Instructions For Schedule O (Form 1120) - 2012 Page 8
ADVERTISEMENT
1
2
3
4
5
6
7
8
9box 7c. If a corporation checks
Line 4. Reason for termination of
Line 7. Required information and
box 7c, it does not have to provide
existing apportionment plan.
elections for component members.
taxable income or tax apportionment
Check box 4a if all the component
The component members of a
information with regard to the other
members of a controlled group of
controlled group must determine their
component members of the group.
corporations are consenting to
additional taxes liability, as imposed
Instead, only provide the identifying
terminate the apportionment plan.
by section 11(b)(1), for their tax years
information (for example, name, EIN,
Check box 4b if:
that are subject to the same
and ending date of the tax year) for
December 31 testing date by
The controlled group has ceased to
these other members. See Special
combining their taxable incomes for
remain in existence within the
allocation rules for a short tax year,
such tax years and then apportioning
meaning of section 1563,
earlier.
the additional taxes among such
A corporation that was a
component members in the same
component member of the group on
Part II. Taxable Income
manner that the tax brackets were so
the testing date for the preceding tax
Apportionment
allocated. See Component Member's
year is no longer a component
Liability for its Additional Taxes,
member in the current tax year, or
Enter each component member's
earlier.
share of the taxable income used from
A corporation that was not a
component member of the group on
each tax bracket, as is applicable.
If a corporation does not know the
The component members of a
the testing date for the preceding tax
combined taxable income of the other
controlled group, collectively, are
year is a component member for the
component members of its group (for
current tax year.
entitled to one $50,000, one $25,000,
example, because those other
and one $9,925,000 taxable income
Line 5. Status of apportionment
component members have adopted
bracket amount (in that order) for
plan. Check the applicable box to
substantially different tax years), it can
columns (c), (d), and (e).
indicate the status of any
avoid underpayment of tax by
apportionment plan of the controlled
applying the maximum tax rate of 35%
Note. If a corporation has a loss,
group.
to the entire amount of its taxable
enter zero in columns (c) through (g).
Check box 5a, if the controlled
income. If the corporation later
Column (c). Enter the lesser of the
group does not have an
determines its tax liability is less, it
corporation's taxable income (as
apportionment plan in effect and is not
may file a claim for refund of
shown on Form 1120, or on the
adopting one.
overpayment.
applicable corporation's income tax
Check box 5b, if the controlled
Line 7a. A corporation choosing to
return) or the corporation's computed
group already has an apportionment
compute its tax liability by applying the
share of the $50,000 bracket.
plan in effect and is not amending or
maximum 35% rate to the entire
terminating this plan.
Column (d). Enter the lesser of the
amount of its taxable income should
corporation's taxable income (as
If box 5a is checked, then the
check box 7a. Further, a corporation
shown on Form 1120, or on the
component members must share all
checking box 7a does not have to
applicable corporation's income tax
tax-benefits equally and tax-benefit
provide taxable income or tax
return) minus the amount entered for
information is to be reported in Parts
apportionment information with
this corporation in column (c), or the
II, III, and IV.
respect to the other component
corporation's computed share of the
members of the group. Instead, only
Line 6. Statute of limitations. An
$25,000 bracket.
provide the identifying information (for
apportionment plan may not be
Column (e). Enter the lesser of the
example, name, EIN, and ending date
adopted or amended for a tax year of
corporation's taxable income (as
of the tax year) for these other
a component member unless there is
shown on Form 1120, or on the
members. Enter zero in the other
at least one year remaining in the
applicable corporation's income tax
columns for these members.
statutory period (including any
return) minus the amounts entered for
extensions) for assessing a deficiency
Line 7b. The controlled group may
this corporation in columns (c) and
against the corporation for that tax
elect to apportion their additional
(d), or the corporation's computed
year, but only where the tax liability for
taxes liability under the FIFO method,
share of the $9,925,000 bracket.
such tax year of that corporation
rather than the proportionate method.
would be increased by adopting such
Column (f). Enter the corporation's
To make this election, each
plan.
taxable income (from Form 1120 or
component member of the group must
If there is less than one year
the applicable corporation's income
check box 7b. If the members do not
remaining in the statutory period, the
tax return) minus the amounts entered
check box 7b, they will be required to
corporation must have entered into an
for this corporation in columns (c)
apportion their additional taxes liability
agreement with the IRS extending the
through (e).
using the proportionate method of
statutory period for the limited
allocation. See The proportionate
Column (g). Enter the total allocated
purpose of assessing any deficiency
method and The FIFO method,
taxable income amounts of each
against that corporation for a tax year
earlier.
component member (add columns (c)
affected by the adoption or the
through (f)). Each total in Part II,
Line 7c. If a component member
amendment of an apportionment plan.
column (g), for each component
of a controlled group of corporations
See Regulations section 1.1561-3(c)
member must equal taxable income
has a short tax year that does not
(2).
include a December 31 date, check
-8-
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial