Instructions For Schedule C - Profit Or Loss From Business

spouses based on their distributive

capital construction fund set up under

of gambling winnings. If you need an

shares.

chapter 535 of title 46 of the United

EIN, see the Instructions for Form SS-4.

If either or both spouses are part-

States Code. Instead, reduce the amount

Single-member LLCs. If you are the

ners in a partnership, see Pub. 541.

you would otherwise enter on Form

sole owner of an LLC that is not treated

If both spouses elected to treat the

1040, line 43, by the amount of the de-

as a separate entity for federal income

business as a qualifying joint venture,

duction. Next to line 43, enter “CCF”

tax purposes, enter on line D the EIN

see

Qualified Joint

Venture, earlier.

and the amount of the deduction. For de-

that was issued to the LLC (in the LLC's

tails, see Pub. 595.

States with community property laws

legal name) for a qualified retirement

Additional Information

include Arizona, California, Idaho, Lou-

plan, to file employment, excise, alco-

isiana, Nevada, New Mexico, Texas,

hol, tobacco, or firearms returns, or as a

See Pub. 334 for more information for

Washington, and Wisconsin. See Pub.

payer of gambling winnings. If you do

small businesses.

555 for more information about com-

not have such an EIN, leave line D

munity property laws.

blank.

Reportable Transaction

Specific

Line E

Disclosure Statement

Instructions

Enter your business address. Show a

Use Form 8886 to disclose information

street address instead of a box number.

for each reportable transaction in which

Filers of Form 1041. Do not complete

Include the suite or room number, if

you participated. Form 8886 must be

the block labeled “Social security num-

any. If you conducted the business from

filed for each tax year that your federal

ber (SSN).” Instead, enter the employer

your home located at the address shown

income tax liability is affected by your

identification number (EIN) issued to

on Form 1040, page 1, you do not have

participation in the transaction. You may

the estate or trust on line D.

to complete this line.

have to pay a penalty if you are required

Line A

to file Form 8886 but do not do so. You

Line F

may also have to pay interest and penal-

Describe the business or professional ac-

ties on any reportable transaction under-

Generally, you can use the cash method,

tivity that provided your principal

an accrual method, or any other method

statements. The following are reportable

source of income reported on line 1. If

permitted by the Internal Revenue Code.

transactions.

you owned more than one business, you

In all cases, the method used must clear-

Any listed transaction that is the

must complete a separate Schedule C for

ly reflect income. Unless you are a

qual-

same as or substantially similar to tax

each business. Give the general field or

avoidance transactions identified by the

ifying taxpayer

or a

qualifying small

activity and the type of product or serv-

business taxpayer

(see the Part III in-

IRS.

ice. If your general field or activity is

structions), you must use an accrual

Any transaction offered to you or a

wholesale or retail trade, or services

method for sales and purchases of inven-

related party under conditions of confi-

connected with production services

dentiality for which you paid an advisor

tory items. Special rules apply to

(mining, construction, or manufactur-

long-term contracts (see section 460 for

a fee of at least $50,000.

ing), also give the type of customer or

details).

Certain transactions for which you

client. For example, “wholesale sale of

or a related party have contractual pro-

hardware to retailers” or “appraisal of

If you use the cash method, show all

tection against disallowance of the tax

real estate for lending institutions.”

items of taxable income actually or con-

benefits.

structively received during the year (in

Certain transactions resulting in a

Line B

cash, property, or services). Income is

loss of at least $2 million in any single

constructively received when it is credi-

tax year or $4 million in any combina-

Enter on line B the six-digit code from

ted to your account or set aside for you

tion of tax years. (At least $50,000 for a

the

Principal Business or Professional

to use. Also, show amounts actually paid

single tax year if the loss arose from a

Activity Codes

chart at the end of these

during the year for deductible expenses.

foreign currency transaction defined in

instructions.

However, if the payment of an expendi-

section 988(c)(1), whether or not the

ture creates an asset having a useful life

Line D

loss flows through from an S corpora-

that extends beyond 12 months or the

tion or partnership.)

end of the next taxable year, it may not

Enter on line D the employer identifica-

Certain transactions of interest en-

be deductible or may be deductible only

tion number (EIN) that was issued to

tered into after November 1, 2006, that

in part for the year of the payment. See

you on Form SS-4. Do not enter your

are the same or substantially similar to

chapter 1 of Pub. 535.

SSN on this line. Do not enter another

one of the types of transactions that the

taxpayer's EIN (for example, from any

IRS has identified by published guid-

If you use an accrual method, report

Forms 1099-MISC that you received). If

ance as a transaction of interest.

income when you earn it and deduct ex-

you do not have an EIN, leave line D

penses when you incur them even if you

See the Instructions for Form 8886

blank.

do not pay them during the tax year. Ac-

for more details.

You need an EIN only if you have a

crual-basis taxpayers are put on a cash

Capital Construction Fund

qualified retirement plan or are required

basis for deducting business expenses

Do not claim on Schedule C or C-EZ the

to file employment, excise, alcohol, to-

owed to a related cash-basis taxpayer.

deduction for amounts contributed to a

bacco, or firearms returns, or are a payer

Other rules determine the timing of de-

C-3

Instructions For Schedule C - Profit Or Loss From Business - 2017 Page 3

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