Fillable Form 1125-A - Cost Of Goods Sold printable pdf download

1125-A

Cost of Goods Sold

Form

OMB No. 1545-2225

(Rev. December 2012)

Attach to Form 1120, 1120-C, 1120-F, 1120S, 1065, or 1065-B.

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Department of the Treasury

Information about Form 1125-A and its instructions is at

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Internal Revenue Service

Employer identification number

Name

Inventory at beginning of year

Purchases .

Cost of labor

Additional section 263A costs (attach schedule) .

Other costs (attach schedule)

Total. Add lines 1 through 5 .

Inventory at end of year .

Cost of goods sold. Subtract line 7 from line 6. Enter here and on Form 1120, page 1, line 2 or the

appropriate line of your tax return (see instructions) .

Check all methods used for valuing closing inventory:

(i)

Cost

(ii)

Lower of cost or market

(iii)

Other (Specify method used and attach explanation.)

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Check if there was a writedown of subnormal goods

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Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970)

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If the LIFO inventory method was used for this tax year, enter amount of closing inventory computed

under LIFO .

If property is produced or acquired for resale, do the rules of section 263A apply to the entity (see instructions)? .

Yes

Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If “Yes,”

attach explanation

Yes

Section references are to the Internal

Under this accounting method, inventory

ending on or after December 31, 2000, has

Revenue Code unless otherwise noted.

costs for raw materials purchased for use

average annual gross receipts of $10

in producing finished goods and

million or less for the 3 prior tax years, (b)

General Instructions

merchandise purchased for resale are

whose principal business activity is not an

deductible in the year the finished goods or

ineligible activity, and (c) whose business is

Purpose of Form

merchandise are sold (but not before the

not a tax shelter (as defined in section 448

year you paid for the raw materials or

(d)(3)). See Rev. Proc. 2002-28, 2002-18

Use Form 1125-A to calculate and deduct

merchandise, if you are also using the cash

I.R.B. 815.

cost of goods sold for certain entities.

method).

Uniform capitalization rules. The uniform

Who Must File

If you account for inventoriable items in

capitalization rules of section 263A

the same manner as materials and supplies

generally require you to capitalize, or

Filers of Form 1120, 1120-C, 1120-F,

that are not incidental, you can currently

include in inventory, certain costs incurred

1120S, 1065, or 1065-B, must complete

in connection with the following.

deduct expenditures for direct labor and all

and attach Form 1125-A if the applicable

indirect costs that would otherwise be

• The production of real property and

entity reports a deduction for cost of goods

included in inventory costs. See the

tangible personal property held in inventory

sold.

instructions for lines 2 and 7.

or held for sale in the ordinary course of

Inventories

For additional guidance on this method

business.

of accounting, see Pub. 538, Accounting

Generally, inventories are required at the

• Real property or personal property

Periods and Methods. For guidance on

beginning and end of each tax year if the

(tangible and intangible) acquired for resale.

adopting or changing to this method of

production, purchase, or sale of

• The production of real property and

accounting, see Form 3115, Application for

merchandise is an income-producing

tangible personal property by a corporation

Change in Accounting Method, and its

factor. See Regulations section 1.471-1. If

for use in its trade or business or in an

instructions.

inventories are required, you generally

activity engaged in for profit.

must use an accrual method of accounting

Qualifying taxpayer. A qualifying

See the discussion on section 263A

for sales and purchases of inventory items.

taxpayer is a taxpayer that, (a) for each

uniform capitalization rules in the

prior tax year ending after December 16,

Exception for certain taxpayers. If you

instructions for your tax return before

1998, has average annual gross receipts of

are a qualifying taxpayer or a qualifying

completing Form 1125-A. Also see

$1 million or less for the 3 prior tax years

small business taxpayer (defined below),

Regulations sections 1.263A-1 through

and (b) its business is not a tax shelter (as

you can adopt or change your accounting

1.263A-3. See Regulations section

defined in section 448(d)(3)). See Rev.

method to account for inventoriable items

1.263A-4 for rules for property produced in

Proc. 2001-10, 2001-2 I.R.B. 272.

in the same manner as materials and

a farming business.

supplies that are not incidental.

Qualifying small business taxpayer. A

qualifying small business taxpayer is a

taxpayer that, (a) for each prior tax year

1125-A

For Paperwork Reduction Act Notice, see instructions.

Form

(Rev. 12-2012)

Cat. No. 55988R

Form 1125-A - Cost Of Goods Sold

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