Publication 542 (Rev. January 2024)

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Department of the Treasury

Internal Revenue Service

Publication 542

(Rev. January 2024)

Cat. No. 15072O

Corporations

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Contents

Future Developments ....................... 2

Photographs of Missing Children .............. 2

Introduction .............................. 2

Businesses Taxed as Corporations ............ 2

Property Exchanged for Stock ................ 3

Capital Contributions ....................... 4

Filing and Paying Income Taxes ............... 5

Income Tax Return ....................... 5

Penalties .............................. 5

Estimated Tax .......................... 6

U.S. Real Property Interest ................. 7

Estimated Tax Worksheet .................... 7

Accounting Methods ....................... 8

Accounting Periods ........................ 8

Recordkeeping ............................ 9

Income, Deductions, and Special Provisions ..... 9

Costs of Going Into Business ................ 9

Related Persons ......................... 9

Corporate Preference Items ................ 10

Dividends-Received Deduction ............. 10

Extraordinary Dividends .................. 11

Below-Market Loans ..................... 11

Charitable Contributions .................. 12

Capital Losses ......................... 13

Net Operating Losses .................... 14

At-Risk Limits .......................... 14

Passive Activity Limits .................... 15

Figuring Tax ............................. 15

Tax Rates ............................ 15

Base Erosion Minimum Tax ................ 15

Corporate Alternative Minimum Tax (CAMT) .... 15

Credits ............................... 15

Recapture Taxes ........................ 15

Accumulated Earnings Tax .................. 15

Distributions to Shareholders ............... 16

Money or Property Distributions ............. 16

Distributions of Stock or Stock Rights ......... 16

Constructive Distributions ................. 17

Reporting Dividends and Other Distributions .... 17

How To Get Tax Help ....................... 19

Other Useful Forms for Corporations .......... 23

Index .................................. 27

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Future Developments

For the latest information about developments related to

Pub. 542, such as legislation enacted after it was

published, go to IRS.gov/Pub542. For changes that may

affect the current tax year, see the Instructions for Form

1120 or the applicable instructions for the corporation’s

tax return.

What's New

New corporate alternative minimum tax. For tax years

beginning after 2022, the Inflation Reduction Act of 2022

amended section 55 of the Internal Revenue Code to im-

pose a new corporate alternative minimum tax (CAMT)

based on the adjusted financial statement income (AFSI)

of an applicable corporation. See Corporate Alternative

Minimum Tax (CAMT), later.

Form 1120-W now historical. Form 1120-W, Estimated

Tax for Corporations, and the Instructions for Form

1120-W are now historical. The 2022 revisions were the

last revisions of both the form and its instructions. Prior

versions are available on IRS.gov.

Photographs of Missing

Children

The 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

800-THE-LOST (800-843-5678) if you recognize a child.

Introduction

This publication discusses the general tax laws that apply

to ordinary domestic corporations. It provides supplemen-

tal federal income tax information for corporations. It also

supplements the information provided in the Instructions

for Form 1120, U.S. Corporation Income Tax Return. How-

ever, the information given does not cover every situation

and is not intended to replace the law or change its mean-

ing.

Comments and suggestions. We welcome your com-

ments about this publication and suggestions for future

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to:

Internal Revenue Service

Tax Forms and Publications

1111 Constitution Ave. NW, IR-6526

Washington, DC 20224

Although we can’t respond individually to each com-

ment received, we do appreciate your feedback and will

consider your comments and suggestions as we revise

our tax forms, instructions, and publications. Do not send

tax questions, tax returns, or payments to the above ad-

dress.

Getting answers to your tax questions. If you have

a tax question not answered by this publication or the How

To Get Tax Help section at the end of this publication, go

to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the search

feature or viewing the categories listed.

Getting tax forms, instructions, and publications.

Go to IRS.gov/Forms to download current and prior-year

forms, instructions, and publications.

Ordering tax forms, instructions, and publications.

Go to IRS.gov/OrderForms to order current forms, instruc-

tions, and publications; call 800-829-3676 to order

prior-year forms and instructions. The IRS will process

your order for forms and publications as soon as possible.

Do not resubmit requests you’ve already sent us. You can

get forms and publications faster online.

Additional forms. A list of other forms and statements

that a corporation may need to file is included at the end

of this publication. Also, see the instructions for the corpo-

ration’s tax return for additional forms and statements that

may be required.

Useful Items

You may want to see:

Publication

510 Excise Taxes (Including Fuel Tax Credits and

Refunds)

538 Accounting Periods and Methods

544 Sales and Other Dispositions of Assets

550 Investment Income and Expenses

925 Passive Activity and At-Risk Rules

946 How To Depreciate Property

Businesses Taxed as

Corporations

The rules used to determine whether a business is taxed

as a corporation changed for businesses formed after

1996.

Business formed before 1997. A business formed be-

fore 1997 and taxed as a corporation under the old rules

will generally continue to be taxed as a corporation.

510

538

544

550

925

946

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Business formed after 1996. The following businesses

formed after 1996 are taxed as corporations.

•

A business formed under a federal or state law that re-

fers to it as a corporation, body corporate, or body po-

litic.

•

A business formed under a state law that refers to it as

a joint-stock company or joint-stock association.

•

An insurance company.

•

Certain banks.

•

A business wholly owned by a state or local govern-

ment.

•

A business specifically required to be taxed as a cor-

poration by the Internal Revenue Code (for example,

certain publicly traded partnerships).

•

Certain foreign businesses.

•

Any other business that elects to be taxed as a corpo-

ration.

Limited liability company (LLC). An LLC may be clas-

sified for federal income tax purposes as either a partner-

ship, a corporation, or an entity disregarded as an entity

separate from its owner by applying the rules in Treasury

Regulations section 301.7701-3. An LLC can elect to be

treated as an association taxable as a corporation by filing

Form 8832, Entity Classification Election. See the Instruc-

tions for Form 8832. For more information about LLCs,

see Pub. 3402, Taxation of Limited Liability Companies.

S corporations. Some corporations may meet the quali-

fications for electing to be S corporations. For information

on S corporations, see the Instructions for Form 1120-S.

Personal service corporations. A corporation is a per-

sonal service corporation if it meets all of the following re-

quirements.

1. Its principal activity during the “testing period” is per-

forming personal services (defined later). Generally,

the testing period for any tax year is the prior tax year.

If the corporation has just been formed, the testing pe-

riod begins on the first day of its tax year and ends on

the earlier of:

a. The last day of its tax year, or

b. The last day of the calendar year in which its tax

year begins.

2. Its employee-owners substantially perform the serv-

ices in (1) above. This requirement is met if more than

20% of the corporation's compensation cost for its ac-

tivities of performing personal services during the

testing period is for personal services performed by

employee-owners.

3. Its employee-owners own more than 10% of the fair

market value of its outstanding stock on the last day of

the testing period.

Personal services. Personal services include any ac-

tivity performed in the fields of accounting, actuarial sci-

ence, architecture, consulting, engineering, health (includ-

ing veterinary services), law, and the performing arts.

Employee-owners. A person is an employee-owner of

a personal service corporation if both of the following ap-

ply.

1. That person is an employee of the corporation or per-

forms personal services for, or on behalf of, the corpo-

ration (even if that person is an independent contrac-

tor for other purposes) on any day of the testing

period.

2. That person owns any stock in the corporation at any

time during the testing period.

Other rules. For other rules that apply to personal

service corporations, see Accounting Periods, later.

Closely held corporations. A corporation is closely held

if all of the following apply.

1. It is not a personal service corporation.

2. At any time during the last half of the tax year, more

than 50% of the value of its outstanding stock is, di-

rectly or indirectly, owned by or for five or fewer indi-

viduals. “Individual” includes certain trusts and private

foundations.

For rules for determining stock ownership, see section 544

of the Internal Revenue Code.

Other rules. For the at-risk rules that apply to closely

held corporations, see At-Risk Limits, later.

Property Exchanged for Stock

If you transfer property (or money and property) to a cor-

poration in exchange for stock in that corporation (other

than nonqualified preferred stock), and immediately after-

ward you are in control of the corporation, the exchange is

usually not taxable. This rule applies both to individuals

and to groups who transfer property to a corporation. It

also applies whether the corporation is being formed or is

already operating. It does not apply in the following situa-

tions.

•

The corporation is an investment company.

•

You transfer the property in a bankruptcy or similar

proceeding in exchange for stock used to pay cred-

itors.

•

The stock is received in exchange for the corporation's

debt (other than a security) or for interest on the cor-

poration's debt (including a security) that accrued

while you held the debt.

See Property Exchanged for Stock in chapter 2 of Pub.

544 for more information.

