complete Form 8302 and attach it to the cooperative's tax return. Schedule C. Dividends, Inclusions, and Special Deductions Note. Do not report income from patronage dividends on Schedule C. Report income from patronage dividends and per-unit retain allocations on page 1, line 9. For purposes of the 20% ownership test on lines 1 through 7, the percentage of stock owned by the cooperative is based on voting power and value of the stock. Preferred stock described in section 1504(a)(4) is not taken into account. Consolidated returns. Cooperatives filing a consolidated return should see Regulations sections 1.1502-13, 1.1502-26, and 1.1502-27 before completing Schedule C. Cooperatives filing a consolidated return must not report as dividends on Schedule C any amounts received from corporations within the consolidated group. Such dividends are eliminated in consolidation rather than offset by the dividends-received deduction. Line 1, Column (a) Enter dividends (except those received on certain debt-financed stock acquired after July 18, 1984—see section 246A) that are: Received from less-than-20%-owned domestic corporations subject to income tax, and Qualified for the 50% deduction under section 243(a)(1). Also, include on line 1 the following. Taxable distributions from an interest charge domestic international sales corporation (IC-DISC) or former domestic international sales corporation (former DISC) that are designated as eligible for the 50% deduction and certain dividends of Federal Home Loan Banks. See section 246(a)(2). Dividends (except those received on debt-financed stock acquired after July 18, 1984) from a RIC. The amount of dividends eligible for the dividends-received deduction under section 243 is limited by section 854(b). The cooperative should receive a notice from the RIC specifying the amount of dividends that qualify for the deduction. Report so-called dividends or earnings received from mutual savings banks, etc., as interest. Do not treat them as dividends. Line 2, Column (a) Enter on line 2: Dividends (except those received on certain debt-financed stock acquired after July 18, 1984) that are received from 20%-or-more-owned domestic corporations subject to income tax and that are subject to the 65% deduction under section 243(c), and Taxable distributions from an IC-DISC or former DISC that are considered eligible for the 65% deduction. Line 3, Column (a) Enter the following. Dividends received on certain debt-financed stock acquired after July 18, 1984, from domestic and foreign corporations subject to income tax that would otherwise be subject to the dividends-received deduction under section 243(a)(1), 243(c), or 245(a). Generally, debt-financed stock is stock that the cooperative acquired by incurring a debt (for example, it borrowed money to buy the stock). Dividends received from a RIC on debt-financed stock. The amount of dividends eligible for the dividends-received deduction is limited by section 854(b). The cooperative should receive a notice from the RIC specifying the amount of dividends that qualify for the deduction. Line 3, Columns (b) and (c) Dividends received on certain debt-financed stock acquired after July 18, 1984, are not entitled to the full 50% or 65% dividends-received deduction under section 243 or 245(a). The 50% or 65% deduction is reduced by a percentage that is related to the amount of debt incurred to acquire the stock. See section 246A. Also, see section 245(a) before making this computation for an additional limitation that applies to certain dividends received from foreign corporations. Attach a statement to Form 1120-C showing how the amount on line 3, column (c), was figured. Line 4, Column (a) Enter dividends received on preferred stock of a less-than-20%-owned public utility that is subject to income tax and is allowed the 23.3% deduction provided in sections 244 and 247 (as affected by P.L. 113-295, Div. A, section 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043) for dividends paid. Line 5, Column (a) Enter dividends received on preferred stock of a 20%-or-more-owned public utility that is subject to income tax and is allowed the 26.7% deduction provided in sections 244 and247 (as affected by P.L. 113-295, Div. A, section 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043) for dividends paid. Line 6, Column (a) Enter the U.S.-source portion of dividends that: Are received from less-than-20%-owned foreign corporations, and Qualify for the 50% deduction under section 245(a). To qualify for the 50% deduction, the cooperative must own at least 10% of the stock of the foreign corporation by vote and value. Also, include dividends received from a less-than-20%-owned foreign sales corporation (FSC) that: Are attributable to income treated as effectively connected with the conduct of a trade or business within the United States (excluding foreign trade income), and Qualify for the 50% deduction under section 245(c)(1)(B). Line 7, Column (a) Enter the U.S.-source portion of dividends that: Are received from 20%-or-more-owned foreign corporations, and Qualify for the 65% deduction under sections 245(a) and 243. Also, include dividends received from a 20%-or-more-owned FSC that: Are attributable to income treated as effectively connected with the conduct of a trade or business within the United States (excluding foreign trade income), and Qualify for the 65% deduction under section 245(c)(1)(B). Line 8, Column (a) Enter dividends received from wholly owned foreign subsidiaries that are eligible for the 100% deduction under section 245(b). In general, the deduction under section 245(b) applies to dividends paid out of the earnings and profits of a foreign corporation for a tax year during which: All of its outstanding stock is directly or indirectly owned by the domestic cooperative receiving the dividends, and All of its gross income from all sources is effectively connected with the conduct of a trade or business within the United States. Line 9, Column (c) Generally, line 9, column (c), cannot exceed the amount from the worksheet below. However, in a year in which an NOL occurs, this limitation does not apply even if the loss is created by the dividends-received deduction. See sections 172(d) and 246(b). Worksheet for Schedule C, line 9(keep for your records) 1. Refigure Form 1120-C, page 1, line 25a, without any deduction under section 199A, any adjustment under section 1059, and without any capital loss carryback to the tax year under section 1212(a)(1) _____ 2. Complete lines 10, 11, 12, and 13, column (c) and enter the total _____ 3. Subtract line 2 from line 1 _____ 4. Multiply line 3 by 65% (0.65) _____ 5. Add lines 2, 5, 7, and 8, column (c) and the part of the deduction on line 3, column (c), that is attributable to dividends 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; enter the amount from line 6 on line 9, column (c). Do not complete the rest of this worksheet _____ 7. Enter the total amount of dividends received from 20%-or-more-owned corporations that are included on lines 2, 3, 5, 7, and 8, column (a) _____ 8. Subtract line 7 from line 3 _____ 9. Multiply line 8 by 50% (0.50) _____ 10. Subtract line 5 from line 9, column (c) _____ 11. Enter the smaller of line 9 or line 10 _____ 12. Dividends-received deduction after limitation (section 246(b)). Add lines 6 and 11. Enter the result here and on line 9, column (c) _____ Line 10, Columns (a) and (c) Small business investment companies operating under the Small Business Investment Act of 1958 must enter dividends that are received from domestic corporations subject to income tax even though a deduction is allowed for the entire amount of those dividends. To claim the 100% deduction on line 10, column (c), the cooperative must file with its return a statement that it was a federal licensee under the Small Business Investment Act of 1958 at the time it received the dividends. Line 11, Columns (a) and (c) Enter only dividends that qualify under section 243(b) for the 100% dividends-received deduction described in section 243(a)(3). Cooperatives taking this deduction are subject to the provisions of section 1561. The 100% deduction does not apply to affiliated group members that are joining in the filing of a consolidated return. Line 12, Columns (a) and (c) Enter in column (a) dividends from FSCs that are attributable to foreign trade income and that are eligible for the 100% deduction provided in section 245(c)(1)(A). For cooperatives described in section 1381 that are engaged in the marketing of agricultural or horticultural products and are shareholders in a FSC, multiply the total dividends reported in column (a) by 16/23 (or, 0.6957) for the exempt portion of the dividends that are attributable to foreign trade income, and enter the amount in column (c). See sections 245(c)(2) and 923(a)(4)(repealed by P. L. 106-519, section 2, Nov. 15, 2000) for additional information. Line 13, Column (a) Enter the foreign-source portion of dividends that: Are received from a specified 10%-owned foreign corporation (as defined in section 245A(b)), including, for example, gain from the sale of stock of a foreign corporation that is treated as a dividend under section 1248(a) and (j); and Qualify for the section 245A deduction. Line 14, Column (a) Enter foreign dividends not reportable on lines 3, 6, 7, 8, 11, 12, or 13 of column (a). Include on line 14 the foreign-source portion of any dividend that does not qualify for the section 245A deduction (for example, hybrid dividends within the meaning of section 245A(e), ineligible amounts of dividends within the meaning of Regulations section 1.245A-5(b), dividends that fail to meet the holding period requirement under section 246(c)(5), etc.). Also, include on line 14 the cooperative's share of distributions from a section 1291 fund from Form 8621, to the extent that the amounts are taxed as dividends under section 301. See Form 8621 