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3 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. 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 .. 44 (3) when forgiveness of the PPP loan is How To Get Forms and Principal Business Activity Codes.

4 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. 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.

5 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 .. 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. 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.

6 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. 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).

7 22 Certain cash contributions made in by the Center may appear in these Specific Instructions 2021. 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) .. 24 loans. An S corporation should report Service Schedule L. Balance Sheets certain information related to a PPP loan. The Taxpayer Advocate Service (TAS) is per Books .. 43 The forgiveness of a PPP loan creates an independent organization within the tax-exempt income, which in turn affects a IRS that helps taxpayers and protects Dec 22, 2021 Cat.

8 No. 11515K. taxpayer rights. TAS's job is to ensure that election terminates on the first day of the every taxpayer is treated fairly and knows General Instructions 1st tax year beginning after the 3rd and understands their rights under the consecutive tax year. The corporation Taxpayer Bill of Rights. Purpose of form must pay a tax for each year it has excess Use form 1120-S to report the income, net passive income. See the line 22a As a taxpayer, the corporation has instructions for details on how to figure the rights that the IRS must abide by in its gains, losses, deductions, credits, and other information of a domestic tax. dealings with the corporation. TAS can help the corporation if: corporation or other entity for any tax year 3. The election is revoked. An election draft AS OF. A problem is causing financial difficulty covered by an election to be an S can be revoked only with the consent of for the business; corporation. shareholders who, at the time the The business is facing an immediate revocation is made, hold more than 50%.

9 Threat of adverse action; or How To Make the Election of the number of issued and outstanding The corporation has tried repeatedly to shares of stock (including nonvoting For details about the election, see form contact the IRS but no one has stock). The revocation can specify an 2553, Election by a Small Business responded, or the IRS hasn't responded effective revocation date that is on or after December 22, 2021. Corporation, and the Instructions for form by the date promised. the day the revocation is filed. If no date is 2553. specified, the revocation is effective at the TAS has offices in every state, the start of the tax year if the revocation is District of Columbia, and Puerto Rico. Who Must File made on or before the 15th day of the 3rd Local advocates' numbers are in their A corporation or other entity must file form month of that tax year. If no date is local directories and at 1120-S if (a) it elected to be an S specified and the revocation is made after The corporation by filing form 2553, (b) the the 15th day of the 3rd month of the tax corporation can also call TAS at IRS accepted the election, and (c) the year, the revocation is effective at the start 1-877-777-4778.

10 Election remains in effect. After filing form of the next tax year. 2553, you should have received TAS also works to resolve large-scale confirmation that form 2553 was To revoke the election, the corporation or systemic problems that affect many accepted. If you didn't receive notification must file a statement with the appropriate taxpayers. If the corporation knows of one of acceptance or nonacceptance of the service center listed under Where To File of these broad issues, please report it to election within 2 months of filing form in the Instructions for form 2553. In the TAS through the Systemic Advocacy 2553 (5 months if you checked box Q1 to statement, the corporation must notify the Management System at ask for a letter ruling), please follow up by IRS that it is revoking its election to be an calling 1-800-829-4933. Don't file form S corporation. The statement must be For more information, go to 1120-S for any tax year before the year signed by each shareholder who consents Advocate.