Page 103 - BusinessStructures & Forms

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
corporation is filing its return electronically, defined in section 1353) at the highest gross sales, (b) cost of goods sold, (c)
an EIN is required at the time the return is corporate tax rate. If the election is made, gross profits, (d) percentage of gross
filed. An exception applies to subsidiaries the corporation generally may not claim profits to gross sales, (e) amount
of corporations whose returns are filed any loss, deduction, or credit with respect collected, and (f) gross profit on the
with the parent's electronically filed to qualifying shipping activities. A amount collected.
consolidated Form 1120. These corporation making this election may also For sales of timeshares and residential
subsidiaries should enter “Applied For” in elect to defer gain on the disposition of a lots reported under the installment
the space for the EIN on their returns. The qualifying vessel. method, if the corporation elects to pay
subsidiaries' returns are identified under Use Form 8902, Alternative Tax on interest under section 453(I)(3), the
the parent corporation's EIN. Qualifying Shipping Activities, to figure the corporation's income tax is increased by
For more information, see the tax. Include the alternative tax on the interest payable under section 453(l)
Instructions for Form SS-4. Schedule J, Part I, line 9e. (3). Report this addition to the tax on
Schedule J, Part I, line 9f.
Item D. Total Assets Line 1. Gross Receipts or Sales Nonaccrual experience method for
Enter the corporation's total assets (as Line 1a. Gross receipts or sales. Enter service providers. Accrual method
on line 1a gross receipts or sales from all
determined by the accounting method corporations are not required to accrue
regularly used in keeping the corporation's business operations, except for amounts certain amounts to be received from the
books and records) at the end of the tax that must be reported on lines 4 through performance of services that, based on
10.
year. If there are no assets at the end of their experience, will not be collected, if:
Special rules apply to certain income,
the tax year, enter -0-. as discussed below. • The services are in the fields of health,
If the corporation is required to law, engineering, architecture, accounting,
actuarial science, performing arts or
complete Schedule L, enter the total Advance payments. In general, consulting; or
assets from Schedule L, line 15, column advance payments are reported in the • The corporation meets the section
(d), on page 1, Item D. If filing a year of receipt. For exceptions to this 448(c) gross receipts test for all prior
consolidated return, report total general rule for corporations that use the years.
consolidated assets for all corporations accrual method of accounting, see the
joining in the return. following. This provision does not apply to any
• To report income from long-term amount if interest is required to be paid on
Item E. Initial Return, Final contracts, see section 460. the amount or if there is any penalty for
failure to timely pay the amount. See
• For rules that allow a limited deferral of
Return, Name Change, or advance payments beyond the current tax Regulations section 1.448-3 for more
Address Change year, see section 451(c). Also, see information on the nonaccrual experience
• If this is the corporation's first return, Regulations sections 1.451-8(c), (d), and method, including information on safe
check the “Initial return” box. (e). For applicability dates, see harbor methods.
• If this is the corporation's final return Regulations section 1.451-8(h). For information on a book safe harbor
and it will no longer exist, check the “Final • For information on adopting or method of accounting for corporations that
return” box. changing to a permissible method for use the nonaccrual experience method of
• If the corporation changed its name reporting advance payments for services accounting, see Rev. Proc. 2011-46,
since it last filed a return, check the “Name and certain goods by an accrual method 2011-42 I.R.B. 518 available at
change” box. Generally, a corporation corporation, see the Instructions for Form IRS.gov/irb/2011-42_IRB#RP-2011-46, or
must also have amended its articles of 3115. any successor. Also, see the Instructions
incorporation and filed the amendment Installment sales. Generally, the for Form 3115 for procedures to obtain
with the state in which it was incorporated. installment method cannot be used for automatic consent to change to this
• If the corporation has changed its dealer dispositions of property. A “dealer method or make certain changes within
address since it last filed a return disposition” is any disposition of (a) this method.
(including a change to an “in care of” personal property by a person who Corporations that qualify to use the
address), check the “Address change” regularly sells or otherwise disposes of nonaccrual experience method should
box. personal property of the same type on the attach a statement showing total gross

Note. If a change in address or installment plan, or (b) real property held receipts, the amount not accrued because
of the application of section 448(d)(5), and
for sale to customers in the ordinary
responsible party occurs after the return is course of the taxpayer's trade or business. the net amount accrued. Enter the net
filed, use Form 8822-B, Change of amount on line 1a.
Address or Responsible Party— The restrictions on using the
Business, to notify the IRS. See the installment method do not apply to the Line 1b. Returns and allowances.
instructions for Form 8822-B for details. following. Enter cash and credit refunds the
• Dispositions of property used or corporation made to customers for
produced in the trade or business of returned merchandise, rebates, and other
Income farming. allowances made on gross receipts or
Except as otherwise provided in the • Certain dispositions of timeshares and sales.
Internal Revenue Code, gross income residential lots reported under the Line 2. Cost of Goods Sold
includes all income from whatever source installment method for which the Complete and attach Form 1125-A, Cost
derived. corporation elects to pay interest under of Goods Sold, if applicable. Enter on
section 453(I)(3).
Exception for income from qualifying Enter on line 1a (and carry to line 3) the Form 1120, line 2, the amount from Form
shipping activities. Gross income does gross profit on collections from these 1125-A, line 8. See Form 1125-A and its
not include income from qualifying installment sales. Attach a statement instructions.
shipping activities if the corporation makes showing the following information for the
an election under section 1354 to be taxed current and the 3 preceding years: (a)
on its notional shipping income (as

Instructions for Form 1120 -9-