Instructions For Schedule C 1040 - 2016 (Page 3 of 18) in pdf

Capital Construction Fund

If both spouses participate, the in-

you do not have an EIN, leave line D

come and deductions are allocated to the

blank.

Do not claim on Schedule C or C-EZ the

spouses based on their distributive

deduction for amounts contributed to a

You need an EIN only if you have a

shares.

capital construction fund set up under

qualified retirement plan or are required

If either or both spouses are part-

chapter 535 of title 46 of the United

to file employment, excise, alcohol, to-

ners in a partnership, see Pub. 541.

States Code. Instead, reduce the amount

bacco, or firearms returns, or are a payer

If both spouses elected to treat the

you would otherwise enter on Form

of gambling winnings. If you need an

business as a qualifying joint venture,

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

EIN, see the Instructions for Form SS-4.

see

Qualified Joint

Venture, earlier.

duction. Next to line 43, enter “CCF”

Single-member LLCs. If you are the

The only states with community

and the amount of the deduction. For de-

sole owner of an LLC that is not treated

property laws are Arizona, California,

tails, see Pub. 595.

as a separate entity for federal income

Idaho, Louisiana, Nevada, New Mexico,

Additional Information

tax purposes, enter on line D the EIN

Texas, Washington, and Wisconsin.

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

See Pub. 334 for more information for

Reportable Transaction

legal name) for a qualified retirement

small businesses.

Disclosure Statement

plan, to file employment, excise, alco-

hol, tobacco, or firearms returns, or as a

Use Form 8886 to disclose information

Specific

payer of gambling winnings. If you do

for each reportable transaction in which

not have such an EIN, leave line D

you participated. Form 8886 must be

Instructions

blank.

filed for each tax year that your federal

income tax liability is affected by your

Line E

Filers of Form 1041. Do not complete

participation in the transaction. You may

the block labeled “Social security num-

have to pay a penalty if you are required

Enter your business address. Show a

ber (SSN).” Instead, enter the employer

to file Form 8886 but do not do so. You

street address instead of a box number.

identification number (EIN) issued to

may also have to pay interest and penal-

Include the suite or room number, if

the estate or trust on line D.

ties on any reportable transaction under-

any. If you conducted the business from

statements. The following are reportable

Line A

your home located at the address shown

transactions.

on Form 1040, page 1, you do not have

Any listed transaction that is the

Describe the business or professional ac-

to complete this line.

same as or substantially similar to tax

tivity that provided your principal

Line F

avoidance transactions identified by the

source of income reported on line 1. If

IRS.

you owned more than one business, you

Generally, you can use the cash method,

Any transaction offered to you or a

must complete a separate Schedule C for

accrual method, or any other method

related party under conditions of confi-

each business. Give the general field or

permitted by the Internal Revenue Code.

dentiality for which you paid an advisor

activity and the type of product or serv-

In all cases, the method used must clear-

a fee of at least $50,000.

ice. If your general field or activity is

ly reflect income. Unless you are a

qual-

Certain transactions for which you

wholesale or retail trade, or services

ifying taxpayer

or a

qualifying small

or a related party have contractual pro-

connected with production services

business taxpayer

(see the Part III in-

tection against disallowance of the tax

(mining, construction, or manufactur-

structions), you must use the accrual

benefits.

ing), also give the type of customer or

method for sales and purchases of inven-

Certain transactions resulting in a

client. For example, “wholesale sale of

tory items. Special rules apply to

loss of at least $2 million in any single

hardware to retailers” or “appraisal of

long-term contracts (see section 460 for

tax year or $4 million in any combina-

real estate for lending institutions.”

details).

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

Line B

single tax year if the loss arose from a

If you use the cash method, show all

foreign currency transaction defined in

items of taxable income actually or con-

Enter on line B the six-digit code from

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

structively received during the year (in

the

Principal Business or Professional

loss flows through from an S corpora-

cash, property, or services). Income is

Activity Codes

chart at the end of these

tion or partnership.)

constructively received when it is credi-

instructions.

Certain transactions of interest en-

ted to your account or set aside for you

tered into after November 1, 2006, that

Line D

to use. Also, show amounts actually paid

are the same or substantially similar to

during the year for deductible expenses.

one of the types of transactions that the

Enter on line D the employer identifica-

However, if the payment of an expendi-

IRS has identified by published guid-

tion number (EIN) that was issued to

ture creates an asset having a useful life

ance as a transaction of interest.

you on Form SS-4. Do not enter your

that extends substantially beyond the

SSN on this line. Do not enter another

close of the year, it may not be deducti-

See the Instructions for Form 8886

taxpayer's EIN (for example, from any

for more details.

ble or may be deductible only in part for

Forms 1099-MISC that you received). If

the year of the payment. See chapter 1

of Pub. 535.

C-3

Instructions For Schedule C 1040 - 2016 Page 3

Related Articles

Related forms

Related Categories