and the Instructions for Form 8621. Attach a statement identifying the amount of each dividend reported on line 14 and the provision pursuant to which a deduction is not allowed with respect to such dividend. Line 15 Reserved for future use. Line 16a, Column (a) Enter the foreign-source portion of any subpart F inclusions attributable to the sale or exchange by a CFC of stock in another foreign corporation described in section 964(e)(4). This should equal the sum of the amounts reported by the U.S. shareholder on Form(s) 5471, Schedule I, line 1a. (Do not include on line 16a any portion of such subpart F inclusion that is not eligible for the section 245A deduction pursuant to Regulations section 1.245A-5(g)(2). Include such amounts on line 16c.) Line 16b, Column (a) Enter the total subpart F inclusions attributable to tiered hybrid dividends. This should equal the sum of the amounts reported by the U.S. shareholder on Form(s) 5471, Schedule I, line 1b. Line 16c, Column (a) Enter all other amounts included in income under section 951. This should equal the sum of the amounts reported by the U.S. shareholder on Form(s) 5471, Schedule I, lines 1(c) through 1(h), 2, and 4. Line 17, Column (a) Enter amounts included in income under section 951A. See Form 8992, Part II, line 5, and the Instructions for Form 8992. Also, if applicable, attach Form(s) 5471. Note. Consider the applicability of section 951A with respect to CFCs owned by domestic partnerships in which the cooperative has an interest. Line 18, Column (a) Include gross-up for taxes deemed paid under section 960. Line 19, Column (a) Enter taxable distributions from an IC-DISC or former DISC that are designated as not eligible for a dividends-received deduction. No deduction is allowed under section 243 for a dividend from an IC-DISC or former DISC (as defined in section 992(a)) to the extent the dividend: Is paid out of the cooperative's accumulated IC-DISC income or previously taxed income, or Is a deemed distribution under section 995(b)(1). Line 20, Column (a) Include the following. 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. Dividends from tax-exempt organizations. 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 not eligible for a dividends-received deduction, which include the following. Dividends received on any share of stock held for less than 46 days during the 91-day period beginning 45 days before the ex-dividend date. When counting the number of days the cooperative held the stock, you cannot count certain days during which the cooperative's risk of loss was diminished. See section 246(c)(4) and Regulations section 1.246-5 for more details. Dividends received on any share of preferred stock, which are attributable to periods totaling more than 366 days, if such stock was held for less than 91 days during the 181-day period that began 90 days before the ex-dividend date. When counting the number of days the cooperative held the stock, you cannot count certain days during which the cooperative's risk of loss was diminished. See section 246(c)(4) and Regulations section 1.246-5 for more details. Preferred dividends attributable to periods totaling less than 367 days are subject to the 46-day holding period rule above. Dividends on any share of stock to the extent the cooperative is under an obligation (including a short sale) to make related payments with respect to positions in substantially similar or related property. Any other taxable dividend income not properly reported elsewhere on Schedule C. Line 21, Column (c) Section 247 (as affected by P.L. 113-295, Div. A, section 221(a)(41)(A), Dec. 19, 2014, 128 Stat. 4043) allows public utilities a deduction of 40% of the smaller of (a) dividends paid on their preferred stock during the tax year, or (b) taxable income computed without regard to this deduction. In a year in which an NOL occurs, compute the deduction without regard to section 247(a)(1)(B). Line 22, Column (c) Enter the section 250 deduction claimed for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). This should equal the sum of Form 8993, Part III, lines 28 and 29. Schedule G. Allocation of Patronage and Nonpatronage Income and Deductions If the cooperative's total receipts (page 1, line 1a plus lines 4 through 9) for the tax year and its total assets at the end of the tax year are less than $250,000, the cooperative is not required to complete Schedule G. See Schedule K, Question 14. Cooperatives are required to allocate income and deductions between patronage and nonpatronage business. If the transaction producing the income merely enhances the overall profitability of the cooperative, being merely incidental to the cooperative's operation, the income is from a nonpatronage source. But if the source of income or loss is from an activity that is an integral part of the cooperative's business (such as inventory), then the source may be patronage. Special rules also apply if a cooperative has acquired the assets of another cooperative under a section 381(a) transaction. Cooperatives may elect to net earnings against losses under section 1388(j) and still be eligible for tax-exempt treatment. Line 6 For agricultural and horticultural cooperatives only, special rules apply in determining and reporting the section 199A(g) deduction. See the instructions for page 1, line 22. Also, see the Instructions for Form 8903. Line 8, Columns (a) and (b) Complete Schedule H before entering an amount on this line. Allocate the amount on Schedule H, line 5, between patronage and nonpatronage. Only farmers' cooperatives exempt under section 521 are allowed to take a deduction in column (b) for nonpatronage distributions under section 1382(c). Line 9a, Columns (a) and (b) Compute and carry back or carry over patronage and nonpatronage NOLs separately. Under section 1388(j)(1), cooperatives can use losses from one or more allocation units to offset earnings of one or more other allocation units, as permitted by their bylaws, but only to the extent that the earnings and losses are from business done with or for patrons. If a cooperative exercises this option, it must provide the information specified in section 1388(j)(3) in a written notice to its patrons. Line 9b, Columns (a) and (b) Allocate the amount of total special deductions reported on Schedule C, line 20, between patronage and nonpatronage business. Line 10, Columns (a) and (b) The taxable income reported on page 2, line 27, may not be less than the nonpatronage taxable income shown on Schedule G, line 10 (column b). Line 11, Column (a) Combine lines 10(a) and 10(b). Note. Any patronage source losses (line 10, column (a)) cannot be used to offset nonpatronage income (line 10, column (b)). Line 12, Column (a) Enter any unused patronage loss from line 10, column (a). Line 13, Column (b) Enter any unused nonpatronage loss from line 10, column (b). Schedule H. Deductions and Adjustments Under Section 1382 Line 1. Dividends Paid on Capital Stock (Section 521 Cooperatives Only) Enter the amount actually or constructively paid as dividends during the tax year on: Common stock (whether voting or nonvoting), Preferred stock, Capital retain certificates, Revolving fund certificates, Letters of advice, or Other documentary evidence of a proprietary interest in the cooperative association. See Regulations section 1.1382-3(b) for more information. Line 2. Nonpatronage Income Allocated to Patrons (Section 521 Cooperatives Only) Enter nonpatronage income allocated to patrons. Payment may be in: Money, Qualified written notices of allocation, or Other property (except nonqualified written notices of allocation). The amounts must be paid during the payment period that begins on the first day of the tax year and ends on the 15th day of the 9th month after the end of the tax year in which the income was earned. Nonpatronage income. Nonpatronage income includes incidental income from sources not directly related to: Marketing, purchasing, or service activities of the cooperative; or Income from business done with or for the U.S. Government, or any of its agencies. See the instructions for line 3b for a definition of “qualified written notice of allocation.” See section 1382(c)(2)(B) for deductibility of amounts paid in redemption of nonqualified written notices of allocation. See section 1388(d) for a definition of a nonqualified written notice of allocation. Line 3. Patronage Dividends To be deductible, patronage dividends must be paid during the payment period that begins on the first day of the tax year in which the patronage occurs and ends on the 15th day of the 9th month after the end of that tax year. See sections 1382(e) and (f) for special rules for the time when patronage occurs if products are marketed under a pooling arrangement, or if earnings are includible in the gross income of the cooperative for a tax year after the year in which the patronage occurred. Patronage dividends include any amount paid to a patron by a cooperative based on the quantity or value of business done with or for that patron under a pre-existing obligation to pay that amount. The amount is determined by reference to the net earnings of the organization from business done with or for its patrons. Note. Net earnings are not reduced by dividends paid on capital stock of the organization if there is a legally enforceable agreement that such dividends are in addition to amounts otherwise payable to patrons derived from business done with or for patrons. Patronage dividends may be paid in: Money, Qualified written notices of allocation, or Other property (except nonqualified written notices of allocation). Line 3b. Qualified written notices of allocation. A written notice of allocation means: Any capital stock, Revolving fund certificate, Retain certificate, Certificate of indebtedness, Letter of advice, or Other written notice, which states the dollar amount allocated to the patron by the cooperative