Instructions For Schedule O (Form 1120) - 2008

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Instructions for Schedule O
Department of the Treasury
Internal Revenue Service
(Form 1120)
(Rev. February 2008)
(Use with the December 2006 Schedule O (Form 1120))
Consent Plan and Apportionment Schedule for a Controlled Group
Section references are to the Internal
group. See Identifying Information on
value, stock owned directly by such
Revenue Code unless otherwise noted.
page 3 of these instructions.
other corporations.
General Instructions
For purposes of determining
If all of the members of a
whether a corporation is a member of
parent-subsidiary controlled group
a parent-subsidiary controlled group
are included in the same consolidated
Purpose of Schedule
of corporations within the meaning of
return, then the parent of the
Use Schedule O to report the
section 1563(a)(1), stock owned by a
parent-subsidiary group does not
apportionment of taxable income,
corporation means:
have to file a separate Schedule O for
income tax, and certain tax benefits
Stock owned directly by the
the controlled group.
between the members of a controlled
corporation, and
Schedule O is not required to be
group.
Stock owned with the application of
filed if:
section 1563(e)(1), (2), and (3).
Also, use Schedule O to indicate
All members of the controlled
Brother-sister group. A
that all members of the controlled
group, who are required to file a U.S.
brother-sister group is two or more
group:
tax return, join in filing a consolidated
corporations if the same five or fewer
Are not adopting an apportionment
return. Form 1120, Schedule J, Line
persons who are individuals, estates,
plan,
1, should not be checked.
or trusts directly or indirectly own
Already have an apportionment
The corporation is a subsidiary that
stock possessing:
plan in effect,
joins in filing a consolidated return.
Are amending a previously adopted
Only the parent is required to file
1. At least 80% of the total
apportionment plan,
Schedule O.
combined voting power of all classes
Are adopting an apportionment
The corporation (or consolidated
of stock entitled to vote or at least
plan, or
group) is part of a controlled group
80% of the total value of shares of all
Are terminating the existing
with a tax year that began before
classes of the stock of each
apportionment plan.
December 22, 2006.
corporation, and
2. More than 50% of the total
Who Must File
Definitions and Special
combined voting power of all classes
of stock entitled to vote or more than
A corporation must file Schedule O
Rules
50% of the total value of shares of all
with its income tax return, amended
classes of stock of each corporation,
return, or claim for refund (if
Types of Controlled Groups
taking into account the stock
appropriate) for each tax year that the
ownership of each such person only
corporation is a member of a
Parent-subsidiary group. A
to the extent such stock ownership is
controlled group, even if no
parent-subsidiary group is one or
identical with respect to each such
apportionment plan is in effect.
more chains of corporations
corporation.
connected through stock ownership
By filing this schedule, the
with a common parent corporation if:
corporation consents to the adoption
For purposes of determining and
Stock possessing at least 80% of
or amendment of an apportionment
allocating the following, the definition
the total combined voting power of all
plan by the controlled group and to
of brother-sister group does not
classes of stock entitled to vote or at
the allocation of certain tax benefits to
include (1) above.
least 80% of the total value of shares
the members of the controlled group.
Taxable income brackets,
of all classes of stock of each of the
The apportionment plan (including an
Accumulated earnings credit,
corporations, except the common
amended plan) remains in effect until
Alternative minimum tax exemption
parent corporation, is directly or
it is terminated. See sections 1561
amount,
indirectly owned by one or more of
and 1563 and the related regulations
Phaseout of the alternative
the other corporations; and
for more information.
minimum tax exemption amount, or
The common parent corporation
The additional tax.
If a member of a controlled group
directly or indirectly owns stock
is a consolidated group, then the
possessing at least 80% of the total
For purposes of determining
common parent of the consolidated
combined voting power of all classes
whether a corporation is a member of
group can file one Schedule O for all
of stock entitled to vote or at least
a brother-sister controlled group of
the members of the consolidated
80% of the total value of shares of all
corporations within the meaning of
group. That Schedule O should
classes of stock of at least one of the
section 1563(a)(2), stock owned by a
contain the consolidated information
other corporations, excluding, in
person who is an individual, estate, or
for all members of the consolidated
computing such voting power or
trust means:
Cat. No. 48211V

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