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a. Enter the name(s) of the foreign

1. The common parent must directly

country or countries. Attach a separate

own stock that represents at least 80% of

Schedule M-1

sheet if more space is needed.

the total voting power and at least 80% of

b. File Form TD F 90-22.1 by June 30,

the total value of the stock of at least one

Reconciliation of Income (Loss)

2005, with the Department of the

of the other includible corporations, and

per Books With Income per

Treasury at the address shown on the

2. Stock that represents at least 80%

Return

form. Do not file it with Form 990-C.

of the total voting power and at least 80%

of the total value of the stock of each of

You can order Form TD F 90-22.1 by

Line 5c. Travel and

the other corporations (except for the

calling 1-800-TAX-FORM

common parent) must be owned directly

Entertainment

(1-800-829-3676) or you can download it

by one or more of the other includible

Include on line 5c any of the following:

from the IRS website at

•

corporations.

Meals and entertainment not deductible

Question 14

under section 274(n).

For this purpose, stock generally does

•

Expenses for the use of an

The cooperative may be required to file

not include any stock that (a) is

entertainment facility.

Form 3520, Annual Return To Report

nonvoting, (b) is nonconvertible, (c) is

•

The part of business gifts over $25.

Transactions with Foreign Trusts and

limited and preferred as to dividends and

•

Expenses of an individual in excess of

Receipt of Certain Foreign Gifts, if:

does not participate significantly in

•

$2,000, which are allocable to

It directly or indirectly transferred

corporate growth, and (d) has redemption

conventions on cruise ships.

money or property to a foreign trust. For

and liquidation rights that do not exceed

•

Employee achievement awards over

this purpose, any U.S. person who

the issue price of the stock (except for a

$400.

created a foreign trust is considered a

reasonable redemption or liquidation

•

The cost of entertainment tickets over

transferor.

premium). See section 1504(a)(4).

•

their face value (also subject to 50% limit

It is treated as the owner of any part of

Parent-subsidiary controlled group.

under section 274(n)).

the assets of a foreign trust under the

•

The term “parent-subsidiary controlled

The cost of skyboxes over the face

grantor trust rules.

group” means one or more chains of

•

value of nonluxury box seat tickets.

It received a distribution from a foreign

•

corporations connected through stock

The part of luxury water travel not

trust.

ownership (section 1563(a)(1)). Both of

deductible under section 274(m).

•

For more information, see the

the following requirements must be met:

Expenses for travel as a form of

Instructions for Form 3520.

education.

1. At least 80% of the total combined

•

An owner of a foreign trust must

voting power of all classes of voting stock

Other nondeductible expenses for

ensure that the trust files an annual

or at least 80% of the total value of all

travel and entertainment.

information return on Form 3520-A,

classes of stock of each corporation in the

For more information, see Pub. 542.

Annual Information Return of Foreign

group (except the parent) must be owned

Trust with a U.S. Owner. For details, see

Line 7. Tax-exempt Interest

by one or more of the other corporations

Form 3520-A.

in the group, and

Show any tax-exempt interest received or

2. The common parent must own at

Item 15

accrued including any exempt-interest

least 80% of the total combined voting

dividends received as a shareholder in a

Show any tax-exempt interest income

power of all classes of stock entitled to

mutual fund or RIC. Also report this same

received or accrued. Include any

vote or at least 80% of the total value of

amount on Schedule N, item 15.

exempt-interest dividends received as a

all classes of stock of one or more of the

shareholder in a mutual fund or RIC. Also,

other corporations in the group. Stock

if required, include the same amount on

owned directly by other members of the

Schedule N

Schedule M-1, line 7.

group is not counted when computing the

voting power or value.

Question 17

Other Information

Check the “Yes” box if:

See section 1563(d)(1) for the

The following instructions apply to Form

1. The cooperative is a subsidiary in

definition of “stock” for purposes of

990-C, page 5, Schedule N. Be sure to

an affiliated group (defined below), but is

determining stock ownership above.

complete all the items that apply to the

not filing a consolidated return for the tax

cooperative.

Item 19

year with that group, or

Question 13

2. The cooperative is a subsidiary in a

If the cooperative has an NOL for its 2004

parent-subsidiary controlled group

tax year, it may elect, under section

Foreign financial account. Check the

(defined below).

172(b)(3), to waive the entire carryback

“Yes” box if either 1 or 2 below applies to

period for the NOL and instead carry the

the cooperative. Otherwise, check the

Any cooperative that meets either of

NOL forward to future tax years. To do

“No” box.

the above requirements should check the

so, check the box in item 19 and file the

1. At any time during the 2004

“Yes” box. This applies even if the

return by its due date, including

calendar year, the cooperative had an

cooperative is a subsidiary member of

extensions (do not attach the statement

interest in or signature or other authority

one group and the parent corporation of

described in Temporary Regulations

over a bank, securities, or other financial

another.

section 301.9100-12T). Once made, the

account in a foreign country (see Form

If the cooperative is an “excluded

election is irrevocable. See Pub. 542,

TD F 90 – 22.1, Report of Foreign Bank

member” of a controlled group (see

section 172, and Form 1139 for more

and Financial Accounts), and

section 1563(b)(2)), it is still considered a

details.

a. The combined value of the

member of a controlled group for this

Cooperatives filing a consolidated

accounts was more than $10,000 at any

purpose.

return must check the box and attach the

time during the calendar year, and

Affiliated group. The term “affiliated

statement required by Temporary

b. The account was not with a U.S.

group” means one or more chains of

Regulations section 1.1502-21T(b)(3)(i) or

military banking facility operated by a U.S.

includible corporations (section 1504(a))

(ii).

financial institution.

connected through stock ownership with a

Item 20

2. The cooperative owns more than

common parent corporation. The common

50% of the stock in any corporation that

parent must be an includible corporation

Enter the amount of the NOL carryover to

would answer “Yes” to item 1 above.

and the following requirements must be

the tax year from prior years, even if

If “Yes” is checked for this question:

met:

some of the loss is used to offset income

-20-

Instructions For Form 990-C - Farmers' Cooperative Association Income Tax Return - Internal Revenue Service - 2004 Page 20

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