Page 114 - BusinessStructures & Forms

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
line 14, in the total for Form 1120, or to be refunded. See the Instructions for Subtract the following amounts from
Schedule J, line 6. On the dotted line next Form 8866. Include any interest due on the total for line 11.
to line 6, enter "FROM FORM 8978" and line 9d. • Deferred tax on the corporation's share
the amount. Attach Form 8978. If Form Line 9e. Alternative tax on qualifying of undistributed earnings of a qualified
8978, line 14, shows an increase in tax, shipping activities. Enter any alternative electing fund. See the Instructions for
see the instructions for Schedule J, line 2. tax on qualifying shipping activities from Form 8621.
Form 8902. • Deferred LIFO recapture tax (section
Line 8 1363(d)). This tax is the part of the LIFO
Line 9f. Interest/tax due under section recapture tax that will be deferred and
A corporation is taxed as a personal 453A(c) and/or section 453(l). Include paid with Form 1120-S in the future. To
figure the deferred tax, first figure the total
any interest on deferred tax attributable to
holding company under section 542 if: certain nondealer installment obligations LIFO recapture tax. Follow the steps
• At least 60% of its adjusted ordinary (section 453A(c)) and dealer installment
gross income for the tax year is personal obligations (section 453(l)). below to figure the total LIFO recapture tax
and the deferred amount. Also, see
holding company income, and Line 10. Other Income, earlier.
• At any time during the last half of the tax Line 9g. Other. Include on line 9g
year more than 50% in value of its additional taxes and interest such as the
outstanding stock is directly or indirectly following. Attach a statement showing the Step 1. Figure the tax on the
owned by five or fewer individuals. computation of each item included in the corporation's income including the LIFO
total for line 9g and identify the applicable recapture amount. Complete Schedule J,
See Schedule PH (Form 1120) for Code section and the type of tax or Part I, lines 1 through 10.
definitions and details on how to figure the interest.
tax. • Recapture of Indian employment credit. Step 2. Using a separate worksheet,
Generally, if an employer terminates the complete Schedule J again, but do not
Line 9 employment of a qualified employee less include the LIFO recapture amount in the
corporation's taxable income.
than 1 year after the date of initial
Include any of the following taxes and employment, any Indian employment Step 3. Compare the tax in Step 2 to
credit allowed for a prior tax year because
interest. of wages paid or incurred to that employee the tax in Step 1. The difference between
Line 9a. Recapture of investment cred- must be recaptured. For details, see Form the two is the LIFO recapture tax.
it. If the corporation disposed of 8845 and section 45A.
investment credit property or changed its • Recapture of new markets credit (see Step 4. Multiply the amount figured in
use before the end of its useful life or Form 8874, New Markets Credit, and Step 3 by 75% (0.75). The result is the
recovery period, or is required to Form 8874-B, Notice of Recapture Event deferred LIFO recapture tax.
recapture a qualifying therapeutic for New Markets Credit).
discovery project grant, enter the increase • Recapture of employer-provided How to report. Attach a statement
in tax from Form 4255, Recapture of childcare facilities and services credit (see showing the computation of each item
included in, or subtracted from, the total
Investment Credit. See the Instructions for Form 8882).
Form 4255. • Tax and interest on a nonqualified for line 11. On the dotted line next to
line 11, specify (a) the applicable Code
Line 9b. Recapture of low-income withdrawal from a capital construction section, (b) the type of tax, and (c) enter
fund (section 7518(g)).
housing credit. If the corporation • Interest due on deferred gain (section the amount of tax. For example, if the
disposed of property (or there was a 1260(b)). corporation is deferring a $100 LIFO
reduction in the qualified basis of the • Interest due under section 1291(c)(3). recapture tax, subtract this amount from
property) for which it took the low-income See Form 8621 and the Instructions for the total on line 11, then enter “Section
housing credit, and the corporation did not Form 8621. 1363—Deferred Tax—$100” on the dotted
follow the procedures that would have line next to line 11.
prevented recapture of the credit, it may Alternative minimum tax (AMT). Part II—Reserved For Future
owe a tax. See Form 8611, Recapture of Applicable corporations subject to AMT
Low-Income Housing Credit. under section 59(k), if filing a return for a Use
Line 9c. Interest due under the short tax year that begins in 2023 and Line 12
ends in 2023, include on line 9g any
look-back method—completed corporate AMT imposed under section 55,
long-term contracts. If the corporation as amended by the Inflation Reduction Act Reserved for future use.
used the percentage-of-completion of 2022. On the dotted line next to line 9g,
method under section 460(b) for certain enter “CAMT” and the AMT amount. Part III—Payments and
long-term contracts, figure any interest Attach a detailed statement showing the Refundable Credits
due or to be refunded using the look-back computation of the AMT. Include a
method, described in section 460(b)(2). computation of adjusted financial
Use Form 8697 to figure any interest due statement income. Label the statement Line 14
or to be refunded. See the Instructions for “CAMT.”
Form 8697. Include any interest due on Enter any estimated tax payments the
line 9c. Line 11 corporation made for the tax year.
Line 9d. Interest due under the Beneficiaries of trusts. If the
look-back method—income forecast Include any deferred tax on the corporation is the beneficiary of a trust,
method. If the corporation used the termination of a section 1294 election and the trust makes a section 643(g)
income forecast method to depreciate applicable to shareholders in a qualified election to credit its estimated tax
property, it must figure any interest due or electing fund in the amount entered on payments to its beneficiaries, include the
to be refunded using the look-back line 11. corporation's share of the payment in the
method, described in section 167(g)(2). total for line 14. Enter “T” and the amount
Use Form 8866 to figure any interest due on the dotted line next to the entry space.

-20- Instructions for Form 1120