Instructions For Schedule O (Form 1120) - 2008 printable pdf download

Instructions for Schedule O

Department of the Treasury

Internal Revenue Service

(Form 1120)

(Rev. December 2008)

Consent Plan and Apportionment Schedule for a Controlled Group

the other members of the controlled

Section references are to the Internal

Completing and Filing

Revenue Code unless otherwise noted.

group:

Schedule O

•

Are adopting an apportionment

What’s New

The filing of a Schedule O by a

plan, effective for the current tax year;

•

component member provides the

Line 3 has 2 additional check

Are amending the current existing

required information as to the status

boxes to address situations where an

apportionment plan;

•

of the group’s apportionment plan.

apportionment plan is terminated and

Are terminating the existing

Such information must indicate, when

the remaining members have either

apportionment plan and not adopting

applicable, whether all the component

adopted or have not adopted a new

a new plan;

•

members of the controlled group are

apportionment plan.

Are terminating the current

•

adopting, amending, or terminating

apportionment plan and adopting a

Line 4 has been simplified and now

an apportionment plan. If all such

new plan;

only applies when there is no change

•

members complete the required

Have no apportionment plan in

in the controlled group’s status with

written agreement setting forth the

effect and are not adopting an

respect to adopting, amending, or

terms of the adopted or amended

apportionment plan; or

terminating an apportionment plan.

•

apportionment plan (or an agreement

Already have an apportionment

New line 6a allows the corporation

to terminate a previously adopted

plan in effect.

to elect to pay the highest rate of tax

plan), then each member of that

to avoid underpayment penalties.

Check the applicable box on page

group may rely on this agreement as

New line 6b allows members of the

1 of Schedule O.

the basis for representing on its

controlled group to elect to apportion

Schedule O that the other component

the additional tax under section

Who Must File

members of the group have also

11(b)(1) by using the FIFO method

A corporation must file Schedule O

consented to adopting, amending, or

rather than the proportionate method

with its income tax return, amended

terminating the apportionment plan.

(the default method).

•

return, or claim for refund for each tax

The agreement must be signed by a

All members of a controlled group

year that the corporation is a

person authorized to sign on behalf of

are treated as one taxpayer for

component member of a controlled

each component member of the

purposes of applying the election

group, even if no apportionment plan

controlled group and retained. No

under section 168(k)(4). See Rev.

is currently in effect. See Definitions

member should attach this agreement

Proc. 2009-16, 2009-6 I.R.B. 449, for

and Special Rules below.

(or a copy of it) to their Federal

guidance regarding allocating the

income tax returns. Each member

bonus depreciation amount among

If one or more of the component

must keep as part of its records either

the members of the controlled group

members of a controlled group are

the original or a copy of the signed

and reporting each member’s

also members of a consolidated

agreement. The agreement must

proportionate share on Schedule O

group, then the common parent of

contain the group’s apportionment

(Form 1120).

that consolidated group must file, as

methodology (for example,

part of its consolidated income tax

percentages) for each tax benefit item

General Instructions

return, one Schedule O on behalf of

that is apportioned.

the members of that consolidated

group. No subsidiary of that

Purpose of Schedule

consolidated group should file a

Definitions and Special

A corporation that is a member of a

Schedule O on its own behalf. The

Rules

controlled group must use Schedule

Schedule O should contain the

O to report the apportionment of

required consolidated information for

Types of Controlled Groups

taxable income, income tax, and

all members of the consolidated

certain tax benefits between the

group. See Identifying Information on

Parent-subsidiary group. A

members of the controlled group. The

page 6.

parent-subsidiary group is one or

members of the controlled group that

more chains of corporations

Exception. If all of the members of

are component members (defined on

connected through stock ownership

a parent-subsidiary controlled group

page 2) will be subject to limitations

with a common parent corporation if:

that are required to file a U.S. tax

on the use of certain tax benefits for

•

Stock possessing at least 80% of

return join in filing the same

their applicable tax year. See

the total combined voting power of all

consolidated tax return, then the

Apportionment of Tax Benefit Items

classes of stock entitled to vote or at

parent of that group does not have to

on page 4.

file a Schedule O on behalf of the

least 80% of the total value of shares

Also use this schedule to indicate

group. In this case, Schedule J, line

of all classes of stock of each of the

that the member filing this return

1, of Form 1120 should not be

corporations, except the common

consents to and represents that all

checked.

parent corporation, is directly or

Cat. No. 48211V

Instructions For Schedule O (Form 1120) - 2008

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