and the part, if any, which is a patronage dividend. In general, a qualified written notice of allocation is a written notice of allocation that is: Paid as part of a patronage dividend, in money or by qualified check equal to at least 20% of the patronage dividend, and One of the following conditions is met: The patron must have at least 90 days from the date the written notice of allocation is paid to redeem it in cash, and must receive written notice of the right of redemption at the time the patron receives the allocation; or The patron must agree to have the allocation treated as constructively received and reinvested in the cooperative. See section 1388(c)(2) and the related regulations for information on how this consent must be made. Line 3d. Nonqualified written notices of allocation. If a written notice of allocation does not qualify, no deduction is allowable at the time it is issued. However, the cooperative is entitled to a deduction or refund of tax when the nonqualified written notice of allocation is finally redeemed, if that notice was paid as a patronage dividend during the payment period for the tax year during which the patronage occurred. The deduction or refund is allowed, but only to the extent that amounts paid to redeem the nonqualified written notices of allocation are paid in money or other property (other than written notices of allocation) which do not exceed the stated dollar amounts of the nonqualified written notices of allocation. See section 1382(b), Regulations section 1.1382-2, and section 1383. See section 1383 for special rules for figuring the cooperative's tax in the year nonqualified written notices of allocation are redeemed. The cooperative is entitled to: A deduction in the tax year the nonqualified written notices of allocation are redeemed (if permitted under section 1382(b)(2) or section 1382(c)(2)(B)), or A tax credit based on a recomputation of tax for the year(s) the nonqualified written notices of allocation were issued. See the instructions for page 2, line 30h. Amounts paid to patrons are not patronage dividends if paid: Out of earnings not from business done with or for patrons; Out of earnings from business done with or for other patrons to whom no amounts or smaller amounts are paid for substantially identical transactions; To redeem capital stock, certificates of indebtedness, revolving fund certificates, retain certificates, letters of advice, or other similar documents; or Without reference to the net earnings of the cooperative organization from business done with or for its patrons. Line 4. Section 199A(g) deduction allocated to patrons. For agricultural and horticultural cooperatives only, cooperatives engaged in the marketing or manufacture, production, growth, or extraction of agricultural or horticultural products may be eligible to compute a deduction under section 199A(g). See the instructions for page 1, line 22. An agricultural or horticultural cooperative, as defined in section 199A(g), must reduce its section 1382 deduction by the amount of the section 199A(g) deduction that was passed through to patrons. Note. Only include on line 4 the portion of the section 199A(g) deduction attributable to the qualified payments reported on this schedule. Marketing cooperatives that distribute patronage as per-unit retain allocations must attach a statement showing the amount of the section 199A(g) deduction attributable to the per-unit retain allocations. Schedule J. Tax Computation Line 1. Members of a Controlled Group If the cooperative is a member of a controlled group, check the box on line 1. Complete and attach Schedule O (Form 1120), Consent Plan and Apportionment Schedule for a Controlled Group. Component members of a controlled group must use Schedule O to report the apportionment of certain tax benefits between the members of the group. See Schedule O and the Instructions for Schedule O (Form 1120) for more information. Line 2. Income Tax Multiply taxable income by 21%. Enter this amount on line 2. Deferred tax under section 1291. If the cooperative was a shareholder in a PFIC and received an excess distribution or disposed of its investment in the PFIC during the year, it must include the increase in taxes due under section 1291(c)(2) (from Form 8621) in the total for line 2. On the dotted line next to line 2, enter “Section 1291” and the amount. Do not include on line 2 any interest due under section 1291(c)(3). Instead, include the amount of interest owed on Schedule J, line 8, as other interest. For more information on reporting the deferred tax and interest, see the Instructions for Form 8621. Increase in tax attributable to partner's audit liability under section 6226. If the cooperative is filing Form 8978 to report adjustments shown on Form 8986 they received from partnerships which have been audited and have elected to push out imputed underpayments to their partners, include any increase in taxes due (positive amount) from Form 8978, line 14, in the total for Form 1120-C, Schedule J, line 2. On the dotted line next to line 2, enter "FROM FORM 8978" and the amount. Attach Form 8978. If Form 8978, line 14, shows a decrease in tax, see the instructions for Schedule J, line 6 . Line 3. Base Erosion Minimum Tax If the cooperative had gross receipts of at least $500 million in any 1 of the 3 tax years preceding the current tax year, complete and attach Form 8991. Enter on line 3 the base erosion minimum tax amount from Form 8991, Part IV, line 5e. See section 59A and the Instructions for Form 8991. Also, see Schedule K, Question 16 , later. Line 5a. Foreign Tax Credit To find out when a cooperative can take the credit for payment of income tax to a foreign country or U.S. possession, see Form 1118, Foreign Tax Credit—Corporations. Line 5b. Qualified Electric Vehicle Credit Enter any qualified electric vehicle passive activity credits from prior years allowed for the current tax year from Form 8834, Qualified Electric Vehicle Credit, line 7. Attach Form 8834. Line 5c. General Business Credit Enter on line 5c the allowable credit from Form 3800, Part II, line 38. The cooperative is required to file Form 3800 to claim any of the business credits. See the Instructions for Form 3800 for exceptions. For a list of allowable credits, see Form 3800. Also, see the applicable credit form and its instructions. Elective allocations to patrons of subchapter T cooperatives. The cooperative may elect to allocate any or all of certain credits among the patrons based on the quantity or value of business done with or for such patrons. This includes the following, if applicable: Biofuel producer credit (Form 6478); Renewable electricity, refined coal, and Indian coal production credit (Form 8835); Biodiesel, renewable diesel, or sustainable aviation fuels credit (Form 8864); and Low sulfur diesel fuel production credit (Form 8896). For the allocation to take effect, the cooperative must designate the apportionment in a written notice mailed to its patrons before the due date of the cooperative's return. The credit amount allocated to patrons cannot be included on line 5c. Once made, the election cannot be revoked. For more information, see the instructions for the applicable credit form. Also, see the Instructions for Form 3800. For tax associated with a decrease in the credit allocated to patrons, see Other Taxes, later. Required allocations to patrons of subchapter T cooperatives. Any excess of the certain credits that are not used by the cooperative because of the tax liability limitation must be passed through to the patrons. This includes the following credits, if applicable. Investment credit (Form 3468). Work opportunity credit (Form 5884). Empowerment zone employment credit (Form 8844). Indian employment credit (Form 8845). Credit for employer differential wage payments (Form 8932). Credit for small employer health insurance premiums (Form 8941). These credits cannot be carried back or over by the cooperative. See the applicable form and related instructions for details. For tax associated with a recapture of credit, see Other Taxes, later. Line 5d. Credit for Prior Year Minimum Tax To figure any allowable minimum tax credit and any carryforward of that credit, use Form 8827. Line 5e. Bond Credits Enter 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 cooperative is filing Form 8978 to report adjustments shown on Form 8986 they received from partnerships which have been audited and have elected to push out imputed underpayments to their partners, include any decrease in taxes due (negative amount) from Form 8978, line 14, in the total for Form 1120-C, Schedule J, line 6. On the dotted line next to line 6, enter "FROM FORM 8978" and the amount. Attach Form 8978. If Form 8978, line 14, shows an increase in tax, see the instructions for Schedule J, line 2. Line 8. Other Taxes Include any of the following taxes and interest in the total on line 8. Check the appropriate box(es) for the form, if any, used to compute the total. Recapture of investment credit. If the cooperative disposed of investment credit property or changed its use before the end of its useful life or recovery period, or is required to recapture a qualifying therapeutic discovery project grant, enter the increase in tax from Form 4255, Recapture of Investment Credit. See the Instructions for Form 4255. Recapture of low-income housing credit. If the cooperative disposed of property (or there was a reduction in the qualified basis of the property) for which it took the low-income housing credit and the cooperative did not follow the procedures that would have prevented recapture of the credit, it may owe a tax. See Form 8611, Recapture of Low-Income Housing Credit. Alternative tax on qualifying shipping activities. Enter any alternative tax on qualifying shipping activities from Form 8902. Check the box for Form 8902. Other. Check the box for “Other” if the cooperative includes