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Both the corporation and any person involved in a

nontaxable exchange of property for stock must

attach to their income tax returns for the year of

the exchange, the complete statement of all facts perti-

nent to the exchange required by Treasury Regulations

section 1.351-3.

Control of a corporation. To be in control of a corpora-

tion, you or your group of transferors must own, immedi-

ately after the exchange, at least 80% of the total com-

bined voting power of all classes of stock entitled to vote

and at least 80% of the outstanding shares of each class

of nonvoting stock.

Loss on exchange. If you have a loss from an exchange

and own, directly or indirectly, more than 50% of the cor-

poration's stock, you cannot deduct the loss. For more in-

formation, see Nondeductible Loss under Sales and Ex-

changes Between Related Persons in chapter 2 of Pub.

544.

Basis of stock or other property received. The basis

of the stock you receive is generally the adjusted basis of

the property you transfer. Increase this amount by any

amount treated as a dividend, plus any gain recognized

on the exchange. Decrease this amount by any cash you

received, the fair market value of any other property you

received, and any loss recognized on the exchange. Also

decrease this amount by the amount of any liability the

corporation or another party to the exchange assumed

from you, unless payment of the liability gives rise to a de-

duction when paid.

Further decreases may be required when the corpora-

tion or another party to the exchange assumes from you a

liability that gives rise to a deduction when paid, if the ba-

sis of the stock would otherwise be higher than its fair

market value on the date of the exchange. This rule does

not apply if the entity assuming the liability acquired either

substantially all of the assets or the trade or business with

which the liability is associated.

The basis of any other property you receive is its fair

market value on the date of the trade.

Basis of property transferred. A corporation that re-

ceives property from you in exchange for its stock gener-

ally has the same basis you had in the property, increased

by any gain you recognized on the exchange. However,

the increase for the gain recognized may be limited. For

more information, see section 362 of the Internal Revenue

Code.

If property is transferred to a corporation subject to sec-

tion 362(e)(2) of the Internal Revenue Code, the transferor

and the acquiring corporation may elect, under section

362(e)(2)(C), to reduce the transferor's basis in the stock

received instead of reducing the acquiring corporation's

basis in the property transferred. Once made, the election

is irrevocable. For more information, see section 362(e)(2)

and Treasury Regulations section 1.362-4. If an election is

made, a statement must be filed in accordance with Treas-

ury Regulations section 1.362-4(d)(3).

CAUTION

Capital Contributions

This section explains the tax treatment of contributions

from shareholders and nonshareholders.

Paid-in capital. Generally, contributions to the capital of

a corporation, whether or not by shareholders, are paid-in

capital. These contributions are not taxable to the corpo-

ration. However, after December 22, 2017, the following

nonshareholder contributions to the capital of a corpora-

tion are not considered nontaxable paid-in capital.

•

Any contribution in aid of construction or any other

contribution as a customer or potential customer.

•

Any contribution by any civic group.

•

Any contribution by any governmental entity. However,

see the special rule below.

For contributions made after December 31, 2020, a

special rule applies to contributions to the capital of water

and sewerage disposal utilities. Under the special rule,

any amount of money or property received after Decem-

ber 31, 2020, as a contribution in aid of construction or a

contribution to the capital of a regulated public utility that

provides water or sewerage disposal services is eligible

for exclusion from income under section 118 of the Inter-

nal Revenue Code.

Basis. The corporation's basis of property contributed to

capital by a shareholder is the same as the basis the

shareholder had in the property, increased by any gain the

shareholder recognized on the exchange. However, the in-

crease for the gain recognized may be limited. For more

information, see Basis of property transferred above and

section 362 of the Internal Revenue Code.

The basis of property contributed to capital by a person

other than a shareholder is zero.

If a corporation receives a cash contribution from a per-

son other than a shareholder, the corporation must reduce

the basis of any property acquired with the contribution

during the 12-month period beginning on the day it re-

ceived the contribution by the amount of the contribution.

If the amount contributed is more than the cost of the

property acquired, then reduce, but not below zero, the

basis of the other properties held by the corporation on

the last day of the 12-month period in the following order.

1. Depreciable property.

2. Amortizable property.

3. Property subject to cost depletion but not to percent-

age depletion.

4. All other remaining properties.

Reduce the basis of property in each category to zero

before going on to the next category.

There may be more than one piece of property in each

category. Base the reduction of the basis of each property

on the following ratio.

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Basis of each piece of property

Bases of all properties (within that category)

If the corporation wishes to make this adjustment in some

other way, it must get IRS approval. The corporation files a

request for approval with its income tax return for the tax

year in which it receives the contribution.

Filing and Paying Income

Taxes

The federal income tax is a pay-as-you-go tax. A corpora-

tion must generally make estimated tax payments as it

earns or receives income during its tax year. After the end

of the year, the corporation must file an income tax return.

This section will help you determine when and how to pay

and file corporate income taxes.

For certain corporations affected by federally de-

clared disasters such as hurricanes, the due

dates for filing returns, paying taxes, and perform-

ing other time-sensitive acts may be extended. The IRS

may also forgive the interest and penalties on any under-

paid tax for the length of any extension. For more informa-

tion, visit

IRS.gov/DisasterTaxRelief.

Income Tax Return

This section will help you determine when and how to re-

port a corporation's income tax.

Who must file. Unless exempt under section 501 of the

Internal Revenue Code, all domestic corporations in exis-

tence for any part of a tax year (including corporations in

bankruptcy) must file an income tax return whether or not

they have taxable income.

Which form to file. A domestic entity electing to be clas-

sified as an association taxable as a corporation must

generally file Form 1120, U.S. Corporation Income Tax Re-

turn, to report its income, gains, losses, deductions, cred-

its, and to figure its income tax liability. Certain organiza-

tions and entities must, or may elect to, file special returns.

For more information, see Special Returns for Certain Or-

ganizations in the Instructions for Form 1120.

Electronic filing. Corporations can generally electroni-

cally file (e-file) Form 1120 and certain related forms,

schedules, and attachments. However, for returns filed on

or after January 1, 2024, corporations that file 10 or more

returns are required to efile. However, these corporations

can request a waiver of the electronic filing requirements.

For more information on electronic filing, see the Instruc-

tions for Form 1120, or the applicable instructions for your

income tax return.

When to file. Generally, a corporation must file its in-

come tax return by the 15th day of the 4th month after the

end of its tax year. A new corporation filing a short-period

TIP

return must generally file by the 15th day of the 4th month

after the short period ends. A corporation that has dis-

solved must generally file by the 15th day of the 4th month

after the date it dissolved.

However, a corporation with a fiscal tax year ending

June 30 must file by the 15th day of the 3rd month after

the end of its tax year. A corporation with a short tax year

ending anytime in June will be treated as if the short pe-

riod ended June 30 and must file by the 15th day of the

3rd month after the end of its tax year.

If the due date falls on a Saturday, Sunday, or legal holi-

day, the due date is extended to the next business day.

Extension of time to file. File Form 7004, Application

for Automatic Extension of Time To File Certain Business

Income Tax, Information, and Other Returns, to request an

extension of time to file a corporation’s income tax return.

The IRS will grant the extension if the corporation com-

pletes the form properly, files it, and pays any tax due by

the original due date for the return.

Form 7004 does not extend the time for paying the tax

due on the return. Interest, and possibly penalties, will be

charged on any part of the final tax due not shown as a

balance due on Form 7004. The interest is figured from

the original due date of the return to the date of payment.

For more information, see the Instructions for Form

7004.

How to pay your taxes. A corporation must pay its tax

due in full no later than the due date for filing its tax return

(not including extensions).

Electronic Federal Tax Payment System (EFTPS).

Corporations must generally use EFTPS to make deposits

of all tax liabilities (including social security, Medicare,

withheld income, excise, and corporate income taxes). For

more information on EFTPS and enrollment, visit

www.eftps.gov.

Penalties

Generally, if the corporation receives a notice

about interest and penalties after it files its return,

send the IRS an explanation and we will deter-

mine if the corporation meets reasonable-cause criteria.

Do not attach an explanation when the corporation's re-

turn is filed. See the instructions for your income tax re-

turn.

Late filing of return. A corporation that does not file its

tax return by the due date, including extensions, may be

penalized 5% of the unpaid tax for each month or part of a

month the return is late, up to a maximum of 25% of the

unpaid tax. If the corporation is charged a penalty for late

payment of tax (discussed next) for the same period of

time, the penalty for late filing is reduced by the amount of

the penalty for late payment. A minimum penalty applies

for a return that is over 60 days late. The minimum penalty

amount may be adjusted for inflation. See the Instructions

for Form 1120 (or the instructions for your applicable re-

turn) for the minimum penalty amount for the current tax

year. The penalty will not be imposed if the corporation

CAUTION

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can show the failure to file on time was due to a reasona-

ble cause.

