Page 101 - BusinessStructures & Forms

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
incorrect information). Other penalties, basis in the stock received instead of (3) of Rev. Proc. 2021-48, and for what tax
such as an accuracy-related penalty under reducing the transferee corporation's year, as applicable;
section 6662A, may also apply. See the basis in the property transferred. Once 3. The amount of tax-exempt income
Instructions for Form 8886 for details on made, the election is irrevocable. For from forgiveness of the PPP loan that the
these and other penalties. more information, see section 362(e)(2) corporation is treating as received or
Reportable transactions by material and Regulations section 1.362-4. If an accrued and for which tax year; and
election is made, a statement must be
advisors. Material advisors to any 4. Whether forgiveness of the PPP
reportable transaction must disclose filed in accordance with Regulations loan has been granted as of the date the
section 1.362-4(d)(3).
certain information about the reportable return is filed.
transaction by filing Form 8918 with the Annual information reporting by speci-
IRS. For details, see the Instructions for fied domestic entities under section A corporation that reported tax-exempt
Form 8918. 6038D. Certain domestic corporations income from the forgiveness of a PPP loan
on its 2020 return, the timing of which
Transfers to a corporation controlled that are formed or availed of to hold corresponds to one of the options
specified foreign financial assets
by the transferor. Every significant (“specified domestic entities”) must file presented in Rev. Proc. 2021-48, need not
transferor (as defined in Regulations Form 8938. Form 8938 must be filed each file an amended return solely to attach the
section 1.351-3(d)(1)) that receives stock year the value of the corporation's statement that is described in these
of a corporation in exchange for property instructions.
in a nonrecognition event must include the specified foreign financial assets is more If a corporation treats tax-exempt
than $50,000 on the last day of the tax
statement required by Regulations section year or more than $75,000 at any time income resulting from a PPP loan as
1.351-3(a) on or with the transferor's tax during the tax year. For more information received or accrued prior to when
return for the tax year of the exchange. on domestic corporations that are forgiveness of the PPP loan is granted and
The transferee corporation must include the amount of forgiveness granted is less
the statement required by Regulations specified domestic entities and the types than the amount of tax-exempt income
of foreign financial assets that must be
section 1.351-3(b) on or with its return for reported, see the Instructions for Form that was previously treated as received or
the tax year of the exchange, unless all the 8938, generally, and in particular, Who accrued, the corporation should make a
required information is included in any Must File, Specified Domestic Entity, prior period adjustment on Schedule M-2
statement(s) provided by a significant for the tax year in which the corporation
transferor that is attached to the same Specified Foreign Financial Assets, receives notice that the PPP loan was not
Interests in Specified Foreign Financial
return for the same section 351 exchange. Assets, Assets Not Required To Be fully forgiven. See the instructions for
If the transferor or transferee corporation Reported, and Exceptions to Reporting. Schedule M-2 for more details.
is a controlled foreign corporation (CFC),
each U.S. shareholder (within the meaning In addition, a domestic corporation Other forms and statements. See Pub.
of section 951(b)) must include the required to file Form 8938 with its Form 542, Corporations, for a list of other forms
required statement on or with its return. 1120 for the taxable year should check and statements a corporation may need to
Distributions under section 355. Every “Yes” to Schedule N (Form 1120), file in addition to the forms and statements
Question 8, and also include that schedule
discussed throughout these instructions.
corporation that makes a distribution of with its Form 1120.
stock or securities of a controlled
corporation, as described in section 355 Form 8975. Certain U.S. persons that are Specific Instructions
(or so much of section 356 as it relates to the ultimate parent entity of a U.S.
section 355), must include the statement multinational enterprise group with annual Period Covered
required by Regulations section revenue for the preceding reporting period
1.355-5(a) on or with its return for the year of $850 million or more are required to file File the 2022 return for calendar year 2022
of the distribution. A significant distributee Form 8975, Country-by-Country Report. and fiscal years that begin in 2022 and
(as defined in Regulations section Form 8975 and Schedule A (Form 8975) end in 2023. For a fiscal or short tax year
1.355-5(c)) that receives stock or must be filed with the income tax return of return, fill in the tax year space at the top
securities of a controlled corporation must the ultimate parent entity of a U.S. of the form.
include the statement required by multinational enterprise group for the tax The 2022 Form 1120 can also be used
Regulations section 1.355-5(b) on or with year in or within which the reporting period if:
its return for the year of receipt. If the covered by Form 8975 ends. For more • The corporation has a tax year of less
distributing or distributee corporation is a information, see Form 8975, Schedule A than 12 months that begins and ends in
CFC, each U.S. shareholder (within the (Form 8975) and the Instructions for Form 2023, and
meaning of section 951(b)) must include 8975, and Schedule A (Form 8975). • The 2023 Form 1120 is not available at
the statement on or with its return. Paycheck Protection Program (PPP) the time the corporation is required to file
Dual consolidated losses. If a domestic loans. A corporation that has tax-exempt its return.
corporation incurs a dual consolidated income resulting from the forgiveness of a The corporation must show its 2023 tax
loss (as defined in Regulations section PPP loan should attach a statement to its year on the 2022 Form 1120 and take into
1.1503(d)-1(b)(5)), the corporation (or return reporting each tax year for which account any tax law changes that are
consolidated group) may need to attach a the corporation is applying Rev. Proc. effective for tax years beginning after
domestic use agreement and/or an annual 2021-48, sections 3.01(1), (2), or (3). Any December 31, 2022.
certification, as provided in Regulations statement for the current tax year should
section 1.1503(d)-6(d) and (g). include the following information, for each Name and Address
Election to reduce basis under section PPP loan: Enter the corporation's true name (as set
362(e)(2)(C). If property is transferred to 1. The corporation's name, address, forth in the charter or other legal document
a corporation subject to section 362(e)(2), and EIN; creating it), address, and EIN on the
the transferor and the transferee 2. A statement that the corporation is appropriate lines. Enter the address of the
corporation may elect, under section applying or applied section 3.01(1), (2), or corporation's principal office or place of
362(e)(2)(C), to reduce the transferor's business. Include the suite, room, or other
unit number after the street address. If the

Instructions for Form 1120 -7-