Instructions For Form 1120-Pc - 2005 (Page 6 of 21) in pdf

write “Section 953(d)” and the amount.

Line 3

For more details on controlled groups,

Attach a schedule showing the

see section 1563.

Members of a controlled group. A

computation. See section 953(d) for more

Line 3a. Members of a controlled group

member of a controlled group must check

details.

are entitled to one $50,000, one $25,000,

the box on line 3 and complete lines 3a

and one $9,925,000 taxable income

and 3b of the Form 1120-PC. The term

Item B. Employer

bracket amount (in that order) on line 3a.

“controlled group” means any

Identification Number (EIN)

When a controlled group adopts or

parent-subsidiary group, brother-sister

later amends an apportionment plan,

group, or combined group. See the

Enter the corporation’s EIN. If the

each member must attach to its tax return

definitions below.

corporation does not have an EIN, it must

a copy of its consent to this plan. The

apply for one. An EIN can be applied for:

Parent-subsidiary group. A

copy (or an attached statement) must

•

Online — Click on the EIN link at

parent-subsidiary group is one or more

show the part of the amount in each

The EIN is

chains of corporations connected through

taxable income bracket apportioned to

issued immediately once the application

stock ownership with a common parent

that member. See Regulations section

information is validated.

corporation if:

•

1.1561-3(b) for other requirements and

•

By telephone at 1-800-829-4933 from

Stock possessing at least 80% of the

for the time and manner of making the

7:00 a.m. to 10:00 p.m. in the

total combined voting power of all classes

consent.

corporation’s local time zone.

of stock entitled to vote or at least 80% of

•

Unequal apportionment plan.

By mailing or faxing Form SS-4,

the total value of shares of all classes of

Members of a controlled group can elect

Application for Employer Identification

stock of each of the corporations, except

an unequal apportionment plan and divide

Number.

the common parent corporation, is directly

the taxable income brackets as they want.

or indirectly owned by one or more of the

If the corporation has not received its

There is no need for consistency among

other corporations; and

EIN by the time the return is due, enter

taxable income brackets. Any member

•

The common parent corporation

“Applied for” in the space for the EIN. For

may be entitled to all, some, or none of

directly or indirectly owns stock

more details, see Pub. 583.

the taxable income bracket. However, the

possessing at least 80% of the total

total amount for all members cannot be

Note. The online application process is

combined voting power of all classes of

more than the total amount in each

not yet available for corporations with

stock entitled to vote or at least 80% of

taxable income bracket.

addresses in foreign countries or Puerto

the total value of shares of all classes of

Equal apportionment plan. If no

Rico.

stock of at least one of the other

apportionment plan is adopted, members

corporations, excluding, in computing

of a controlled group must divide the

Item E. Final Return, Name

such voting power or value, stock owned

amount in each taxable income bracket

directly by such other corporations.

Change, Address Change,

equally among themselves. For example,

Controlled Group AB consists of

Brother-sister group. A

or Amended Return

Corporation A and Corporation B. They

brother-sister group is two or more

Indicate a final return, name change,

do not elect an apportionment plan.

corporations if 5 or fewer persons who

address change, or amended return by

Therefore, each corporation is entitled to:

are individuals, estates, or trusts directly

•

checking the appropriate box.

$25,000 (one-half of $50,000) on line

or indirectly own stock possessing:

3a(1),

1. At least 80% of the total combined

Note. If a change of address occurs after

•

$12,500 (one-half of $25,000) on line

voting power of all classes of stock

the return is filed, use Form 8822,

3a(2), and

entitled to vote or at least 80% of the total

Change of Address, to notify the IRS of

•

$4,962,500 (one-half of $9,925,000) on

value of shares of all classes of the stock

the new address.

line 3a(3).

of each corporation, and

Line 3b. Members of a controlled group

Taxable Income

2. More than 50% of the total

are treated as one group to figure the

combined voting power of all classes of

Line 1, Taxable income, and line 2,

applicability of the additional 5% tax and

stock entitled to vote or more than 50% of

Taxable investment income. If the

the additional 3% tax. If an additional tax

the total value of shares of all classes of

corporation is a small company as

applies, each member will pay that tax

stock of each corporation, taking into

defined in section 831(b)(2) and elects

based on the part of the amount used in

account the stock ownership of each such

under section 831(b)(2)(A)(ii) to be taxed

each taxable income bracket to reduce

person only to the extent such stock

on taxable investment income, complete

that member’s tax. See section 1561(a). If

ownership is identical with respect to

Schedule B (ignore Schedule A) and

an additional tax applies, attach a

each such corporation.

enter the amount from Schedule B, line

schedule showing the taxable income of

21, on line 2, page 1. All other

the entire group and how the corporation

The definition of brother-sister group

corporations should complete Schedule A

figured its share of the additional tax.

does not include (1) above, for purposes

(ignore Schedule B) and enter on line 1,

Line 3b(1). Enter the corporation’s

of the taxable income brackets,

page 1, the amount from Schedule A, line

share of the additional 5% tax on line

alternative minimum tax exemption

37.

3b(1).

amounts, and accumulated earnings

credit.

Line 3b(2). Enter the corporation’s

Note. If Schedule C, line 10 was

share of the additional 3% tax on line

completed, see Minimum taxable income

Combined group. A combined group

3b(2).

on page 14.

is three or more corporations each of

Line 4

which is a member of a parent-subsidiary

Tax Computation and

group or a brother-sister group, and one

Members of a controlled group should

Payments

of which is:

use the worksheet on the next page to

•

A common parent corporation included

figure the tax for the group. In addition,

in a group of corporations in a

If the corporation is making a

members of a controlled group must

parent-subsidiary group, and also

section 965 election, see the

attach to Form 1120-PC a statement

•

instructions for Parts III and IV of

Included in a group of corporations in a

showing the computation of the tax

CAUTION

Form 8895 before completing page 1.

brother-sister group.

entered on line 4.

-6-

Instructions for Form 1120-PC

Instructions For Form 1120-Pc - 2005 Page 6

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