Note. If the corporation is charged a penalty for late

payment of tax (discussed next) for the same period of

time, the penalty for late filing is reduced by the amount of

the penalty for late payment.

Late payment of tax. A corporation that does not pay

the tax when due may be penalized half of 1% of the un-

paid tax for each month or part of a month the tax is not

paid, up to a maximum of 25% of the unpaid tax. The pen-

alty will not be imposed if the corporation can show that

the failure to pay on time was due to a reasonable cause.

Trust fund recovery penalty. If federal income, social

security, or Medicare taxes that a corporation must with-

hold from employee wages are not withheld or are not de-

posited or paid to the U.S. Treasury, the trust fund recov-

ery penalty may apply. The penalty is the full amount of

the unpaid trust fund tax. This penalty may apply to you if

these unpaid taxes cannot be immediately collected from

the business.

The trust fund recovery penalty may be imposed on all

persons who are determined by the IRS to be responsible

for collecting, accounting for, and paying these taxes, and

who acted willfully in not doing so.

A responsible person can be an officer or employee of

a corporation, an accountant, or a volunteer director/

trustee. A responsible person may also include one who

signs checks for the corporation or otherwise has authority

to cause the spending of business funds.

“Willfully” means voluntarily, consciously, and intention-

ally. A responsible person acts willfully if the person knows

the required actions are not taking place or recklessly dis-

regards obvious and known risks to the government’s right

to receive trust fund taxes.

For more information on withholding and paying these

taxes, see Pub. 15 (Circular E), Employer's Tax Guide.

Other penalties. Other penalties can be imposed for

negligence, substantial understatement of tax, reportable

transaction understatements, and fraud. See sections

6662, 6662A, and 6663 of the Internal Revenue Code.

Estimated Tax

Generally, a corporation must make installment payments

if it expects its estimated tax for the year to be $500 or

more. If the corporation does not pay the installments

when they are due, it could be subject to an underpay-

ment penalty. This section will explain how to avoid this

penalty.

When to pay estimated tax. Installment payments are

due by the 15th day of the 4th, 6th, 9th, and 12th months

of the corporation's tax year.

Example 1. Your corporation's tax year ends Decem-

ber 31. Installment payments are due on April 15, June

15, September 15, and December 15.

Example 2. Your corporation's tax year ends June 30.

Installment payments are due on October 15, December

15, March 15, and June 15.

If any due date falls on a Saturday, Sunday, or legal hol-

iday, the installment is due on the next business day.

How to figure each required installment. The Estima-

ted Tax Worksheet, later, can be used to figure each re-

quired installment. Form 1120-W, Estimated Tax for Cor-

porations, is now historical. Prior versions are available on

IRS.gov

You generally use one of the following two methods to

figure each required installment. You should use the

method that yields the smallest installment payments. In

these discussions, “return” generally refers to the corpora-

tion's original return. However, an amended return is con-

sidered the original return if it is filed by the due date (in-

cluding extensions) of the original return.

Method 1. Each required installment is 25% of the in-

come tax the corporation will show on its return for the cur-

rent year.

Method 2. Each required installment is 25% of the in-

come tax shown on the corporation's return for the previ-

ous year.

To use Method 2:

1. The corporation must have filed a return for the previ-

ous year,

2. The return must have been for a full 12 months, and

3. The return must have shown a positive tax liability (not

zero).

Also, if the corporation is a large corporation, it can use

Method 2 to figure the first installment only.

Large corporations. A large corporation is a corporation

that had, or whose predecessor had, taxable income of $1

million or more for any of the 3 tax years immediately pre-

ceding the current tax year, or if less, the number of years

the corporation has been in existence. For this purpose,

taxable income is modified to exclude net operating loss

and capital loss carrybacks or carryovers.

Annualized income installment method and/or adjus-

ted seasonal installment method. If the corporation's

income is expected to vary during the year because, for

example, it operates its business on a seasonal basis, it

may be able to lower the amount of one or more required

installments by using the annualized income installment

method and/or the adjusted seasonal installment method.

For example, a ski shop, which receives most of its in-

come during the winter months, may be able to benefit

from using one or both of these methods in figuring one or

more of its required installments. See sections 6655(e)(2)

and 6655(e)(3) of the Internal Revenue Code.

Refiguring required installments. If after the corpora-

tion figures and deposits its estimated tax it finds that its

tax liability for the year will be more or less than originally

estimated, it may have to refigure its required installments

to see if an underpayment penalty may apply. An

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immediate catch-up payment should be made to reduce

any penalty resulting from the underpayment of any earlier

installments.

Underpayment penalty. If the corporation does not pay

a required installment of estimated tax by its due date, it

may be subject to a penalty. The penalty is figured sepa-

rately for each installment due date. Therefore, the corpo-

ration may owe a penalty for an earlier due date, even if it

paid enough tax later to make up the underpayment. This

is true even if the corporation is due a refund when its re-

turn is filed.

Form 2220. Use Form 2220, Underpayment of Esti-

mated Tax by Corporations, to determine if a corporation

is subject to the penalty for underpayment of estimated

tax and to figure the amount of the penalty.

If the corporation is charged a penalty, the amount of

the penalty depends on the following three factors.

1. The amount of the underpayment.

2. The period during which the underpayment was due

and unpaid.

3. The interest rate for underpayments published quar-

terly by the IRS in the Internal Revenue Bulletin.

A corporation generally does not have to file Form 2220

with its income tax return because the IRS will figure any

penalty and bill the corporation. However, even if the cor-

poration does not owe a penalty, complete and attach the

form to the corporation's tax return if any of the following

apply.

1. The annualized income installment method was used

to figure any required installment.

2. The adjusted seasonal installment method was used

to figure any required installment.

3. The corporation is a large corporation figuring its first

required installment based on the prior year's tax.

How to pay estimated tax. A corporation is generally re-

quired to use EFTPS to pay its taxes. See Electronic Fed-

eral Tax Payment System (EFTPS), earlier.

Quick refund of overpayments. A corporation that has

overpaid its estimated tax for the tax year may be able to

apply for a quick refund. Use Form 4466, Corporation Ap-

plication for Quick Refund of Overpayment of Estimated

Tax, to apply for a quick refund of an overpayment of esti-

mated tax. A corporation can apply for a quick refund if the

overpayment is:

•

At least 10% of its expected tax liability, and

•

At least $500.

Use Form 4466 to figure the corporation's expected tax li-

ability and the overpayment of estimated tax.

File Form 4466 after the end of the corporation’s tax

year, but before the corporation files its income tax return.

Do not file Form 4466 before the end of the corporation's

tax year. An extension of time to file the corporation's in-

come tax return will not extend the time for filing Form

4466. The IRS will act on the form within 45 days from the

date you file it.

U.S. Real Property Interest

If a domestic corporation acquires a U.S. real property in-

terest from a foreign person or firm, the corporation may

have to withhold tax on the amount it pays for the property.

The amount paid includes cash, the fair market value of

other property, and any assumed liability. If a domestic

corporation distributes a U.S. real property interest to a

foreign person or firm, it may have to withhold tax on the

Estimated Tax Worksheet Keep for Your Records

Note. This worksheet may be used as a guide in figuring the required estimated tax installments.

1. Enter the expected taxable income .............................................................

2. Multiply line 1 by the maximum tax rate that is in effect for the applicable tax year. For example, in 2023 the maximum

rate is 21%. ............................................................................. 2.

3. Tax credits. For information on tax credits the corporation can take, see the instructions for Form 1120, Schedule J,

Part I, lines 5a through 5e, or the instructions for the applicable lines and schedule of the corporation’s income tax

return .................................................................................. 3.

4. Subtract line 3 from line 2 ....................................................................

5. Other taxes. For information on other taxes the corporation may owe, see the instructions for Form 1120, Schedule J,

or the instructions for the applicable lines and schedule of the corporation's income tax return .................. 5.

6. Total tax. Add lines 4 and 5 ..................................................................

7. Enter any credit for federal tax paid on fuels and other refundable credits. For information on other refundable credits,

see the instructions for Form 1120, Schedule J, or the instructions for the applicable line of the corporation’s income tax

return .................................................................................. 7.

8. Subtract line 7 from line 6. If the result is less than $500, the corporation is not required to make estimated tax

payments ............................................................................... 8.

9. Enter the tax shown on the corporation’s prior year’s tax return. If the tax is zero or the tax year was for less than 12

months, skip this line and enter the amount from line 8 on line 10 ....................................... 9.

10. Enter the smaller of line 8 or line 9. If the corporation is required to skip line 9, enter the amount from line 8 ........

10.

