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3 If you wish, you can submit comments to the IRS about draft or final forms, instructions, or publications at We cannot respond to all comments due to the high volume we receive and may not be able to consider many suggestions until the subsequent revision of the product. If you have comments on reducing paperwork and respondent (filer) burden, with respect to draft or final forms, please respond to the relevant information collection through the Federal Register process; for more info, click here. 2021 Department of the Treasury Internal Revenue Service Instructions for Form 1120-S. Income Tax Return for an S Corporation draft AS OF. Section references are to the Internal Revenue Contents Page shareholder's basis in the S corporation.

4 Code unless otherwise noted. Rev. Proc. 2021-48 permits S. Schedule M-1. Contents Page Reconciliation of Income corporations to treat tax-exempt income (Loss) per Books With resulting from the forgiveness of a PPP. Future Developments .. 1. Income (Loss) per Return .. 44 loan as received or accrued (1) as, and to What's New .. 1 the extent that, eligible expenses are paid Schedule M-2. Analysis of Photographs of Missing Children .. 1 AAA, PTEP, or incurred; (2) when the S corporation December 22, 2021. The Taxpayer Advocate Service .. 1 Accumulated E&P, and applies for forgiveness of the PPP loan ; or Direct Deposit of Refund .. 2 OAA.

5 44 (3) when forgiveness of the PPP loan is How To Get Forms and Principal Business Activity Codes .. 48 granted. See Schedule B, Question 12;. Publications .. 2 Index .. 51 Schedules K and K-1, lines 10 and 16(b);. General Instructions .. 2 and Schedules M-1, M-2, and M-3, later, Purpose of Form .. 2 Future Developments for PPP reporting instructions. For How To Make the Election .. 2 For the latest information about additional details about the timing of Who Must File .. 2 developments related to Form 1120-S and tax-exempt income related to forgiven Termination of Election .. 2 its instructions, such as legislation PPP loans, see Rev.

6 Proc. 2021-48, Electronic Filing .. 2 enacted after they were published, go to 2021-49 835, available at When To File .. 3 #REV- PROC-2021-48. Where To File .. 3. Who Must Sign .. 3 What's New Section 1061 reporting. Section 1061. Paid Preparer Authorization .. 3 recharacterizes certain long-term capital Schedules K-2 and K-3. The new Assembling the Return .. 4 gains of a partner that holds one or more Schedule K-2 (Form 1120-S) and Tax Payments .. 4 applicable partnership interests as Schedule K-3 (Form 1120-S) replace prior Electronic Deposit short-term capital gains. See Section 1061. line 14 and certain items on line 17 of Requirement.

7 4 Reporting Guidance FAQs. Schedule K, and box 14 and certain items Estimated Tax Payments .. 4 in box 17 of Schedule K-1 (Form 1120-S). Temporary allowance of 100% for Interest and Penalties .. 4 The new schedules are designed to business meals. A corporation is Accounting Methods .. 5 provide greater clarity for shareholders on allowed a 100% deduction for certain Accounting Period .. 5 how to figure their income tax liability business meals paid or incurred after 2020. Rounding Off to Whole with respect to items of international tax and before 2023. See Travel, meals, and Dollars .. 6 relevance, including claiming deductions entertainment.

8 Recordkeeping .. 6 and credits. Amended Return .. 6 Schedule K, line 16f. Line 16f is added Reminder Other Forms and for foreign taxes paid or accrued with Statements That May Be Election by a small business corpora- respect to basis adjustments and income tion. Don't file Form 1120-S unless the Required .. 6 reconciliation. At-Risk Limitations .. 7 corporation has filed or is attaching Form Passive Activity Limitations .. 8 2553, Election by a Small Business Note. Foreign taxes paid or accrued must Corporation. For details, see the Net Investment Income Tax also be reported on Schedule K-2 (Form Reporting Requirements .. 12 Instructions for Form 2553.)

9 1120-S) and Schedule K-3 (Form 1120-S). Specific Instructions .. 12 for foreign tax credit purposes. Income .. 13 Photographs of New item D added to Part I of Sched- Deductions .. 15 ule K-1. Item D is added to Part I of Missing Children Tax and Payments .. 20 Schedule K-1 for use in reporting the The Internal Revenue Service is a proud Schedule B. Other corporation's total number of shares for partner with the National Center for Information .. 21 the beginning and end of the tax year. Missing & Exploited Children (NCMEC). Schedules K and K-1 Photographs of missing children selected (General Instructions) .. 22 Certain cash contributions made in by the Center may appear in these Specific Instructions 2021.

10 Code G of Schedule K-1 (Form instructions on pages that would otherwise (Schedule K-1 Only) .. 23 1120-S), box 12, is now used to report be blank. You can help bring these Part I. Information About the certain cash contributions made in children home by looking at the Corporation .. 23 calendar year 2021. See Line 12a. photographs and calling 1-800-THE-LOST. Part II. Information About the Charitable Contributions under Specific (1-800-843-5678) if you recognize a child. Shareholder .. 24 Instructions for Schedules K and K-1. Specific Instructions (Schedules K and K-1, Paycheck Protection Program (PPP) The Taxpayer Advocate Part III).