any additional taxes and interest such as the items discussed below. If the cooperative checked the “Other” box, attach a statement showing the computation of each item included in the total for line 8 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 (a) installment sales of certain timeshares and residential lots (section 453(l)(3)), and (b) certain nondealer installment obligations (section 453A(c)). Interest due on deferred gain (section 1260(b)). Interest due under section 1291(c)(3). See Form 8621 and the Instructions for Form 8621. Recapture of elective allocation of credit to patrons. If the amount of any of the following elective credits apportioned to any patron is decreased, there is a tax imposed on the cooperative, not the patron. Biofuel producer credit (Form 6478). See section 40(g)(6)(B)(iii). Renewable electricity, refined coal, and Indian coal production credit (Form 8835). See section 45(e)(11)(C). Biodiesel, renewable diesel, or sustainable aviation fuels credit (Form 8864). See section 40A(e)(6)(B)(iii). Low sulfur diesel fuel production credit (Form 8896). See section 45H(f)(3). For details on the recapture of the credits, see the instructions for the applicable form. Recapture of required excess credit allocated to patrons. If the cooperative allocated excess credit to patrons, any credit recapture applies as if the cooperative had claimed the entire credit. For details, see section 46(h) (as in effect prior to enactment of the Revenue Reconciliation Act of 1990). This applies to the following credits. Investment credit (Form 3468). Work opportunity credit (Form 5884). Empowerment zone employment credit (Form 8844). Indian employment credit (Form 8845). Credit for small employer health insurance premiums (Form 8941). Credit for employer differential wage payments (Form 8932). Alternative minimum tax (AMT). Applicable cooperatives subject to AMT under section 59(k), if filing a return for a short tax year that begins in 2023 and ends in 2023, include on line 8 any AMT imposed under section 55, as amended by the Inflation Reduction Act of 2022. On the dotted line next to line 8, enter “CAMT” and the AMT amount. Attach a detailed statement showing the computation of the AMT. Include a computation of adjusted financial statement income. Label the statement “CAMT.” Line 9. Total Tax Include any deferred tax on the termination of a section 1294 election applicable to shareholders in a qualified electing fund in the amount entered on line 9. See the Instructions for Form 8621. Subtract any deferred tax on the cooperative's share of undistributed earnings of a qualified electing fund. See the Instructions for Form 8621. How to report. If deferring tax, attach a statement showing the computation of each item included in, or subtracted from, the total for line 9. On the dotted line next to line 9, specify (a) the applicable Code section, (b) the type of tax, and (c) the amount of tax. Schedule K. Other Information Complete all items and questions that apply to the cooperative. Item 2 See the list of Principal Business Activity Codes, later. Using the list of codes and activities, determine from which activity the cooperative derives the highest percentage of its total receipts. Enter on lines 2a, 2b, and 2c the principal business activity code number, the cooperative's business activity, and a description of the principal product or service of the cooperative. For nonstore retailers, select the PBA code by the primary product that your establishment sells. For example, establishments primarily selling prescription and non-prescription drugs, select PBA code 456110 Pharmacies & Drug Retailers. Question 5 Check the “Yes” box for Question 5 if: The cooperative is a subsidiary in an affiliated group (defined later), but is not filing a consolidated return for the tax year with that group, or The cooperative is a subsidiary in a parent-subsidiary controlled group. For a definition of a parent-subsidiary controlled group, see the Instructions for Schedule O (Form 1120). Any cooperative that meets either of the above requirements should check the “Yes” box. This applies even if the cooperative is a subsidiary member of one group and the parent corporation of another. Note. If the cooperative is an “excluded member” of a controlled group (see definition in the Instructions for Schedule O (Form 1120)), it is still considered a member of a controlled group for this purpose. Affiliated group. An affiliated group is one or more chains of includible corporations (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. The common parent must own directly stock that represents at least 80% of the total voting power and at least 80% of the total value of the stock of at least one of the other includible corporations, and Stock that represents at least 80% of the total voting power and at least 80% of the total value of the stock of each of the other corporations (except for the common parent) must be owned directly by one or more of the other includible corporations. For this purpose, “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). Item 7 Enter the cooperative's total assets (as determined by the accounting method regularly used in keeping the cooperative's books and records) at the end of the tax year. If there are no assets at the end of the tax year, enter -0-. If the cooperative is required to complete Schedule L, enter total assets from Schedule L, line 13, column (d). If filing a consolidated return, report total consolidated assets for all cooperatives and corporations joining in the return. Question 8 Check the “Yes” box if one foreign person owned at least 25% of (a) the total voting power of all classes of stock of the cooperative entitled to vote, or (b) the total value of all classes of stock of the cooperative. The constructive ownership rules of section 318 apply in determining if a cooperative is foreign owned. See section 6038A(c)(5) and the related regulations. If the cooperative checked “Yes,” enter on line 8a the percentage owned by the foreign person specified in Question 8. On line 8b, enter the name of the owner's country. Note. If there is more than one 25%-or-more foreign owner, complete lines 8a and 8b for the foreign person with the highest percentage of ownership. 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. possession who is not otherwise a citizen or resident of the United States; Any partnership, association, company, or corporation that is not created or organized in the United States; Any foreign estate or trust within the meaning of section 7701(a)(31); or A foreign government (or one of its agencies or instrumentalities) to the extent that it is engaged in the conduct of a commercial activity, as described in section 892. However, the term “foreign person” does not include any foreign person who consents to the filing of a joint income tax return. Owner's country. For individuals, the term “owner's country” means the country of residence. For all others, it is the country where incorporated, organized, created, or administered. Requirement to file Form 5472. If the cooperative checked “Yes,” it may have to file Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. Generally, a 25% foreign-owned cooperative that had a reportable transaction with a foreign or domestic related party during the tax year must file Form 5472. See the Instructions for Form 5472 for filing instructions and penalties for failure to file. Item 10 Show any tax-exempt interest received or accrued. Include any exempt-interest dividends received as a shareholder in a mutual fund or other RIC. Also, if required, include the same amount on Schedule M-1, line 7 (or Schedule M-3 (Form 1120), Part II, line 13, if applicable). Item 12 Generally, if the cooperative has an NOL for tax year 2022, it can elect to waive the entire carryback period for the NOL and instead carry the NOL forward to future tax years. To do so, check the box in Item 12 and file the return by its due date, including extensions. Do not attach the statement described in Temporary Regulations section 301.9100-12T. Once made, the election is irrevocable. If the cooperative timely filed its return for the loss year without making the election, it can make the election on an amended return filed within 6 months of the due date of the loss year return (excluding extensions). Attach the election to the amended return and write “Filed pursuant to section 301.9100-2” on the election statement. See the Instructions for Form 1139. Cooperatives filing a consolidated return that elect to waive the entire carryback period for the group must check the box in Item 12 and attach the statement required by Regulations section 1.1502-21(b)(3) or the election will not be valid. Item 13 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 2022. Do not reduce the amount by any NOL deduction reported on page 1, line 26a. Question 16 If the cooperative had gross receipts of at least $500 million in any 1 of the 3 preceding tax years, complete Form 8991 and attach it to this return. For this purpose, the cooperative's gross receipts include the gross receipts of all persons aggregated with the cooperative, as specified in section 59A(e)(3). See the Instructions for Form 8991 to determine if the cooperative is subject to the base erosion minimum tax. Question 17 The limitation on business interest expense applies to every taxpayer with a trade or business, unless the taxpayer meets certain specified exceptions. A taxpayer may elect out of the limitation for certain businesses otherwise subject to the business interest expense limitation. See Question 18 . Also, see the Instructions for Form 8990. Certain real property trades or businesses and farming businesses qualify to make an election not to limit business interest expense. This is an irrevocable election. If you make this election, you are required to use the alternative depreciation