11. Required installments. Enter 25% of line 10. If the corporation uses the annualized income installment method, or

adjusted seasonal installment method, or is a large corporation, an additional computation may be needed .......

11.

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fair market value of the property. A corporation that fails to

withhold may be liable for the tax and any penalties and

interest that apply. For more information, see section 1445

of the Internal Revenue Code; Pub. 515, Withholding of

Tax on Nonresident Aliens and Foreign Entities; Form

8288, U.S. Withholding Tax Return for Dispositions by For-

eign Persons of U.S. Real Property Interests; and Form

8288-A, Statement of Withholding on Dispositions by For-

eign Persons of U.S. Real Property Interests.

Accounting Methods

An accounting method is a set of rules used to determine

when and how income and expenses are reported. Taxa-

ble income should be determined using the method of ac-

counting regularly used in keeping the corporation's books

and records. In all cases, the method used must clearly

show taxable income.

Generally, permissible methods include:

•

Cash,

•

Accrual, or

•

Any other method authorized by the Internal Revenue

Code.

Accrual method. Generally, a corporation, other than a

qualified personal service corporation (as defined in sec-

tion 448(d)(2) of the Internal Revenue Code), must use an

accrual method of accounting if it is not a small business

taxpayer (as defined in section 448(c) of the Internal Rev-

enue Code). A corporation engaged in farming operations

must also use an accrual method, unless it qualifies as a

small business taxpayer.

Under an accrual method of accounting, you generally

report income in the year it is earned and deduct or capi-

talize expenses in the year incurred. The purpose of an

accrual method of accounting is to match income and ex-

penses in the correct year.

See Pub. 538 for additional information and special

rules.

Expenses. Generally, an accrual basis taxpayer can

deduct accrued expenses in the tax year when:

1. All events that determine the liability have occurred,

2. The amount of the liability can be figured with reason-

able accuracy, and

3. Economic performance takes place with respect to

the expense.

There are exceptions to the economic performance rule

for certain items, including recurring expenses. See sec-

tion 461(h) of the Internal Revenue Code and the related

regulations for the rules for determining when economic

performance takes place.

Percentage of completion method. Long-term con-

tracts (except for certain real property construction con-

tracts) must generally be accounted for using the percent-

age of completion method described in section 460 of the

Internal Revenue Code.

Mark-to-market accounting method. Generally, deal-

ers in securities must use the mark-to-market accounting

method described in section 475 of the Internal Revenue

Code. Under this method, any security held by a dealer as

inventory must be included in inventory at its fair market

value. Any security not held as inventory at the close of

the tax year is treated as sold at its fair market value on

the last business day of the tax year. Any gain or loss must

be taken into account in determining gross income. The

gain or loss taken into account is treated as ordinary gain

or loss.

Dealers in commodities and traders in securities and

commodities can elect to use the mark-to-market account-

ing method.

Change in accounting method. A corporation can

change its method of accounting used to report taxable in-

come (for income as a whole or for the treatment of any

material item). The corporation must file Form 3115, Appli-

cation for Change in Accounting Method. See the Instruc-

tions for Form 3115 and Pub. 538 for more information

and exceptions.

Section 481(a) adjustment. If the corporation's taxa-

ble income for the current tax year is figured under a

method of accounting different from the method used in

the preceding tax year, the corporation may have to make

an adjustment under section 481(a) of the Internal Reve-

nue Code to prevent amounts of income or expense from

being duplicated or omitted. The section 481(a) adjust-

ment period is generally 1 year for a net negative adjust-

ment and 4 years for a net positive adjustment. However,

exceptions to the general section 481(a) adjustment pe-

riod may apply. Also, in some cases, a corporation can

elect to modify the section 481(a) adjustment period. The

corporation may have to complete the appropriate lines of

Form 3115 to make an election. See the Instructions for

Form 3115 for more information and exceptions.

Accounting Periods

A corporation must figure its taxable income on the basis

of a tax year. A tax year is the annual accounting period a

corporation uses to keep its records and report its income

and expenses. Generally, a corporation can use either a

calendar year or a fiscal year as its tax year. Unless spe-

cial rules apply, a corporation generally adopts a tax year

by filing its first federal income tax return using that tax

year. For more information, see Pub. 538.

Personal service corporation. A personal service cor-

poration must use a calendar year as its tax year unless:

•

It elects to use a 52-53-week tax year that ends with

reference to the calendar year or tax year elected un-

der section 444 of the Internal Revenue Code;

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•

It can establish a business purpose for a different tax

year and obtains approval of the IRS (see the

Instructions for Form 1128 and Pub. 538); or

•

It elects under section 444 to have a tax year other

than a calendar year. Use Form 8716, Election To

Have a Tax Year Other Than a Required Tax Year, to

make the election.

If a personal service corporation makes a section 444

election, its deduction for certain amounts paid to em-

ployee-owners may be limited. See Schedule H (Form

1120), Section 280H Limitations for a Personal Service

Corporation (PSC), to figure the maximum deduction.

Change of tax year. Generally, a corporation must get

the consent of the IRS before changing its tax year by fil-

ing Form 1128, Application To Adopt, Change, or Retain a

Tax Year. However, under certain conditions, a corporation

can change its tax year without getting the consent. For

more information, see Form 1128 and Pub. 538.

Recordkeeping

A corporation should keep its records for as long as they

may be needed for the administration of any provision of

the Internal Revenue Code. Usually records that support

items of income, deductions, or credits on the return must

be kept for 3 years from the date the return is due or filed,

whichever is later. Keep records that verify the corpora-

tion's basis in property for as long as they are needed to

figure the basis of the original or replacement property.

The corporation should keep copies of all filed returns.

They help in preparing future and amended returns and in

the calculation of earnings and profits.

Income, Deductions, and

Special Provisions

Rules on income and deductions that apply to individuals

also apply, for the most part, to corporations. However, the

following special provisions apply only to corporations.

Costs of Going Into Business

When you go into business, treat all eligible costs you in-

cur to get your business started as capital expenses.

However, a corporation can elect to deduct a limited

amount of start-up or organizational costs. Any costs not

deducted can be amortized.

Start-up costs are costs for creating an active trade or

business or investigating the creation or acquisition of an

active trade or business. Organizational costs are the di-

rect costs of creating the corporation.

For more information on deducting or amortizing

start-up and organizational costs, see the instructions for

your income tax return.

Related Persons

A corporation that uses an accrual method of accounting

cannot deduct business expenses and interest owed to a

related person who uses the cash method of accounting

until the corporation makes the payment and the corre-

sponding amount is includible in the related person's

gross income. Determine the relationship as of the end of

the tax year for which the expense or interest would other-

wise be deductible. If a deduction is denied, the rule will

continue to apply even if the corporation's relationship with

the person ends before the expense or interest is includi-

ble in the gross income of that person. These rules also

deny the deduction of losses on the sale or exchange of

property between related persons.

Related persons. For purposes of this rule, the following

persons are related to a corporation.

1. Another corporation that is a member of the same

controlled group (as defined in section 267(f) of the

Internal Revenue Code).

2. An individual who owns, directly or indirectly, more

than 50% of the value of the outstanding stock of the

corporation.

3. A trust fiduciary, if the trust or the grantor of the trust

owns, directly or indirectly, more than 50% of the

value of the outstanding stock of the corporation.

4. An S corporation, if the same persons own more than

50% in value of the outstanding stock of each corpo-

ration.

5. A partnership, if the same persons own more than

50% in value of the outstanding stock of the corpora-

tion and more than 50% of the capital or profits inter-

est in the partnership.

6. Any employee-owner, if the corporation is a personal

service corporation (see Personal service corpora-

tion, earlier), regardless of the amount of stock owned

by the employee-owner.

Ownership of stock. To determine whether an indi-

vidual directly or indirectly owns any of the outstanding

stock of a corporation, the following apply.

1. Stock owned, directly or indirectly, by or for a corpora-

tion, partnership, estate, or trust, is treated as being

owned proportionately by or for its shareholders, part-

ners, or beneficiaries.

2. An individual is treated as owning the stock owned,

directly or indirectly, by or for the individual's family.

Family includes only brothers and sisters (including

half brothers and half sisters), a spouse, ancestors,

and lineal descendants.

3. Any individual owning (other than by applying (2)

above) stock in a corporation, is treated as also own-

ing the stock owned directly or indirectly by that indi-

vidual's partner.

4. To apply (1), (2), or (3) above, stock constructively

owned by a person under (1) is treated as actually

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owned by that person. But stock constructively owned

by an individual under (2) or (3) is not treated as ac-

tually owned by the individual for applying either (2) or

(3) to make another person the constructive owner of

that stock.

