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Line 30. Taxable income. For

and 32h, and write “backup

goods or merchandise are sold (or, if

cooperatives required to file Form

withholding.”

later, the year the cooperative paid for

8817, taxable income reported on line

the raw materials or merchandise).

Line 33. Estimated tax penalty. A

30 may not exceed the combined

Enter amounts paid for all raw

cooperative that does not make

taxable income shown on line 30,

materials and merchandise during the

estimated tax payments when due

Form 8817. Attach Form 8817 to the

tax year on line 2. The amount the

may be subject to an underpayment

cooperative's tax return. See Form

cooperative can deduct for the tax

penalty for the period of

8817 for more details.

year is figured on line 9.

underpayment. Generally, a

cooperative is subject to the penalty

If the cooperative wants to change

Patronage source losses

to the cash method of accounting, it

if its tax liability is $500 or more and

cannot be used to offset

it did not timely pay the smaller of:

must file Form 3115. It may also have

nonpatronage income. See

CAUTION

to make an adjustment to prevent

Its tax liability for 2000 or

section 1388(j) for more information .

amounts of income or expense from

Its prior year's tax. See section

Line 32b. Estimated tax payments.

being duplicated or omitted. This is

6655 for details and exceptions

Enter any estimated tax payments the

called a section 481(a) adjustment,

including special rules for large

cooperative made for the tax year.

which is taken into account over a

cooperatives.

Beneficiaries of trusts. If the

period not to exceed 4 years. For

Use Form 2220, Underpayment of

cooperative is the beneficiary of a

example, if the cooperative accrued

Estimated Tax by Corporations, to

trust, and the trust makes a section

sales in 1999 for which it received

see if the cooperative owes a penalty

643(g) election to credit its estimated

payment in 2000, it must report those

and to figure the amount of the

tax payments to its beneficiaries,

sales in both years as a result of

penalty. Generally, the cooperative

include the cooperative's share of the

changing its accounting method and

does not have to file this form

estimated tax payment in the total

will make a section 481(a) adjustment

because the IRS can figure the

amount entered on line 32b. Write

to prevent duplication of income. See

amount of any penalty and bill the

“T” and the amount of the payment in

Rev. Proc. 99-49, 1999-52 I.R.B. 725,

cooperative for it. However, even if

the blank space to the right of the

to figure the amount of this

the cooperative does not owe the

entry space.

adjustment for the tax year. Include

penalty you must complete and attach

Line 32f. Credit from refiguring tax

any positive section 481(a)

Form 2220 if:

for years in which nonqualified

adjustment on page 1, line 10. If the

The annualized income or adjusted

per-unit retain certificates or

section 481(a) adjustment is negative,

seasonal installment method is used,

nonqualified written notices of

report it on line 26.

allocation (redeemed this year)

For eligibility requirements and

The cooperative is a large

were issued. If the cooperative paid

further details on changing to the

cooperative computing its first

less total tax by not claiming the

cash method of accounting, see Pub.

required installment based on the

deduction for the redemption of

553.

prior year's tax. (See the Form 2220

nonqualified written notices of

All filers not using the cash method

instructions for the definition of a

allocation or nonqualified per-unit

of accounting should see Section

large corporation.)

retain certificates in the current tax

263A uniform capitalization rules

If you attach Form 2220, check the

year, and instead the cooperative

on page 8 before completing

refigured the tax for the years the

box on line 33, and enter the amount

Schedule A.

of any penalty on this line.

nonqualified written notices or

Line 1. Inventory at Beginning of

certificates were originally issued,

Year. If the cooperative is changing

enter the amount of the reduction in

its method of accounting from accrual

Schedule A

the issue years' taxes on this line.

to cash for the current tax year and it

Attach a schedule showing how the

does not want to account for

Cost of Goods Sold

credit was figured. This credit is

inventories, it must refigure last year's

treated as a payment, and any

Generally, inventories are required at

closing inventory using the cash

amount that is more than the tax on

the beginning and end of each tax

method and enter the result on line

line 31 will be refunded.

year if the production, purchase, or

1. If there is a difference between the

Line 32g. Credit for federal tax on

sale of merchandise is an

closing inventory and the refigured

fuels. Complete Form 4136, Credit

income-producing factor. See

amount, attach an explanation and

for Federal Tax Paid on Fuels, if the

Regulations section 1.471-1.

take it into account when figuring the

cooperative qualifies to take this

However, if a cooperative's average

cooperative's section 481(a)

credit. See Assembling the Return

annual gross receipts for the 3 prior

adjustment (explained above).

on page 6.

tax years are $1 million or less and

Line 4a. Qualified per-unit retain

Line 32h. Total payments. Add the

the cooperative is an eligible taxpayer

certificates are issued to patrons who

amounts on lines 32d through 32g

that adopts or changes to the cash

have agreed to include the stated

and enter the total on line 32h.

method of accounting, it will not be

dollar amount in current income.

Backup withholding. If the

required to account for inventories. If

Line 5. Enter the amount paid in

cooperative had income tax withheld

the cooperative is not required to

money or other property (except

account for inventories and does not

from any payments it received,

per-unit retain certificates) to patrons

because, for example, it failed to give

want to do so, it must treat inventory

to redeem nonqualified per-unit retain

in the same manner as costs of

the payer its correct EIN, include the

certificates. If a per-unit retain

amount withheld in the total for line

materials and supplies that are not

certificate does not qualify, no

incidental. Under this rule, inventory

32h. This type of withholding is called

deduction is allowable at the time it is

backup withholding. Show the amount

costs for raw materials purchased for

issued. However, the cooperative

use in producing finish goods and

withheld in the blank space in the

may take a deduction or a refund of

right-hand column between lines 31

merchandise purchased for resale are

tax when the nonqualified per-unit

deductible in the year the finished

retain certificate is finally redeemed,

Page 13

Instructions For Form 990-C - Farmers' Cooperative Association Income Tax Return - 2000 Page 13

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