system to depreciate any nonresidential real property, residential rental property, and qualified improvement property for an electing real property trade or business, and any property with a recovery period of 10 years or more for an electing farming business. See section 168(g)(1)(F). Also, you are not entitled to the special depreciation allowance for that property. For a taxpayer with more than one qualifying business, the election is made with respect to each business. Check “Yes” if the taxpayer has an election in effect to exclude a real property trade or business or a farming business from section 163(j). For more information, see section 163(j) and the Instructions for Form 8990. Question 18 Generally, a taxpayer with a trade or business must file Form 8990 to claim a deduction for business interest. In addition, Form 8990 must be filed by any taxpayer that owns an interest in a partnership with current year, or prior year carryover, excess business interest expense allocated from the partnership. Exclusions from filing. A taxpayer is not required to file Form 8990 if the taxpayer is a small business taxpayer and does not have excess business interest expense from a partnership. A taxpayer is also not required to file Form 8990 if the taxpayer only has business interest expense from these excepted trades or businesses: An electing real property trade or business, An electing farming business, or Certain utility businesses. Small business taxpayer. A small business taxpayer is not subject to the business interest expense limitation and is not required to file Form 8990. A small business taxpayer is a taxpayer that (a) is not a tax shelter (as defined in section 448(d)(3)), and (b) meets the gross receipts test of section 448(c), discussed next. Gross receipts test. For 2022, a taxpayer meets the gross receipts test if the taxpayer has average annual gross receipts of $27 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. Schedule L. Balance Sheets per Books The balance sheets should agree with the cooperative's books and records. Cooperatives with total receipts (page 1, line 1a plus lines 4 through 9) and total assets at the end of the tax year less than $250,000 are not required to complete Schedules L, M-1, and M-2 if the “Yes” box on Schedule K, Question 14, is checked. Cooperatives with total assets non-consolidated (or consolidated for all cooperatives and corporations included within the consolidated tax group) of $10 million or more on the last day of the tax year must file Schedule M-3 (Form 1120). However, see the instructions for Schedule M-1, later. See the separate Instructions for Schedule M-3 (Form 1120) for provisions that also affect Schedule L. If filing a consolidated return, report total consolidated assets, liabilities, and shareholder's equity for all cooperatives and corporations joining in the return. See Consolidated return, earlier. Line 1. Cash Include certificates of deposit as cash on this line. Line 5. Investments Include on this line: State and local government obligations, the interest on which is excludable from gross income under section 103(a); and Stock in a mutual fund or other RIC that distributed exempt-interest dividends during the tax year of the cooperative. Line 26. Adjustments to Shareholders' Equity Some examples of adjustments to report on this line include: Unrealized gains and losses on securities held “available for sale.” Foreign currency translation adjustments. The excess of additional pension liability over unrecognized prior service cost. Guarantees of employee stock (ESOP) debt. Compensation related to employee stock award plans. If the total adjustment to be entered on line 26 is a negative amount, enter the amount in parentheses. Schedule M-1. Reconciliation of Income (Loss) per Books With Income per Return In completing Schedule M-1, the following apply. Cooperatives with total receipts (page 1, line 1a plus lines 4 through 9) and total assets at the end of the tax year less than $250,000 are not required to complete Schedules L, M-1, and M-2 if the “Yes” box on Schedule K, Question 14, is checked. Cooperatives with total assets non-consolidated (or consolidated for all cooperatives/corporations included with the tax consolidation group) of $10 million or more on the last day of the tax year must file Schedule M-3 (Form 1120) instead of Schedule M-1. A cooperative filing Form 1120-C that is not required to file Schedule M-3 (Form 1120) may voluntarily file Schedule M-3 instead of Schedule M-1. Cooperatives that (a) are required to file Schedule M-3 (Form 1120) and have less than $50 million total assets at the end of the tax year, or (b) are not required to file Schedule M-3 (Form 1120) and voluntarily file Schedule M-3 (Form 1120), must either (i) complete Schedule M-3 (Form 1120) entirely, or (ii) complete Schedule M-3 (Form 1120) through Part I, and complete Form 1120, Schedule M-1 instead of completing Parts II and III of Schedule M-3 (Form 1120). If the cooperative chooses to complete Schedule M-1 instead of completing Parts II and III of Schedule M-3, the amount on Schedule M-1, line 1, must equal the amount on Schedule M-3, Part I, line 11. See the Instructions for Schedule M-3 (Form 1120) for more information. Line 5c. Travel and Entertainment Include any of the following if applicable: Meal expenses not deductible under section 274(n). Entertainment expenses not deductible under section 274(a). Qualified transportation fringes not deductible under section 274(a)(4). Expenses for the use of an entertainment facility. The part of business gifts over $25. Expenses of an individual over $2,000, which are allocable to conventions on cruise ships. Employee achievement awards of non-tangible property or of tangible property over $400 ($1,600 if part of a qualified plan). Nondeductible club dues. The part of luxury water travel expenses not deductible under section 274(m). Expenses for travel as a form of education. Other nondeductible expenses for travel and entertainment. Line 7. Tax-exempt Interest Report any tax-exempt interest received or accrued, including any exempt-interest dividends received as a shareholder in a mutual fund or other RIC. Also, report this same amount on Schedule K, Item 10. Instructions for Form 1120-C - Notices Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. 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. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or write to the Internal Revenue Service, Tax Forms and Publications Division, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send Form 1120-C to this address. Instead, see Where To File, earlier. Instructions for Form 1120-C - Additional Material Form 1120-C Principal Business Activity Codes This list of principal business activities and their associated codes is designed to classify an enterprise by the type of activity in which it is engaged to facilitate the administration of the Internal Revenue Code. These principal business activity codes are based on the North American Industry Classification System. Using the list of activities and codes below, determine from which activity the company derives the largest percentage of its “total receipts.” Total receipts is defined as the sum of gross receipts or sales (page 1, line 1a) plus all other income (page 1, lines 4 through 10). If the company purchases raw materials and supplies them to a subcontractor to produce the finished product, but retains title to the product, the company is considered a manufacturer and must use one of the manufacturing codes (311110–339900). Once the principal business activity is determined, entries must be made on Form 1120-C, Schedule K, lines 2a, 2b, and 2c. On line 2a, enter the six-digit code selected from the list below. On line 2b, enter the company's business activity. On line 2c, enter a brief description of the principal product or service of the company. Agriculture, Forestry, Fishing, and Hunting Crop Production 111100 - Oilseed & Grain Farming111210 - Vegetable & Melon Farming (including potatoes & yams)111300 - Fruit & Tree Nut Farming111400 - Greenhouse, Nursery, & Floriculture Production111900 - Other Crop Farming (including tobacco, cotton, sugarcane, hay, peanut, sugar beet, & all other crop farming) Animal Production 112111 - Beef Cattle Ranching & Farming112112 - Cattle Feedlots112120 - Dairy Cattle & Milk Production112210 - Hog & Pig Farming112300 - Poultry & Egg Production112400 - Sheep & Goat Farming112510 - Aquaculture (including shellfish & finfish farms & hatcheries)112900 - Other Animal Production Forestry and Logging 113110 - Timber Tract Operations113210 - Forest Nurseries & Gathering of Forest Products113310 - Logging Fishing, Hunting, and Trapping 114110 - Fishing114210 - Hunting & Trapping Support Activities for Agriculture and Forestry 115110 - Support Activities for Crop Production (including cotton ginning, soil preparation, planting, & cultivating)115210 - Support Activities for Animal Production (including farriers)115310 - Support Activities for Forestry Mining 211120 - Crude Petroleum Extraction211130 - Natural Gas Extraction212110 - Coal Mining212200 - Metal Ore Mining212310 - Stone Mining & Quarrying212320 - Sand, Gravel, Clay, & Ceramic & Refractory Minerals Mining & Quarrying212390 - Other Nonmetallic Mineral Mining & Quarrying213110 - Support Activities for Mining Utilities 221100 - Electric Power Generation, Transmission & Distribution221210 - Natural Gas Distribution221300 - Water, Sewage, & Other Systems221500 - Combination Gas & Electric Construction Construction of Buildings 236110 - Residential Building Construction236200 - Nonresidential Building Construction Heavy and Civil Engineering Construction 237100 - Utility System Construction237210 - Land Subdivision237310 - Highway, Street, & Bridge Construction237990 - Other Heavy & Civil Engineering Construction Specialty Trade Contractors 238100 - Foundation, Structure, & Building Exterior Contractors (including framing carpentry, masonry, glass, roofing, & siding)238210 - Electrical Contractors238220 - Plumbing, Heating, & Air-Conditioning Contractors238290 - Other Building Equipment Contractors238300 - Building Finishing Contractors (including drywall, insulation, painting, wallcovering, flooring, tile, & finish carpentry)238900 - Other Specialty Trade Contractors (including site preparation) Manufacturing Food Manufacturing 311110 - Animal Food Mfg311200 - Grain & Oilseed Milling311300 - Sugar & Confectionery Product Mfg311400 - Fruit & Vegetable Preserving & Specialty Food Mfg311500 - Dairy Product Mfg311610 - Animal Slaughtering and Processing311710 - Seafood Product Preparation & Packaging311800 - Bakeries, Tortilla, & Dry Pasta Mfg311900 - Other Food Mfg (including coffee, tea, flavorings, & seasonings) Beverage and Tobacco Product Manufacturing 312110 - Soft Drink & Ice Mfg312120 - Breweries312130 - Wineries312140 - Distilleries312200 - Tobacco Manufacturing Textile Mills and Textile Product Mills 313000 - Textile Mills314000 - Textile Product Mills Apparel Manufacturing 315100 - Apparel Knitting Mills315210 - Cut & Sew Apparel Contractors315250 - Cut & Sew Apparel Mfg (except Contractors)315990 - Apparel Accessories & Other Apparel Mfg Leather and Allied Product Manufacturing 316110 - Leather & Hide Tanning & Finishing316210 - Footwear Mfg (including rubber & plastics)316990 - Other Leather & Allied Product Mfg Wood Product Manufacturing 321110 - Sawmills & Wood Preservation321210 - Veneer, Plywood, & Engineered Wood Product Mfg321900 - Other Wood Product Mfg Paper Manufacturing 322100 - Pulp, Paper, & Paperboard Mills322200 - Converted Paper Product Mfg Printing and Related Support Activities 323100 - Printing & Related Support Activities Petroleum and Coal Products Manufacturing 324110 - Petroleum Refineries (including integrated)324120 - Asphalt Paving, Roofing, & Saturated Materials Mfg324190 - Other Petroleum & Coal Products Mfg Chemical Manufacturing 325100 - Basic Chemical Mfg325200 - Resin, Synthetic Rubber, & Artificial & Synthetic Fibers & Filaments Mfg325300 - Pesticide, Fertilizer, & Other Agricultural Chemical Mfg325410 - Pharmaceutical & Medicine Mfg325500 - Paint, Coating, & Adhesive Mfg325600 - Soap, Cleaning Compound, & Toilet Preparation Mfg325900 - Other Chemical Product & Preparation Mfg Plastics and Rubber Products Manufacturing 326100 - Plastics Product Mfg326200 - Rubber Product Mfg Nonmetallic Mineral Product Manufacturing 327100 - Clay Product & Refractory Mfg327210 - Glass & Glass Product Mfg327300 - Cement & Concrete Product Mfg327400 - Lime & Gypsum Product Mfg327900 - Other Nonmetallic Mineral Product Mfg Primary Metal Manufacturing 331110 - Iron & Steel Mills & Ferroalloy Mfg331200 - Steel Product Mfg from Purchased Steel331310 - Alumina & Aluminum Production & Processing331400 - Nonferrous Metal (except Aluminum) Production & Processing331500 - Foundries Fabricated Metal Product Manufacturing 332110 - Forging & Stamping332210 - Cutlery & Handtool Mfg332300 - Architectural & Structural Metals Mfg332400 - Boiler, Tank, & Shipping Container Mfg332510 - Hardware Mfg332610 - Spring & Wire Product Mfg332700 - Machine Shops; Turned Product; & Screw, Nut, & Bolt Mfg332810 - Coating, Engraving, Heat Treating, & Allied Activities332900 - Other Fabricated Metal Product Mfg Machinery Manufacturing 333100 - Agriculture, Construction, & Mining Machinery Mfg333200 - Industrial Machinery Mfg333310 - Commercial & Service Industry Machinery Mfg333410 - Ventilation, Heating, Air-Conditioning, & Commercial Refrigeration Equipment Mfg333510 - Metalworking Machinery Mfg333610 - Engine, Turbine, & Power Transmission Equipment Mfg333900 - Other General Purpose Machinery Mfg Computer and Electronic Product Manufacturing 334110 - Computer & Peripheral Equipment Mfg334200 - Communications Equipment Mfg334310 - Audio & Video Equipment Mfg334410 - Semiconductor & Other Electronic Component Mfg334500 - Navigational, Measuring, Electromedical, & Control Instruments Mfg334610 - Manufacturing & Reproducing Magnetic & Optical Media Electrical Equipment, Appliance, and Component Manufacturing 335100 - Electric Lighting Equipment Mfg335200 - Household Appliance Mfg335310 - Electrical Equipment Mfg335900 - Other Electrical Equipment & Component Mfg Transportation Equipment Manufacturing 336100 - Motor Vehicle Mfg336210 - Motor Vehicle Body & Trailer Mfg336300 - Motor Vehicle Parts Mfg336410 - Aerospace Product & Parts Mfg336510 - Railroad Rolling Stock Mfg336610 - Ship & Boat Building336990 - Other Transportation Equipment Mfg Furniture and Related Product Manufacturing 337000 - Furniture & Related Product Manufacturing Miscellaneous Manufacturing 339110 - Medical Equipment & Supplies Mfg339900 - Other Miscellaneous Manufacturing Wholesale Trade Merchant Wholesalers and Durable Goods 423100 - Motor Vehicle & Motor Vehicle Parts & Supplies423200 - Furniture & Home Furnishings423300 - Lumber & Other Construction Materials423400 - Professional & Commercial Equipment & Supplies423500 - Metal & Mineral (except Petroleum)423600 - Household Appliances and Electrical & Electronic Goods423700 - Hardware, Plumbing, Heating Equipment & Supplies423800 - Machinery, Equipment, & Supplies423910 - Sporting & Recreational Goods & Supplies423920 - Toy & Hobby Goods & Supplies423930 - Recyclable Materials423940 - Jewelry, Watch, Precious Stone, & Precious Metals423990 - Other Miscellaneous Durable Goods Merchant Wholesalers and Nondurable Goods 424100 - Paper & Paper Products424210 - Drugs & Druggists' Sundries424300 - Apparel, Piece Goods, & Notions424400 - Grocery & Related Products424500 - Farm Product Raw Materials424600 - Chemical & Allied Products424700 - Petroleum & Petroleum Products424800 - Beer, Wine, & Distilled Alcoholic Beverages424910 - Farm Supplies424920 - Book, Periodical, & Newspapers424930 - Flower, Nursery Stock, & Florists' Supplies424940 - Tobacco Products & Electronic Cigarettes424950 - Paint, Varnish, & Supplies424990 - Other Miscellaneous Nondurable Goods Wholesale Trade Agents & Brokers 425120 - Wholesale Trade Agents & Brokers Retail Trade Motor Vehicle and Parts Dealers 441110 - New Car Dealers441120 - Used Car Dealers441210 - Recreational Vehicle Dealers441222 - Boat Dealers441227 - Motorcycle, ATV, and All Other Motor Vehicle Dealers441300 - Automotive Parts, Accessories, & Tire Retailers Furniture and Home Furnishings Retailers 449110 - Furniture Retailers449121 - Floor Covering Retailers449122 - Window Treatment Retailers449129 - All Other Home Furnishings Retailers Electronics and Appliance Retailers 449210 - Electronics & Appliance Retailers (including computers) Building Material and Garden Equipment and Supplies Dealers 444110 - Home Centers444120 - Paint & Wallpaper Retailers444140 - Hardware Retailers444180 - Other Building Material Dealers444200 - Lawn & Garden Equipment & Supplies Retailers Food and Beverage Retailers 445110 - Supermarkets and Other Grocery Retailers (except Convenience) 445131 - Convenience Retailers445132 - Vending Machine Operators445240 - Meat Retailers445250 - Fish & Seafood Retailers445230 - Fruit & Vegetable Retailers445291 - Baked Goods Retailers445292 - Confectionery & Nut Retailers445298 - All Other Specialty Food Retailers445320 - Beer, Wine, & Liquor Retailers Health and Personal Care Retailers 456110 - Pharmacies & Drug Retailers456120 - Cosmetics, Beauty Supplies, & Perfume Retailers456130 - Optical Goods Retailers456190 - Other Health & Personal Care Retailers Gasoline Stations & Fuel Dealers 457100 - Gasoline Stations (including convenience stores with gas) 457210 - Fuel Dealers (including Heating Oil & Liquefied Petroleum) Clothing and Accessories Retailers 458110 - Clothing & Clothing Accessories Retailers458210 - Shoe Retailers458310 - Jewelry Retailers458320 - Luggage & Leather Goods Retailers Sporting, Hobby, Book, Musical Instrument & Miscellaneous Retailers 459110 - Sporting Goods Retailers459120 - Hobby, Toy, & Game Retailers459130 - Sewing, Needlework, & Piece Goods Retailers459140 - Musical Instrument & Supplies Retailers459210 - Book Retailers & News Dealers (including newsstands)459310 - Florists459410 - Office Supplies & Stationery Retailers459420 - Gift, Novelty, & Souvenir Retailers459510 - Used Merchandise Retailers459910 - Pet & Pet Supplies Retailers459920 - Art Dealers459930 - Manufactured (Mobile) Home Dealers459990 - All Other Miscellaneous Retailers (including tobacco, candle, & trophy retailers) General Merchandise Retailers 455110 - Department Stores455210 - Warehouse Clubs, Supercenters, & Other General Merch. Retailers Nonstore Retailers - Nonstore retailers sell all types of merchandise using such methods as Internet, mail-order catalogs, interactive television, or direct sales. These types of Retailers should select the PBA associated with their primary line of products sold. For example, establishments primarily selling prescription and nonprescription drugs, select PBA code 456110 Pharmacies & Drug Retailers. Transportation and Warehousing Air, Rail, and Water Transportation 481000 - Air Transportation482110 - Rail Transportation483000 - Water Transportation Truck Transportation 484110 - General Freight Trucking, Local484120 - General Freight Trucking, Long-distance484200 - Specialized Freight Trucking Transit and Ground Passenger Transportation 485110 - Urban Transit Systems485210 - Interurban & Rural Bus Transportation485310 - Taxi and Ridesharing Services485320 - Limousine Service485410 - School & Employee Bus Transportation485510 - Charter Bus Industry485990 - Other Transit & Ground Passenger Transportation Pipeline Transportation 486000 - Pipeline Transportation Scenic & Sightseeing Transportation 487000 - Scenic & Sightseeing Transportation Support Activities for Transportation 488100 - Support Activities for Air Transportation488210 - Support Activities for