Reallocation of income and deductions. Where it is

necessary to clearly show income or prevent tax evasion,

the IRS can reallocate gross income, deductions, credits,

or allowances between two or more organizations, trades,

or businesses owned or controlled directly, or indirectly, by

the same interests.

Complete liquidations. The disallowance of losses from

the sale or exchange of property between related persons

does not apply to liquidating distributions.

More information. For more information about the rela-

ted person rules, see Pub. 544.

Corporate Preference Items

A corporation must make special adjustments to certain

items before it takes them into account in determining its

taxable income. These items are known as “corporate

preference items” and they include the following.

•

Gain on the disposition of section 1250 property.

For more information, see Section 1250 Property un-

der Depreciation Recapture in chapter 3 of Pub. 544.

•

Percentage depletion for iron ore and coal (in-

cluding lignite).

•

Amortization of pollution control facilities. For

more information, see section 291(a)(4) of the Internal

Revenue Code.

•

Mineral exploration and development costs.

For more information on corporate preference items, see

section 291 of the Internal Revenue Code.

Dividends-Received Deduction

A corporation can deduct a percentage of certain divi-

dends received during its tax year. This section discusses

the general rules that apply. The deduction is figured on

Form 1120, Schedule C, or the applicable schedule of

your income tax return. For more information, see the In-

structions for Form 1120, or the instructions for your appli-

cable income tax return.

Dividends from foreign corporations. Generally, 100%

of the foreign-source portion of dividends (and items trea-

ted as dividends) from 10%-owned foreign corporations

may be deducted. The stock with respect to which such

dividends are received must meet a special 365-day hold-

ing period and does not include certain “hybrid” dividend

payments. See Form 1120, Schedule C (or the applicable

schedule of your income tax return), for details regarding

this deduction. Also see the Instructions for Form 1120 or

the instructions for your applicable income tax return.

Note. This deduction is not subject to the limit on de-

duction for dividends related to dividends from domestic

corporations, discussed below.

Dividends from domestic corporations. A corporation

can deduct, within certain limits, 50% of the dividends re-

ceived if the corporation receiving the dividend owns less

than 20% of the corporation distributing the dividend. If

the corporation owns 20% or more of the distributing cor-

poration's stock, it can, subject to certain limits, deduct

65% of the dividends received.

Ownership. For these rules, ownership is based on

the amount of voting power and value of the paying corpo-

ration's stock (other than certain preferred stock) that the

receiving corporation owns.

Small business investment companies. Small busi-

ness investment companies can deduct 100% of the divi-

dends received from taxable domestic corporations.

Dividends from regulated investment companies.

Regulated investment company dividends received are

subject to certain limits. Capital gain dividends received

from a regulated investment company do not qualify for

the deduction. For more information, see section 854 of

the Internal Revenue Code.

No deduction allowed for certain dividends. Corpora-

tions cannot take a deduction for dividends received from

the following entities.

1. A real estate investment trust (REIT).

2. A corporation exempt from tax under section 501 or

521 of the Internal Revenue Code either for the tax

year of the distribution or the preceding tax year.

3. A corporation whose stock was held less than 46 days

during the 91-day period beginning 45 days before the

stock became ex-dividend with respect to the divi-

dend. “Ex-dividend” means the holder has no rights to

the dividend.

4. A corporation whose dividends were received on any

share of preferred stock that are attributable to peri-

ods totaling more than 366 days if such stock was

held for less than 91 days during the 181-day period

that began 90 days before the ex-dividend date.

5. Any corporation, if your corporation is under an obli-

gation (pursuant to a short sale or otherwise) to make

related payments with respect to positions in substan-

tially similar or related property.

Dividends on deposits. Dividends on deposits or with-

drawable accounts in domestic building and loan associa-

tions, mutual savings banks, cooperative banks, and simi-

lar organizations are interest, not dividends. They do not

qualify for this deduction.

Limit on deduction for dividends. The total deduction

for dividends received or accrued is generally limited (in

the following order) to:

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1. 65% of the difference between taxable income and

the 100% deduction allowed for dividends received

from affiliated corporations, or by a small business in-

vestment company, for dividends received or accrued

from 20%-owned corporations; then

2. 50% of the difference between taxable income (re-

duced by total dividends received from 20%-owned

corporations) and the 100% deduction allowed for div-

idends received from affiliated corporations, or by a

small business investment company, for dividends re-

ceived or accrued from less-than-20%-owned corpo-

rations (reducing taxable income by the total divi-

dends received from 20%-owned corporations).

Figuring the limit. In figuring the limit, determine taxa-

ble income without the following items.

1. The net operating loss deduction.

2. The deduction under section 199A for income attribut-

able to domestic production activities of specified ag-

ricultural or horticultural cooperatives.

3. The deduction allowed by sections 243(a)(1) and

245(a) of the Internal Revenue Code.

4. The deduction allowed by section 250 of the Internal

Revenue Code.

5. Any adjustment due to the nontaxable part of an ex-

traordinary dividend (see Extraordinary Dividends,

later).

6. Any capital loss carryback to the tax year.

Effect of net operating loss. If a corporation has a

net operating loss (NOL) for a tax year, the limit of 65% (or

50%) of taxable income does not apply. To determine

whether a corporation has an NOL, figure the divi-

dends-received deduction without the 65% (or 50%) of

taxable income limit.

Example 1. A corporation loses $75,000 from opera-

tions. It receives $100,000 in dividends from a

20%-owned corporation. Its taxable income is $25,000

($100,000 – $75,000) before the deduction for dividends

received. If it claims the full dividends-received deduction

of $65,000 ($100,000 × 65%) and combines it with an op-

erations loss of $75,000, it will have an NOL of ($40,000).

Therefore, the 65% of taxable income limit does not apply.

The corporation can deduct the full $65,000.

Example 2. Assume the same facts as in Example 1,

except that the corporation only loses $30,000 from oper-

ations. Its taxable income is $70,000 before the deduction

for dividends received. After claiming the dividends-re-

ceived deduction of $65,000 ($100,000 × 65%), its taxa-

ble income is $5,000. Because the corporation will not

have an NOL after applying a full dividends-received de-

duction, its allowable dividends-received deduction is limi-

ted to 65% of its taxable income, or $45,500 ($70,000 ×

65%).

Extraordinary Dividends

If a corporation receives an extraordinary dividend on

stock held 2 years or less before the dividend announce-

ment date, it must generally reduce its basis in the stock

by the nontaxed part of the dividend. The nontaxed part is

any dividends-received deduction allowable for the divi-

dends.

Extraordinary dividend. An extraordinary dividend is

any dividend on stock that equals or exceeds a certain

percentage of the corporation's adjusted basis in the

stock. The percentages are:

1. 5% for stock preferred as to dividends, or

2. 10% for other stock.

Treat all dividends received that have ex-dividend dates

within an 85-consecutive-day period as one dividend.

Treat all dividends received that have ex-dividend dates

within a 365-consecutive-day period as extraordinary divi-

dends if the total of the dividends exceeds 20% of the cor-

poration's adjusted basis in the stock.

Disqualified preferred stock. Any dividend on disquali-

fied preferred stock is treated as an extraordinary dividend

regardless of the period of time the corporation held the

stock.

Disqualified preferred stock is any stock preferred as to

dividends if any of the following apply.

1. The stock when issued has a dividend rate that de-

clines (or can reasonably be expected to decline) in

the future.

2. The issue price of the stock exceeds its liquidation

rights or stated redemption price.

3. The stock is otherwise structured to avoid the rules for

extraordinary dividends and to enable corporate

shareholders to reduce tax through a combination of

dividends-received deductions and loss on the dispo-

sition of the stock.

More information. For more information on extraordinary

dividends, see section 1059 of the Internal Revenue

Code.

Below-Market Loans

If a corporation receives a below-market loan and uses

the proceeds for its trade or business, it may be able to

deduct the forgone interest as well as any interest the cor-

poration actually paid or accrued.

A below-market loan is a loan on which no interest is

charged or on which interest is charged at a rate below the

applicable federal rate. A below-market loan is generally

treated as an arm's-length transaction in which the bor-

rower is considered as having received both the following.

•

A loan in exchange for a note that requires payment of

interest at the applicable federal rate.

•

An additional payment in an amount equal to the for-

gone interest.

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The borrower treats the additional payment as a gift, divi-

dend, contribution to capital, payment of compensation, or

other payment, depending on the substance of the trans-

action.

Foregone interest. For any period, forgone interest is

equal to:

1. The interest that would be payable for that period if in-

terest accrued on the loan at the applicable federal

rate and was payable annually on December 31, mi-

nus

2. Any interest actually payable on the loan for the pe-

riod.

More information. For more information on below-mar-

ket loans, including information on demand loans, gift

loans, and term loans, see section 7872 of the Internal

Revenue Code, the related regulations, and chapter 1 of

Pub. 550, Investment Income and Expenses.

