Instructions For Form 1120 - Schedule B - 2014 printable pdf download

Schedule B (Form 1120) (Rev. 12-2014)

Page

General Instructions

Question 5. Changes in Accounting Principle

The term “change in accounting principle,” means a

Section references are to the Internal Revenue Code

change from one generally accepted accounting principle

unless otherwise noted.

to another generally accepted accounting principle as

Future Developments

described in Statement of Financial Accounting

Standards (SFAS) No. 154—Accounting Changes and

For the latest information about developments related to

Error Corrections.

Schedule B (Form 1120) and its instructions, such as

Answer “Yes” if a change in accounting principle

legislation enacted after they were published, go to

occurred during the tax year that affected (or is expected

to affect) the amount of income reported for financial

What's New

statement purposes.

Some filers of Form 1120, U.S. Corporation Income Tax

If the corporation has audited financial

Return, that file Schedule M-3 (Form 1120), Net Income

statements, any changes in accounting

TIP

(Loss) Reconciliation for Corporations With Total Assets

principle should be identified in footnotes to

of $10 Million or More, with tax years ending December

those statements.

31, 2014, or later, are not required to file Schedule B

(Form 1120). See Who Must File, later.

Question 6. Change in Method of Accounting

Corporations are generally required to file Form 3115,

Purpose of Form

Application for Change in Accounting Method, or a

Use Schedule B (Form 1120) to provide answers to

statement in lieu thereof, to request a change in a

additional questions for filers of Schedule M-3 (Form

method of accounting. See the Instructions for Form

1120).

3115 for information on requesting a change in

accounting method.

Who Must File

Question 7. Voluntary Employees’ Beneficiary

Generally, filers of Form 1120 that file Schedule M-3

Association Trusts

(Form 1120), must complete and file Schedule B (Form

1120). However, for tax years ending December 31, 2014,

Employers that establish and fund welfare benefit plans

or later, filers that (a) are required to file Schedule M-3

on behalf of their employees do so through a tax-exempt

and have less than $50 million in total assets at the end of

trust that is referred to as a voluntary employees’

the tax year or (b) are not required to file Schedule M-3

beneficiary association (VEBA). See section 501(c)(9) and

and voluntarily file Schedule M-3, are not required to file

Regulations sections 1.501(c)(9)-1 through 1.501(c)(9)-8

Schedule B (Form 1120). See the Instructions for

for details.

Schedule M-3 (Form 1120) for more information.

Answer “Yes” if the corporation owned any VEBA trusts

In the case of a consolidated group, a parent

that were used to hold funds designated for employee

corporation files one Schedule B for the entire group.

benefits.

Question 8. Indirect Costs

Specific Instructions

Section 446(a) and Regulation section 1.446-1(a)(1)

Question 1. Partnership Allocations

generally provide that taxable income shall be computed

under the method of accounting on the basis of which the

Answer “Yes” if this corporation is a partner in a

corporation regularly computes its income in keeping its

partnership and has received special allocations of

books. An exception applies if book income does not

income, gain, loss, deduction, or credit from such

clearly reflect income.

partnership.

Answer “Yes” if the corporation, during the tax year,

Example. P, a corporation, joins with B, an individual,

used an allocation method for indirect costs capitalized

in forming the PB Partnership. P and B each contribute

to self-constructed assets that varied from its financial

$50,000 in cash to PB Partnership. Profits and losses are

statement method of accounting. Otherwise, answer

allocated equally, with the exception of depreciation,

“No.” Also answer “No” if the corporation used the same

which is allocated 99% to P and 1% to B.

method of allocating indirect costs to self-constructed

P answers “Yes” to question 1 because its 99%

assets, but capitalized a different amount due to

allocation of depreciation deductions from PB Partnership

differences in the amount of costs which are includible

is disproportionate to its ratio of sharing other items of

in the computation of income for the tax year.

income, gain, loss, deduction, or credit from PB

Question 9. Mixed Service Costs

partnership.

Answer “Yes” if the corporation, during the tax year,

treated purchasing, handling, and storage, as discussed

in Regulations sections 1.263A-3(c)(1) through (5), and as

defined in Regulations section 1.263A-1(e)(3)(ii)(F), (G),

and (H), as mixed-service costs as defined in Regulations

section 1.263A-1(e)(4)(ii)(C). Otherwise, answer “No.”

Instructions For Form 1120 - Schedule B - 2014

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