Instructions For Schedule O Internal Revenue Service (Form 1120) - 2006 Page 2
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3affiliated group for which a section
corporation is acquired or created, or
Equal Apportionment Plan
1504(c)(2) election is effective.
(b) the December 31 of such
If no apportionment plan is adopted
Instead, such life insurance company
corporation’s tax year.
(or in effect), members of a controlled
will be treated as a member of the
group must divide the amount in each
life-nonlife controlled group (a
Additional Members
taxable income bracket equally
deemed parent-subsidiary controlled
A corporation (other than an S
among themselves (regardless of
group).
corporation) which (a) was a member
whether any member is a member of
of a controlled group of corporations
a consolidated group). For example,
Component Member
at any time during a calendar year,
Controlled Group AB consists of
A corporation is a component
(b) is not a member of such group on
Corporation A and Corporation B.
member of a controlled group of
December 31 of such calendar year,
They do not elect an apportionment
corporations on a December 31 of
and (c) is not described, with respect
plan. Therefore, each corporation is
any tax year (and with respect to the
to such group, in section
entitled to:
tax year which includes such
•
1563(b)(2)(B),(C),(D), or (E), will be
$25,000 (one-half of $50,000) on
December 31) if the corporation:
treated as an additional member of
Part II, column (c),
•
Is a member of such controlled
•
such group on December 31 for its
$12,500 (one-half of $25,000) on
group of corporations on the
tax year including such December 31
Part II, column (d), and
December 31 included in the year
•
if it was a member of such group for
$4,962,500 (one-half of
and is not treated as an excluded
one-half (or more) of the number of
$9,925,000) on Part II, column (e).
member (defined below), or
days in such tax year which precede
•
See the instructions for Part II.
Is not a member of the controlled
such December 31.
group of corporations on the
December 31 included in such year
Overlapping Groups
Specific Instructions
but is treated as an additional
If a corporation is a component
member (defined below).
member of more than one controlled
If any component members of a
Identifying Information
group of corporations with respect to
controlled group of corporations are
any tax year, that corporation will be
On page 1, enter the name and
also members of a consolidated
treated as a component member of
employer identification number (EIN)
group, such members will be treated
only one controlled group. The
of the component member filing this
as separate component members of
determination as to the group of
Schedule O.
the controlled group.
which such corporation is a
In Parts II, III, and IV, enter the
component member shall be made
Excluded Members
name and EIN (if applicable) of the
under regulations prescribed by the
member filing this Schedule O on line
A corporation which is a member of a
Secretary.
1. Enter the name and EIN (if
controlled group of corporations on
applicable) of the other members of
December 31 of any tax year will be
Excluded Stock
the controlled group on lines 2
treated as an excluded member of
The term “stock” does not include:
through 10. Attach additional sheets if
such group for the tax year including
•
Nonvoting stock which is limited
more space is needed. If several
such December 31 if such
component members are also
and preferred as to dividends,
corporation is:
•
•
members of a consolidated group,
Treasury stock, and
A member of such group for less
•
then with respect to those members,
Stock which is treated as “excluded
than one-half the number of days in
provide only the name, EIN (and if
stock” under section 1563(c)(2)(A) in
such tax year which precede such
necessary the tax year) of the
the case of a parent-subsidiary
December 31;
•
common parent of the group (and not
controlled group or section
Exempt from tax under section
of the other members of that
501(a) (except a corporation which is
1563(c)(2)(B) in the case of a
consolidated group). See Temporary
brother-sister controlled group.
subject to tax on its unrelated
Regulations section 1.1561-3T(a)(2).
business taxable income under
section 511) for such tax year;
Unequal Apportionment Plan
•
Part I. Apportionment
A foreign corporation subject to tax
Members of a controlled group can
under section 881 for such tax year;
Plan Information
elect an unequal apportionment plan
•
An insurance company subject to
and divide the taxable income
tax under section 801 (other than an
Line 1. Type of controlled group. A
brackets as they want. If any
insurance company which is a
member of a controlled group must
members are also members of a
member of a controlled group
check the applicable box to indicate
consolidated group, the consolidated
described above under Types of
the type of group. For more
group will be treated as one
Controlled Groups);
information, see Types of Controlled
component member of the controlled
•
A franchised corporation, as
Groups earlier.
group for purposes of apportionment.
defined in section 1563(f)(4); or
There is no need for consistency
Line 4. Status of apportionment
•
An S corporation, as defined in
among taxable income brackets. The
plan. Check the applicable box to
section 1361.
controlled group may apportion all,
indicate the status of the controlled
In determining how many days a
some, or none of the taxable income
group’s apportionment plan. If the
corporation has been a member of a
bracket amounts between its
group is adopting an apportionment
controlled group, the group must take
members. However, the total amount
plan or amending the current
into account the day it is sold or
for all members cannot be more than
apportionment plan for a prior tax
liquidated, but does not take into
the total amount in each taxable
year, there must be at least one year
account either: (a) the day such
income bracket.
remaining on the statute of limitations
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