Charitable Contributions

A corporation can claim a limited deduction for charitable

contributions made in cash or other property. The contri-

bution is deductible if made to, or for the use of, a qualified

organization. For more information on qualified organiza-

tions, see Pub. 526, Charitable Contributions. Also, see

Tax-Exempt Organization Search at IRS.gov/Charities, the

online search tool for finding information on organizations

eligible to receive tax-deductible contributions.

Note. You cannot take a deduction if any of the net

earnings of an organization receiving contributions benefit

any private shareholder or individual.

Cash method corporation. A corporation using the

cash method of accounting deducts contributions in the

tax year paid.

Accrual method corporation. A corporation using an

accrual method of accounting can choose to deduct un-

paid contributions for the tax year the board of directors

authorizes them if it pays them by the due date for filing

the corporation’s tax return (not including extensions).

Make the choice by reporting the contribution on the cor-

poration's return for the tax year. Attach a declaration stat-

ing that the board of directors adopted the resolution dur-

ing the tax year. The declaration must include the date the

resolution was adopted.

Limitations on deduction. A corporation cannot deduct

charitable contributions that exceed 10% of its taxable in-

come for the tax year. Figure taxable income for this pur-

pose without the following.

1. The deduction for charitable contributions.

2. The dividends-received deduction.

3. The deduction allowed under section 249 of the Inter-

nal Revenue Code for bond premium.

4. Any deduction for income attributable to domestic

production activities of specified agricultural or horti-

cultural cooperatives.

5. Any net operating loss carryback to the tax year.

6. Any capital loss carryback to the tax year.

Carryover of excess contributions. You can carry

over, within certain limits, to each of the subsequent 5

years any charitable contributions made during the current

year that exceed the 10% limit. You lose any excess not

used within that period. Do not deduct a carryover of ex-

cess contributions in the carryover year until after you de-

duct contributions made in that year (subject to the 10%

limit). You cannot deduct a carryover of excess contribu-

tions to the extent it increases a net operating loss carry-

over.

Farmers, ranchers, or Native Corporations. Corpora-

tions that are farmers, ranchers, or Native Corporations,

see section 170(b)(2) of the Internal Revenue Code for

special rules that may affect the deduction limit.

Cash contributions. A corporation must maintain a re-

cord of any contribution of cash, check, or other monetary

contribution, regardless of the amount. The record can be

a bank record, receipt, letter, or other written communica-

tion from the donee indicating the name of the organiza-

tion, the date of the contribution, and the amount of the

contribution. Keep the record of the contribution with the

other corporate records. Do not attach the records to the

corporation's return. For more information on cash contri-

butions, see Pub. 526.

Gifts of $250 or more. Generally, no deduction is al-

lowed for any contribution of $250 or more unless the cor-

poration gets a written acknowledgement from the donee

organization. The acknowledgement should show the

amount of cash contributed, a description of the property

contributed (but not its value), and either gives a descrip-

tion and a good faith estimate of the value of any goods or

services provided in return for the contribution or states

that no goods or services were provided in return for the

contribution. The acknowledgement must be obtained by

the due date (including extensions) of the return, or, if ear-

lier, the date the return was filed. Keep the acknowledge-

ment with other corporate records. Do not attach the ac-

knowledgement to the return.

Contributions of property other than cash. If a corpo-

ration (other than a closely held or a personal service cor-

poration) claims a deduction of more than $500 for contri-

butions of property other than cash, a schedule describing

the property and the method used to determine its fair

market value must be attached to the corporation's return.

In addition, the corporation should keep a record of:

•

The approximate date and manner of acquisition of

the donated property, and

•

The cost or other basis of the donated property held

by the donor for less than 12 months prior to contribu-

tion.

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Closely held and personal service corporations must

complete and attach Form 8283, Noncash Charitable

Contributions, to their returns if they claim a deduction of

more than $500 for noncash contributions. For all other

corporations, if the deduction claimed for donated prop-

erty exceeds $5,000, complete Form 8283 and attach it to

the corporation's return.

A corporation must obtain a qualified appraisal for all

deductions of property claimed in excess of $5,000. A

qualified appraisal is not required for the donation of cash,

publicly traded securities, inventory, and any qualified ve-

hicles sold by a donee organization without any significant

intervening use or material improvement. The appraisal

should be maintained with other corporate records and

only attached to the corporation's return when the deduc-

tion claimed exceeds $500,000 ($20,000 for donated art

work).

See Form 8283 for more information.

Qualified conservation contributions. If a corpora-

tion makes a qualified conservation contribution, the cor-

poration must provide information regarding the legal in-

terest being donated, the fair market value of the

underlying property before and after the donation, and a

description of the conservation purpose for which the

property will be used. For more information, see section

170(h) of the Internal Revenue Code.

Contributions of used vehicles. A corporation is al-

lowed a deduction for the contribution of used motor vehi-

cles, boats, and airplanes. The deduction is limited, and

other special rules apply. For more information, see Pub.

526.

Reduction for contributions of certain property.

For a charitable contribution of property, the corporation

must reduce the contribution by the sum of:

•

The ordinary income and short-term capital gain that

would have resulted if the property were sold at its fair

market value; and

•

For certain contributions, the long-term capital gain

that would have resulted if the property were sold at its

fair market value.

The reduction for the long-term capital gain applies to:

•

Contributions of tangible personal property for use by

an exempt organization for a purpose or function unre-

lated to the basis for its exemption;

•

Contributions of any property to or for the use of cer-

tain private foundations except for stock for which mar-

ket quotations are readily available; and

•

Contributions of any patent, certain copyrights, trade-

mark, trade name, trade secret, know-how, software

(that is a section 197 intangible), or similar property, or

applications or registrations of such property.

Larger deduction. A corporation (other than an S cor-

poration) may be able to claim a deduction equal to the

lesser of (a) the basis of the donated inventory or property

plus half of the inventory’s or property's appreciation (gain

if the donated inventory or property was sold at fair market

value on the date of the donation), or (b) two times basis

of the donated inventory or property. This deduction may

be allowed for certain contributions of the following.

•

Certain inventory and other property made to a donee

organization and used solely for the care of the ill, the

needy, and infants. Special rules apply to qualified

contributions of “apparently wholesome food” (see

section 170(e)(3)(C) of the Internal Revenue Code).

•

Scientific property constructed by the corporation

(other than an S corporation, personal holding com-

pany, or personal service corporation) and donated no

later than 2 years after substantial completion of the

construction. The property must be donated to a quali-

fied organization and its original use must be by the

donee for research, experimentation, or research

training within the United States in the area of physical

or biological science.

Contributions to organizations conducting lobbying

activities. Contributions made to an organization that

conducts lobbying activities are not deductible if:

•

The lobbying activities relate to matters of direct finan-

cial interest to the donor's trade or business, and

•

The principal purpose of the contribution was to avoid

federal income tax by obtaining a deduction for activi-

ties that would have been nondeductible under the

lobbying expense rules if conducted directly by the do-

nor.

More information. For more information on charitable

contributions, including substantiation and recordkeeping

requirements, see section 170 of the Internal Revenue

Code, the related regulations, and Pub. 526.

Capital Losses

A corporation can deduct capital losses only up to the

amount of its capital gains. In other words, if a corporation

has an excess capital loss, it cannot deduct the loss in the

current tax year. Instead, it carries the loss to other tax

years and deducts it from any net capital gains that occur

in those years.

A capital loss is carried to other years in the following

order.

1. 3 years prior to the loss year.

2. 2 years prior to the loss year.

3. 1 year prior to the loss year.

4. Any loss remaining is carried forward for 5 years.

When you carry a net capital loss to another tax year, treat

it as a short-term loss. It does not retain its original identity

as long term or short term.

Example. A calendar year corporation has a net

short-term capital gain of $3,000 and a net long-term capi-

tal loss of $9,000. The short-term gain offsets some of the

long-term loss, leaving a net capital loss of $6,000. The

corporation treats this $6,000 as a short-term loss when

carried back or forward.

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The corporation carries the $6,000 short-term loss

back 3 years. In year 1, the corporation had a net

short-term capital gain of $8,000 and a net long-term capi-

tal gain of $5,000. It subtracts the $6,000 short-term loss

first from the net short-term gain. This results in a net capi-

tal gain for year 1 of $7,000. This consists of a net

short-term capital gain of $2,000 ($8,000 − $6,000) and a

net long-term capital gain of $5,000.

S corporation status. A corporation may not carry a

capital loss from, or to, a year for which it is an S corpora-

tion.

Rules for carryover and carryback. When carrying a

capital loss from 1 year to another, the following rules ap-

ply.

