2018 Instructions for Form 1120 - IRS tax forms

1 Userid: CPMS chema: instrxLeadpct: 100%Pt. size: 9 Draft Ok to PrintAH XSL/XMLF ileid: .. ions/I1120/2018/A/XML/Cycle07/source(Ini t. & Date) _____Page 1 of 29 15:03 - 16-Jan-2019 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before for form Corporation Income Tax ReturnDepartment of the TreasuryInternal Revenue ServiceSection references are to the Internal Revenue Code unless otherwise 's of Missing Taxpayer Advocate Deposit of To Make a Contribution To Reduce Debt Held by the To Get forms and of Must To To Must Preparer the Tax and Off to Whole forms and Statements That May Be and Identification Number (EIN)..9 Total Return, Final Return, Name Change, or Address C. Dividends, Inclusions, and Special J. Tax Computation and K. Other L. Balance Sheets per M-1.

2 reconciliation of Income (Loss) per Books With Income per Business Activity DevelopmentsFor the latest information about developments related to form 1120 and its Instructions , such as legislation enacted after they were published, go to 's NewTax rates. For tax years beginning after 2017, the Tax Cuts and Jobs Act ( 115-97) replaced the graduated corporate tax structure with a flat 21% corporate tax rate. See the Instructions for schedule J, Part I, line minimum tax. The alternative minimum tax does not apply to corporations for tax years beginning after December 31, 2017. In addition, corporations may treat a portion of their prior year alternative minimum tax credit carryover as refundable. See form 8827. Also see the Instructions for schedule J, Part III, line erosion minimum tax. If the corporation had gross receipts of at least $500 million in any one of the 3 tax years preceding the current tax year, complete form 8991.

3 See section 59A and the Instructions for form 8991. Also see the Instructions for schedule J, Part I, line 3, and the Instructions for schedule K, Question business taxpayers. Effective for tax years beginning after 2017, 115-97 expanded the eligibility of small business taxpayers to use the cash method. See Accounting Methods, change for filing returns. The filing address for certain returns filed after June 17, 2019, has changed. See Where To File, on business interest ex-pense. For tax years beginning after 2017, taxpayers who deduct business interest are required to file form 8990, Limitation on Business Interest Expense Under Section 163(j), unless an exception for filing is met. See the Instructions for schedule K, Questions 23 and 24. For more information, see form 8990 and the Instructions for form intangible low-taxed income (GILTI). 115-97 enacted new section 951A, which requires shareholders of controlled foreign corporations (CFCs) to include in gross income the shareholder's GILTI for years in which they are shareholders of CFCs for tax years of CFCs beginning after December 31, 2017.

4 Use form 8992 to figure the domestic corporation's GILTI. See section 951A and the Instructions for form 8992 for more intangible income (FDII). New section 250 allows a domestic corporation a deduction for the eligible percentage of FDII and GILTI. Section 250 is effective for tax years beginning after December 31, 2017. Use form 8993 to figure the amount of the eligible deduction for FDII and GILTI under section 250. See section 250 and form 8993 for more for foreign-source portion of dividends received by domestic cor-porations from specified 10%-owned foreign corporations. 115-97 enacted new section 245A. Section 245A permits certain domestic corporations that are shareholders of specified 10%-owned foreign corporations a 100% deduction for the foreign source portion of any dividend received from that specified 10%-owned foreign corporation. Section 245A applies to all dividend distributions after December 31, 2017.

5 See new section of deferred foreign income upon transition to participation ex-emption system of taxation. shareholders of certain specified foreign corporations (as defined under section 965(e), as amended by 115-97) may have an inclusion under section 965 based on the accumulated post-1986 deferred foreign income of the specified foreign corporations determined as of November 2, 2017, or December 31, 2017. The shareholders may elect to pay the liability under section 965 in eight installments. See section 965, as production activities deduc-tion (DPAD). The DPAD has been repealed for tax years beginning after 2017 with limited exceptions. See Line 26. Other Deductions, operating loss. The 2-year carryback rule does not apply to NOLs arising in tax years ending after December 31, 2017. Exceptions apply to certain farming losses and NOLs of insurance companies other than life insurance companies.