Rail Transportation488300 - Support Activities for Water Transportation488410 - Motor Vehicle Towing488490 - Other Support Activities for Road Transportation488510 - Freight Transportation Arrangement488990 - Other Support Activities for Transportation Couriers and Messengers 492110 - Couriers & Express Delivery Services492210 - Local Messengers & Local Delivery Warehousing and Storage 493100 - Warehousing & Storage (except lessors of miniwarehouses & self-storage units) Information Publishing Industries 513110 - Newspaper Publishers513120 - Periodical Publishers513130 - Book Publishers513140 - Directory & Mailing List Publishers513190 - Other Publishers513210 - Software Publishers Motion Picture and Sound Recording Industries 512100 - Motion Picture & Video Industries (except video rental)512200 - Sound Recording Industries Broadcasting, Content Providers, & Telecommunications 516100 - Radio & Television Broadcasting Stations516210 - Media Streaming, Social Networks, & Other Content Providers517000 - Telecommunications (including Wired, Wireless, Satellite, Cable & Other Program Distribution, Resellers, Agents, Other Telecommunications, & Internet Service Providers) Data Processing, Web Search Portals, & Other Information Services 518210 - Computing Infrastructure Providers, Data Processing, Web Hosting, & Related Services519200 - Web Search Portals, Libraries, Archives, & Other Info. Services Finance and Insurance Depository Credit Intermediation 522110 - Commercial Banking522130 - Credit Unions522180 - Savings Institutions & Other Depository Credit Intermediation Nondepository Credit Intermediation 522210 - Credit Card Issuing522220 - Sales Financing522291 - Consumer Lending522292 - Real Estate Credit (including mortgage bankers & originators)522299 - Intl, Secondary Market, & Other Nondepos. Credit Intermediation Activities Related to Credit Intermediation 522300 - Activities Related to Credit Intermediation (including loan brokers, check clearing, & money transmitting) Securities, Commodity Contracts, and Other Financial Investments and Related Activities 523150 - Investment Banking & Securities Intermediation523160 - Commodity Contracts Intermediation523210 - Securities & Commodity Exchanges523900 - Other Financial Investment Activities (including portfolio management & investment advice) Insurance Carriers and Related Activities 524110 - Direct Life, Health, & Medical Insurance Carriers524120 - Direct Insurance (except Life, Health, & Medical) Carriers524210 - Insurance Agencies & Brokerages524290 - Other Insurance Related Activities (including third-party administration of insurance and pension funds) Funds, Trusts, and Other Financial Vehicles 525100 - Insurance & Employee Benefit Funds525910 - Form 1120-RIC, Open-End Investment Funds525920 - Trusts, Estates, & Agency Accounts525990 - Other Financial Vehicles (including mortgage REITs & closed-end investment funds) “Offices of Bank Holding Companies” and “Offices of Other Holding Companies” are located under Management of Companies (Holding Companies), later. Real Estate, Rental, and Leasing Real Estate 531110 - Lessors of Residential Buildings & Dwellings (including equity REITs)531120 - Lessors of Nonresidential Buildings (except Miniwarehouses) (including equity REITs)531130 - Lessors of Miniwarehouses & Self-Storage Units (including equity REITs)531190 - Lessors of Other Real Estate Property (including equity REITs)531210 - Offices of Real Estate Agents & Brokers531310 - Real Estate Property Managers531320 - Offices of Real Estate Appraisers531390 - Other Activities Related to Real Estate Rental and Leasing Services 532100 - Automotive Equipment Rental & Leasing532210 - Consumer Electronics & Appliances Rental532281 - Formal Wear & Costume Rental532282 - Video Tape & Disc Rental532283 - Home Health Equipment Rental532284 - Recreational Goods Rental532289 - All Other Consumer Goods Rental532310 - General Rental Centers532400 - Commercial & Industrial Machinery & Equipment Rental & Leasing Lessors of Nonfinancial Intangible Assets (except copyrighted works) 533110 - Lessors of Nonfinancial Intangible Assets (except copyrighted works) Professional, Scientific, and Technical Services Legal Services 541110 - Offices of Lawyers 541190 - Other Legal Services Accounting, Tax Preparation, Bookkeeping, and Payroll Services 541211 - Offices of Certified Public Accountants541213 - Tax Preparation Services541214 - Payroll Services541219 - Other Accounting Services Architectural, Engineering, and Related Services 541310 - Architectural Services541320 - Landscape Architecture Services541330 - Engineering Services541340 - Drafting Services541350 - Building Inspection Services541360 - Geophysical Surveying & Mapping Services541370 - Surveying & Mapping (except Geophysical) Services541380 - Testing Laboratories & Services Specialized Design Services 541400 - Specialized Design Services (including interior, industrial, graphic, & fashion design) Computer Systems Design and Related Services 541511 - Custom Computer Programming Services541512 - Computer Systems Design Services541513 - Computer Facilities Management Services541519 - Other Computer Related Services Other Professional, Scientific, and Technical Services 541600 - Management, Scientific, & Technical Consulting Services 541700 - Scientific Research & Development Services541800 - Advertising, Public Relations, & Related Services541910 - Marketing Research & Public Opinion Polling541920 - Photographic Services541930 - Translation & Interpretation Services541940 - Veterinary Services541990 - All Other Professional, Scientific, & Technical Services Management of Companies (Holding Companies) 551111 - Offices of Bank Holding Companies551112 - Offices of Other Holding Companies Administrative and Support, Waste Management, and Remediation Services Administrative and Support Services 561110 - Office Administrative Services561210 - Facilities Support Services561300 - Employment Services561410 - Document Preparation Services561420 - Telephone Call Centers561430 - Business Service Centers (including private mail centers & copy shops)561440 - Collection Agencies561450 - Credit Bureaus561490 - Other Business Support Services (including repossession services, court reporting, & stenotype services)561500 - Travel Arrangement & Reservation Services561600 - Investigation & Security Services561710 - Exterminating & Pest Control Services561720 - Janitorial Services561730 - Landscaping Services561740 - Carpet & Upholstery Cleaning Services561790 - Other Services to Buildings & Dwellings561900 - Other Support Services (including packaging & labeling services, & convention & trade show organizers) Waste Management and Remediation Services 562000 - Waste Management & Remediation Services Educational Services 611000 - Educational Services (including schools, colleges, & universities) Health Care and Social Assistance Offices of Physicians and Dentists 621111 - Offices of Physicians (except mental health specialists) 621112 - Offices of Physicians, Mental Health Specialists621210 - Offices of Dentists Offices of Other Health Practitioners 621310 - Offices of Chiropractors621320 - Offices of Optometrists621330 - Offices of Mental Health Practitioners (except Physicians)621340 - Offices of Physical, Occupational & Speech Therapists, & Audiologists621391 - Offices of Podiatrists621399 - Offices of All Other Miscellaneous Health Practitioners Outpatient Care Centers 621410 - Family Planning Centers621420 - Outpatient Mental Health & Substance Abuse Centers621491 - HMO Medical Centers621492 - Kidney Dialysis Centers621493 - Freestanding Ambulatory Surgical & Emergency Centers621498 - All Other Outpatient Care Centers Medical and Diagnostic Laboratories 621510 - Medical & Diagnostic Laboratories Home Health Care Services 621610 - Home Health Care Services Other Ambulatory Health Care Services 621900 - Other Ambulatory Health Care Services (including ambulance services & blood & organ banks) Hospitals 622000 - Hospitals Nursing and Residential Care Facilities 623000 - Nursing & Residential Care Facilities Social Assistance 624100 - Individual & Family Services624200 - Community Food & Housing, & Emergency & Other Relief Services624310 - Vocational Rehabilitation Services624410 - Childcare Services Arts, Entertainment, and Recreation Performing Arts, Spectator Sports, and Related Industries 711100 - Performing Arts Companies711210 - Spectator Sports (including sports clubs & racetracks)711300 - Promoters of Performing Arts, Sports, & Similar Events711410 - Agents & Managers for Artists, Athletes, Entertainers, & Other Public Figures711510 - Independent Artists, Writers, & Performers Museums, Historical Sites, and Similar Institutions 712100 - Museums, Historical Sites, & Similar Institutions Amusement, Gambling, and Recreation Industries 713100 - Amusement Parks & Arcades713200 - Gambling Industries713900 - Other Amusement & Recreation Industries (including golf courses, skiing facilities, marinas, fitness centers, & bowling centers) Accommodation and Food Services Accommodation 721110 - Hotels (except Casino Hotels) & Motels721120 - Casino Hotels721191 - Bed & Breakfast Inns721199 - All Other Traveler Accommodation721210 - RV (Recreational Vehicle) Parks & Recreational Camps721310 - Rooming & Boarding Houses, Dormitories, & Workers’ Camps Food Services and Drinking Places 722300 - Special Food Services (including food service contractors & caterers)722410 - Drinking Places (Alcoholic Beverages)722511 - Full-Service Restaurants722513 - Limited-Service Restaurants722514 - Cafeterias, Grill buffets, & Buffets722515 - Snack and Non-alcoholic Beverage Bars Other Services Repair and Maintenance 811110 - Automotive Mechanical & Electrical Repair & Maintenance 811120 - Automotive Body, Paint, Interior, & Glass Repair811190 - Other Automotive Repair & Maintenance (including oil change & lubrication shops & car washes)811210 - Electronic & Precision Equipment Repair & Maintenance 811310 - Commercial & Industrial Machinery & Equipment (except Automotive & Electronic) Repair & Maintenance811410 - Home & Garden Equipment & Appliance Repair & Maintenance811420 - Reupholstery & Furniture Repair811430 - Footwear & Leather Goods Repair811490 - Other Personal & Household Goods Repair & Maintenance Personal and Laundry Services 812111 - Barber Shops812112 - Beauty Salons812113 - Nail Salons812190 - Other Personal Care Services (including diet & weight reducing centers)812210 - Funeral Homes & Funeral Services812220 - Cemeteries & Crematories812310 - Coin-Operated Laundries & Drycleaners812320 - Drycleaning & Laundry Services (except Coin-Operated)812330 - Linen & Uniform Supply812910 - Pet Care (except Veterinary) Services812920 - Photofinishing812930 - Parking Lots & Garages812990 - All Other Personal Services Religious, Grantmaking, Civic, Professional, and Similar Organizations 813000 - Religious, Grantmaking, Civic, Professional, & Similar Organizations (including condominium and homeowners associations) Other 999000 - Unclassified Establishments (unable to classify) Index A Accounting methods, Accounting Methods Accounting period, Accounting Period Address change, Item D. Initial Return, Final Return, Name Change, Address Change, or Amended Return Advance payments, Advance payments. Affiliated group, Affiliated group. Allocation of patronage and nonpatronage income and deductions, Schedule G. Allocation of Patronage and Nonpatronage Income and Deductions Allocations to patrons Elective, Elective allocations to patrons of subchapter T cooperatives. Recapture of elective allocation of credit to patrons, Recapture of elective allocation of credit to patrons. Recapture of required excess credit allocated to patrons, Recapture of required excess credit allocated to patrons. Required, Required allocations to patrons of subchapter T cooperatives. Amended return, Item D. Initial Return, Final Return, Name Change, Address Change, or Amended Return Amortization, Election to deduct business start-up and organizational costs. Assembling the return, Assembling the Return At-risk rules, At-risk rules. B Backup withholding, Backup withholding. Bad debts, Line 13. Bad Debts Balance sheets per books, Schedule L. Balance Sheets per Books Bond credits, Line 5e. Bond Credits Business start-up expenses, Election to deduct business start-up and organizational costs. C Capital construction fund, Merchant Marine capital construction fund. Charitable contributions, Line 17. Charitable Contributions Closely held cooperatives, Closely held cooperatives. Compensation of officers, Line 11. Compensation of Officers Consolidated return, Item 12 Contributions to reduce debt held by the public, How To Make a Contribution To Reduce Debt Held by the Public Contributions, charitable, Line 17. Charitable Contributions Controlled group Member of, Line 1. Members of a Controlled Group Cost of goods sold, Line 2. Cost of Goods Sold Credits Foreign tax, Line 5a. Foreign Tax Credit Form 2439, Line 30f Form 4136, Line 30f General business, Line 5c. General Business Credit Recapture of, Line 8. Other Taxes Reducing expenses, Reducing certain expenses for which credits are allowable. D Deductions, Deductions Deductions and adjustments under section 1382, Schedule H. Deductions and Adjustments Under Section 1382 Depletion, Line 23. Other Deductions Depository methods of tax payment, Tax Payments Depreciation, Line 18. Depreciation Disclosure statement, reportable transaction, Reportable transaction disclosure statement. Dividends, Line 4. Dividends and Inclusions Dividends and special deductions, Schedule C. Dividends, Inclusions, and Special Deductions Dividends-received deduction, Line 21, Column (c) Domestic production activities deduction allocation, Line 4. Section 199A(g) deduction allocated to patrons. Dues, membership and other, Membership dues. E Electronic Federal Tax Payment System (EFTPS), Electronic Deposit Requirement Employee benefit programs, Line 21. Employee Benefit Programs Employer identification number (EIN), Item B. Employer Identification Number (EIN) Estimated tax, Estimated Tax Payments Overpaid, Line 30c. Overpaid Estimated Tax Payments, Line 30b. Estimated Tax Payments Penalty, Estimated tax penalty. Extension of time to file, Extension of Time To File F Final return, Item D. Initial Return, Final Return, Name Change, Address Change, or Amended Return Foreign person (defined), Foreign person. Foreign tax credit, Line 5a. Foreign Tax Credit Forms and publications, how to get, How To Get Forms and Publications G General business credit, Line 5c. General Business Credit General instructions, General Instructions Gross receipts, Line 1. Gross Receipts or Sales Gross rents and royalties, Line 6. Gross Rents and Royalties I Identifying information, Item A. Identifying Information Income, Income Income from qualifying shipping activities, Exception for income from qualifying shipping activities. Initial return, Item D. Initial Return, Final Return, Name Change, Address Change, or Amended Return Installment sales, Installment sales. Interest Income, Line 5. Interest Interest and penalties, Interest and Penalties Interest due Late payment of tax, Late payment of tax. Interest expense, Line 16. Interest Interest expense (relating to section 263A), Section 263A uniform capitalization rules. Interest income Tax-exempt, Item 10, Line 7. Tax-exempt Interest Inventory Section 263A uniform capitalization rules, Section 263A uniform capitalization rules. L Limitations on deductions, Limitations on Deductions, Limitation on deduction. Lobbying expenses, nondeductibility, Lobbying expenses. M Merchant Marine capital construction fund Deduction for contributions, Merchant Marine capital construction fund. Minimum tax Prior year, credit for, Line 5d. Credit for Prior Year Minimum Tax N Name and address, Name and Address Name change, Item D. Initial Return, Final Return, Name Change, Address Change, or Amended Return Net operating loss, Line 26a. Net Operating Loss Deduction, Item 12, Item 13 Nonaccrual experience method, Nonaccrual experience method for service providers. Nonpatronage income, Nonpatronage income. O Other deductions Amortization, Line 23. Other Deductions Depletion, Line 23. Other Deductions Entertainment expenses, Line 23. Other Deductions Insurance premiums, Line 23. Other Deductions Legal and professional fees, Line 23. Other Deductions Organizational costs, Line 23. Other Deductions Reforestations costs, Line 23. Other Deductions Repairs and maintenance, Line 23. Other Deductions Start-up costs, Line 23. Other Deductions Supplies, Line 23. Other Deductions Travel expenses, Line 23. Other Deductions Utilities, Line 23. Other Deductions Other income, Line 9. Other Income Other information, Schedule K. Other Information Other taxes Recapture, Line 8. Other Taxes Overpaid estimated tax, Line 30c. Overpaid Estimated Tax P Paid preparer authorization, Paid Preparer Authorization Partnership income (loss), Line 23. Other Deductions Passive activity limitations, Passive activity limitations. Patronage dividends, Line 9. Other Income, Line 3. Patronage Dividends Payment, depository methods of, Tax Payments Penalties, Line 31. Estimated Tax Penalty Late filing of return, Interest and Penalties Late payment of tax, Interest and Penalties Trust fund recovery penalty, Interest and Penalties Penalty Estimated tax, Line 31. Estimated Tax Penalty Late filing, Late filing of return. Late payment, Late payment of tax. Pension, profit-sharing, etc., plans, Line 20. Pension, Profit-Sharing, etc., Plans Per-unit retain allocations, Line 9. Other Income Preparer, tax return, Who Must Sign Principal business activity codes, Form 1120-C Private delivery services, Private Delivery Services Q Qualified written notice of allocation, Line 3b. Qualified written notices of allocation. Qualifying shipping activities, Income from, Exception for income from qualifying shipping activities. R Reconciliation of income (Sch M-1), Schedule M-1. Reconciliation of Income (Loss) per Books With Income per Return Recordkeeping, Recordkeeping Refund, Line 34. Refund Refundable credits, Line 30g Related taxpayer transactions, Transactions between related taxpayers. Rents (expense), Line 14. Rents S Salaries and wages, Line 12. Salaries and Wages Schedule C, Schedule C. Dividends, Inclusions, and Special Deductions G, Schedule G. Allocation of Patronage and Nonpatronage Income and Deductions H, Schedule H. Deductions and Adjustments Under Section 1382 J, Schedule J. Tax Computation K, Schedule K. Other Information L, Schedule L. Balance Sheets per Books M-1, Schedule M-1. Reconciliation of Income (Loss) per Books With Income per Return M-3 (Form 1120), Schedule M-3 (Form 1120). O, Line 1. Members of a Controlled Group Section 1382, deductions and adjustments, Line 25b. Deductions and Adjustments From Schedule H Section 1383 adjustment, Line 30h. Section 1383 Adjustment Section 263A costs, Section 263A uniform capitalization rules. Shareholders' equity adjustments, Line 26. Adjustments to Shareholders' Equity Signature, Who Must Sign Specific instructions, Specific Instructions T Tax computation, Schedule J. Tax Computation Tax issues, unresolved, The Taxpayer Advocate Service Tax-exempt securities, Line 5. Investments Taxes and licenses, Line 15. Taxes and Licenses Taxpayer Advocate, The Taxpayer Advocate Service Travel and entertainment, Line 5c. Travel and Entertainment Travel, meals, and entertainment, Travel, meals, and entertainment. Trust fund recovery penalty, Interest and Penalties Type of cooperative, Item C. Type of Cooperative W When to file, When To File Where to file, Where To File Who must file, Who Must File Who must sign, Who Must Sign Written notice of allocation Nonqualified, Line 3d. Nonqualified written notices of allocation. Qualified, Line 3b. Qualified written notices of allocation.