6 See section 172(b). Also see Net operating loss (NOL), party amounts paid or ac-crued in hybrid transactions or with hybrid entities. A deduction for certain interest or royalty paid or accrued to a Jan 16, 2019 Cat. No. 11455 TPage 2 of 29 Fileid: .. ions/I1120/2018/A/XML/Cycle07/source15:0 3 - 16-Jan-2019 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before party pursuant to a hybrid transaction or by, or to, a hybrid entity may be disallowed to the extent the related party, under its tax laws, does not include the amount in income or is allowed a deduction with respect to the amount. See section 267A for more information. Also see the Instructions for schedule K, Question rules for eligible gains inves-ted in Qualified Opportunity Funds. Effective December 22, 2017, section 1400Z-2 provides shareholders investing eligible gains in Qualified Opportunity Funds (QOFs) tax-favored investments.

7 If the corporation is operating as a QOF, form 8996 may be required. See form 8996 and the Instructions for form 8996. Also see form 1120, schedule K, Question for paid family and medical leave. Corporations may qualify for a credit for wages paid in tax years beginning after 2017 to qualifying employees on family and medical leave. See section 45S. Also see form 8994 and its the time these Instructions went to print, several credits and deductions available to corporations expired December 31, 2017. To find out if legislation extended the credits and deductions and made them available for 2018, go to ofMissing ChildrenThe Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children (NCMEC). Photographs of missing children selected by the Center may appear in Instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a Taxpayer Advocate ServiceThe Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights.

8 TAS's job is to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of a taxpayer, the corporation has rights that the IRS must abide by in its dealings with the corporation. TAS can help the corporation if: A problem is causing financial difficulty for the business. The business is facing an immediate threat of adverse ! The corporation has tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date TAS tax toolkit at can help the corporation understand these has offices in every state, the District of Columbia, and Puerto Rico. Local advocates' numbers are in their local directories and at The corporation can also call TAS at also works to resolve large-scale or systemic problems that affect many taxpayers. If the corporation knows of one of these broad issues, please report it to TAS through the Systemic Advocacy Management System at more information, go to Deposit of RefundTo request a direct deposit of the corporation's income tax refund into an account at a bank or other financial institution, attach form 8050, Direct Deposit of Corporate Tax Refund.

9 See the Instructions for line To Make a Contribution To Reduce Debt Held by the PublicTo help reduce debt held by the public, make a check payable to Bureau of the Public Debt. Send it to: Bureau of the Public Debt, Department G, Box 2188, Parkersburg, WV 26106-2188. Or, enclose a check with the income tax not add the contributions to any tax the corporation may owe. Contributions to reduce debt held by the public are deductible subject to the rules and limitations for charitable To Get Formsand PublicationsInternet. You can access the IRS website 24 hours a day, 7 days a week, at to: Download forms , Instructions , and publications; Order IRS products online; Research your tax questions online; Search publications online by topic or keyword; View Internal Revenue Bulletins (IRBs) published in recent years; and Sign up to receive local and national tax news by forms and publications.

10 The corporation can download or print all of the forms and publications it may need on Otherwise, the corporation can go to to place an order and have forms mailed to it. The corporation should receive its order within 10 business InstructionsPurpose of FormUse form 1120, Corporation Income Tax Return, to report the income, gains, losses, deductions, credits, and to figure the income tax liability of a Must FileUnless exempt under section 501, all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. Domestic corporations must file form 1120, unless they are required, or elect to file a special return. See Special Returns for Certain Organizations electing to be taxed as corpo-rations. A domestic entity electing to be classified as an association taxable as a corporation must file form 1120, unless it is required to or elects to file a special return listed under Special Returns for Certain Organizations below.