•

When figuring the current year's net capital loss, you

cannot combine it with a capital loss carried from an-

other year. In other words, you can carry capital losses

only to years that would otherwise have a total net

capital gain.

•

If you carry capital losses from 2 or more years to the

same year, deduct the loss from the earliest year first.

•

You cannot use a capital loss carried from another

year to produce or increase a net operating loss in the

year to which you carry it back.

Refunds. When you carry back a capital loss to an earlier

tax year, refigure your tax for that year. If your corrected

tax is less than the tax you originally owed, use either

Form 1139, Corporate Application for Tentative Refund, or

Form 1120X, Amended U.S. Corporation Income Tax Re-

turn, to apply for a refund.

Form 1139. A corporation can get a refund faster by

using Form 1139. It cannot file Form 1139 before filing the

return for the corporation's capital loss year, but it must file

Form 1139 no later than 1 year after the year it sustains

the capital loss.

Form 1120X. If the corporation does not file Form

1139, it must file Form 1120X to apply for a refund. The

corporation must file the Form 1120X within 3 years of the

due date, including extensions, for filing the return for the

year in which it sustains the capital loss.

Net Operating Losses

A corporation generally figures and deducts a net operat-

ing loss (NOL) the same way an individual, estate, or trust

does. For more information on these general rules, includ-

ing the sequencing rule for when the corporation carries

two of more NOLs to the same year, see Pub. 536, Net

Operating Losses (NOLs) for Individuals, Estates, and

Trusts.

A corporation's NOL generally differs from individual,

estate, and trust NOLs in the following ways.

1. A corporation can take different deductions when fig-

uring an NOL.

2. A corporation must make different modifications to its

taxable income in the carryback or carryforward year

when figuring how much of the NOL is used and how

much is carried over to the next year.

3. A corporation uses different forms when claiming an

NOL deduction.

4. A corporation is not subject to section 461, which lim-

its the amount of losses from the trades or businesses

of noncorporate taxpayers.

For more information, including how to figure the NOL

deduction for the current tax year and any carryback or

carryforward, see the Instructions for Form 1139, and the

instructions for the corporation's tax return.

At-Risk Limits

The at-risk rules limit your losses from most activities to

your amount at risk in the activity. The at-risk limits apply

to certain closely held corporations (other than S corpora-

tions).

The amount at risk generally equals:

•

The money and the adjusted basis of property contrib-

uted by the taxpayer to the activity, and

•

The money borrowed for the activity.

Closely held corporation. For the at-risk rules, a corpo-

ration is a closely held corporation if, at any time during

the last half of the tax year, more than 50% in value of its

outstanding stock is owned directly or indirectly by, or for,

five or fewer individuals.

To figure if more than 50% in value of the stock is

owned by five or fewer individuals, apply the following

rules.

1. Stock owned, directly or indirectly, by or for a corpora-

tion, partnership, estate, or trust is considered owned

proportionately by its shareholders, partners, or bene-

ficiaries.

2. An individual is considered to own the stock owned,

directly or indirectly, by or for their family. Family in-

cludes only brothers and sisters (including half broth-

ers and half sisters), a spouse, ancestors, and lineal

descendants.

3. If a person holds an option to buy stock, they are con-

sidered to be the owner of that stock.

4. When applying (1) or (2) above, stock considered

owned by a person under (1) or (3) above is treated

as actually owned by that person. Stock considered

owned by an individual under (2) is not treated as

owned by the individual for again applying (2) to con-

sider another the owner of that stock.

5. Stock that may be considered owned by an individual

under either (2) or (3) above is considered owned by

the individual under (3).

More information. For more information on the at-risk

limits, see Pub. 925, Passive Activity and At-Risk Rules.

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Passive Activity Limits

The passive activity rules generally limit your losses from

passive activities to your passive activity income. Gener-

ally, you are in a passive activity if you have a trade or

business activity in which you do not materially participate

during the tax year, or you have a rental activity.

The passive activity rules apply to personal service cor-

porations and closely held corporations other than S cor-

porations.

Corporations subject to the passive activity limitations

must complete Form 8810. For more information on the

passive activity limits, see the Instructions for Form 8810

and Pub. 925.

Figuring Tax

After you figure a corporation's taxable income, you figure

its tax. This section discusses the tax rates, credits, and

recapture taxes.

Tax Rates

Corporations, including qualified personal service corpo-

rations, figure their tax by multiplying taxable income by

21% (0.21). If the corporation is a member of a controlled

group, the corporation must also complete Schedule O

(Form 1120), Consent Plan and Apportionment Schedule

for a Controlled Group, to report the apportionment of cer-

tain tax benefits between the members of the group. See

Schedule O (Form 1120) and the Instructions for Sched-

ule O (Form 1120) for more information.

Base Erosion Minimum Tax

If a corporation has gross receipts of at least $500 million

in any 1 of the 3 tax years preceding the current tax year, a

tax equal to the base erosion minimum tax amount for the

tax year may be imposed. This tax is reported using Form

8991. See the Instructions for Form 8991 for additional in-

formation.

Corporate Alternative Minimum Tax

(CAMT)

For tax years beginning after 2022, section 55 of the Inter-

nal Revenue Code imposes a new corporate alternative

minimum tax (CAMT) based on the adjusted financial

statement income of an applicable corporation. Unless a

filing exclusion applies, a corporation must use Form

4626, Alternative Minimum Tax—Corporations, to deter-

mine whether it is an applicable corporation, and if classi-

fied as an applicable corporation, to calculate CAMT. See

Form 4626 and the Instructions for Form 4626. Also, see

the Instructions for Form 1120 or the instructions for the

applicable corporation's tax return.

Note. For tax year 2023 for purposes of figuring any

penalty for underpayment of tax, applicable corporations

may exclude the CAMT tax liability when calculating the

required annual tax payment on Form 2220. See the in-

structions for the 2023 Form 2220.

Credits

A corporation's tax liability is reduced by allowable credits.

The following list includes some of the credits available to

corporations.

•

Foreign tax credit (see Form 1118).

•

Any qualified electric vehicle passive activity credit

from prior years allowed for the current year from Form

8834. See Form 8810, Corporate Passive Activity

Loss and Credit Limitations, to see if a credit is al-

lowed for the current year for personal service corpo-

rations and closely held corporations.

•

General business credit (see Form 3800 and the In-

structions for Form 3800).

•

Credit for prior year minimum tax, if applicable (see

Form 8827).

•

Bond credits (see Form 8912).

•

Refundable credits. See the instructions for the corpo-

ration's income tax return for a list of refundable cred-

its that may be allowed for the current tax year.

Recapture Taxes

A corporation's tax liability is increased if it recaptures

credits it has taken in prior years. The following list in-

cludes some credits a corporation may need to recapture.

•

Investment credit (see the Instructions for Form 4255).

•

Low-income housing credit (see the Instructions for

Form 8611).

•

New markets credit (see the Instructions for Form

8874).

•

Employer-provided childcare facilities and services

credit (see the Instructions for Form 8882).

•

Indian employment credit (see the Instructions for

Form 8845).

See the Instructions for Form 3800 for additional credits

that may be subject to recapture. Also see the instructions

for the corporation's tax return.

Accumulated Earnings Tax

A corporation can accumulate its earnings for a possible

expansion or other bona fide business reasons. However,

if a corporation allows earnings to accumulate beyond the

reasonable needs of the business, it may be subject to an

accumulated earnings tax of 20%. If the accumulated

earnings tax applies, interest applies to the tax from the

date the corporate return was originally due, without ex-

tensions.

To determine if the corporation is subject to this tax, first

treat an accumulation of $250,000 or less generally as

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within the reasonable needs of most businesses. Treat an

accumulation of $150,000 or less as within the reasonable

needs of a business whose principal function is perform-

ing services in the fields of accounting, actuarial science,

architecture, consulting, engineering, health (including

veterinary services), law, and the performing arts.

In determining if the corporation has accumulated earn-

ings and profits beyond its reasonable needs, value the

listed and readily marketable securities owned by the cor-

poration and purchased with its earnings and profits at net

liquidation value, not at cost.

Reasonable needs of the business include the follow-

ing.

•

Specific, definite, and feasible plans for use of the

earnings accumulation in the business.

•

The amount necessary to redeem the corporation's

stock included in a deceased shareholder's gross es-

tate, if the amount does not exceed the reasonably an-

ticipated total estate and inheritance taxes and funeral

and administration expenses incurred by the share-

holder's estate.

The absence of a bona fide business reason for a cor-

poration's accumulated earnings may be indicated by

many different circumstances, such as a lack of regular

distributions to its shareholders or withdrawals by the

shareholders classified as personal loans. However, ac-

tual moves to expand the business generally qualify as a

bona fide use of the accumulations.

The fact that a corporation has an unreasonable accu-

mulation of earnings is sufficient to establish liability for

the accumulated earnings tax unless the corporation can

show the earnings were not accumulated to allow its indi-

vidual shareholders to avoid income tax.

Distributions to Shareholders

This section discusses corporate distributions of money,

stock, or other property to a shareholder with respect to

the shareholder's ownership of stock. However, this sec-

tion does not discuss the special rules that apply to the

following distributions. See the applicable sections of the

Internal Revenue Code.

•

Distributions in redemption of stock (section 302).

•

Distributions in complete liquidation of the corporation

(sections 331 through 346).

•

Distributions in corporate organizations (section 351).

Also, see Property Exchanged for Stock, earlier.

•

Distributions in corporate reorganizations (sections

354 through 368).

•

Certain distributions to 20% corporate shareholders

(section 301(e)).

Money or Property Distributions

Most distributions are in money, but they may also be in

stock or other property. For this purpose, “property” gener-

ally does not include stock in the corporation or rights to

acquire this stock. However, see Distributions of Stock or

Stock Rights, later.

A corporation generally does not recognize a gain or

loss on the distributions covered by the rules in this sec-

tion. However, see Gain from property distributions, later.

Amount distributed. The amount of a distribution is gen-

erally the amount of any money paid to the shareholder

plus the fair market value (FMV) of any property transfer-

red to the shareholder. However, this amount is reduced

(but not below zero) by the following liabilities.

•

Any liability of the corporation the shareholder as-

sumes in connection with the distribution.

•

Any liability to which the property is subject immedi-

ately before, and immediately after, the distribution.

The FMV of any property distributed to a shareholder be-

comes the shareholder's basis in that property.

Gain from property distributions. A corporation will

recognize a gain on the distribution of property to a share-

holder if the FMV of the property is more than its adjusted

basis. This is generally the same treatment the corpora-

tion would receive if the property were sold. However, for

this purpose, the FMV of the property is the greater of the

following amounts.

•

The actual FMV.

•

The amount of any liabilities the shareholder assumed

in connection with the distribution of the property.

If the property was depreciable or amortizable, the cor-

poration may have to treat all or part of the gain as ordi-

nary income from depreciation recapture. For more infor-

mation on depreciation recapture and the sale of business

property, see Pub. 544.

Distributions of Stock or Stock Rights

Distributions by a corporation of its own stock are com-

monly known as “stock dividends.” Stock rights (also

known as “stock options”) are distributions by a corpora-

tion of rights to acquire its stock. Distributions of stock div-

idends and stock rights are generally tax free to share-

holders. However, if any of the following apply to their

distribution, stock and stock rights are treated as property,

as discussed under Money or Property Distributions, ear-

lier.

1. Any shareholder has the choice to receive cash or

other property instead of stock or stock rights.

2. The distribution gives cash or other property to some

shareholders and an increase in the percentage inter-

est in the corporation's assets or earnings and profits

to other shareholders.

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3. The distribution is in convertible preferred stock and

has the same result as in (2).

4. The distribution gives preferred stock to some com-

mon stock shareholders and gives common stock to

other common stock shareholders.

5. The distribution is on preferred stock. (An increase in

the conversion ratio of convertible preferred stock

made solely to take into account a stock dividend,

stock split, or similar event that would otherwise result

in reducing the conversion right is not a distribution on

preferred stock.)

The term “stock” includes rights to acquire stock and the

term “shareholder” includes a holder of rights or converti-

ble securities.

Constructive stock distributions. You must treat cer-

tain transactions that increase a shareholder's proportion-

ate interest in the earnings and profits or assets of a cor-

poration as if they were distributions of stock or stock

rights. These constructive distributions are treated as

property if they have the same result as a distribution de-

scribed in (2), (3), (4), or (5) above. Constructive distribu-

tions are described later.

This treatment applies to a change in your stock's con-

version ratio or redemption price, a difference between

your stock's redemption price and issue price, a redemp-

tion that is not treated as a sale or exchange of your stock,

and any other transaction having a similar effect on a

shareholder's interest in the corporation.

Expenses of issuing a stock dividend. You cannot de-

duct the expenses of issuing a stock dividend. These ex-

penses include printing, postage, cost of advice sheets,

fees paid to transfer agents, and fees for listing on stock

exchanges. The corporation must capitalize these costs.

Constructive Distributions

The following sections discuss transactions that may be

treated as distributions.

Below-market loans. If a corporation gives a share-

holder a loan on which no interest is charged or on which

interest is charged at a rate below the applicable federal

rate, the interest not charged may be treated as a distribu-

tion to the shareholder. For more information, see Be-

low-Market Loans, earlier.

Corporation cancels shareholder's debt. If a corpora-

tion cancels a shareholder's debt without repayment by

the shareholder, the amount canceled is treated as a dis-

tribution to the shareholder.

Transfers of property to shareholders for less than

FMV. A sale or exchange of property by a corporation to a

shareholder may be treated as a distribution to the share-

holder. For a shareholder who is not a corporation, if the

FMV of the property on the date of the sale or exchange

exceeds the price paid by the shareholder, the excess is

treated as a distribution to the shareholder.

Unreasonable rents. If a corporation rents property from

a shareholder and the rent is unreasonably more than the

shareholder would charge to a stranger for use of the

same property, the excessive part of the rent may be trea-

ted as a distribution to the shareholder.

Unreasonable salaries. If a corporation pays an em-

ployee who is also a shareholder a salary that is unrea-

sonably high considering the services actually performed

by the shareholder-employee, the excessive part of the

salary may be treated as a distribution to the share-

holder-employee.

Reporting Dividends and Other

Distributions

A corporate distribution to a shareholder is generally trea-

ted as a distribution of earnings and profits. Any part of a

distribution from either current or accumulated earnings

and profits is reported to the shareholder as a dividend.

Any part of a distribution that is not from earnings and

profits is applied against and reduces the adjusted basis

of the stock in the hands of the shareholder. To the extent

the balance is more than the adjusted basis of the stock,

the shareholder has a gain (usually a capital gain) from

the sale or exchange of property.

For information on shareholder reporting of corporate

distributions, see Pub. 550.

Form 1099-DIV. File Form 1099-DIV, Dividends and Dis-

tributions, with the IRS for each shareholder to whom the

corporation has paid dividends and other distributions on

stock of $10 or more during a calendar year. A corporation

must generally send Forms 1099-DIV to the IRS with Form

1096, Annual Summary and Transmittal of U.S. Informa-

tion Returns, by February 28 (March 31 if filing electroni-

cally) of the year following the year of the distribution. For

more information, see the General Instructions for Certain

Information Returns (Forms 1096, 1097, 1098, 1099,

3921, 3922, 5498, and W-2G).

Generally, the corporation must furnish Forms

1099-DIV to shareholders by January 31 of the year fol-

lowing the close of the calendar year during which it made

the distributions. However, the corporation may furnish the

Form 1099-DIV to shareholders after November 30 of the

year of the distributions if it has made its final distributions

for the year. The corporation may furnish the Form

1099-DIV to shareholders anytime after April 30 of the

year of the distributions if it gives the Form 1099-DIV with

the final distributions for the calendar year.

If any regular due date falls on a Saturday, Sunday, or

legal holiday, file by the next business day. A business day

is any day that is not a Saturday, Sunday, or legal holiday.

Backup withholding. Dividends may be subject to

backup withholding. For more information on backup with-

holding, see the General Instructions for Certain Informa-

tion Returns.

Form 5452. File Form 5452, Corporate Report of Nondi-

vidend Distributions, if nondividend distributions were

made to shareholders.

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A calendar tax year corporation must file Form 5452

with its income tax return for the tax year in which the non-

dividend distributions were made. A fiscal tax year corpo-

ration must file Form 5452 with its income tax return due

for the first fiscal year ending after the calendar year in

which the nondividend distributions were made.

Current year earnings and profits. If a corporation's

earnings and profits for the year (figured as of the close of

the year without reduction for any distributions made dur-

ing the year) are more than the total amount of distribu-

tions made during the year, all distributions made during

the year are treated as distributions of current year earn-

ings and profits. If the total amount of distributions is more

than the earnings and profits for the year, see Accumula-

ted earnings and profits, later.

Example. You are the only shareholder of a corpora-

tion that uses the calendar year as its tax year. In January,

you use the worksheet in the Form 5452 instructions to fig-

ure your corporation's current year earnings and profits for

the previous year. During the year, the corporation made

four $1,000 distributions to you. At the end of the year (be-

fore subtracting distributions made during the year), the

corporation had $10,000 of current year earnings and

profits.

Since the corporation's current year earnings and prof-

its ($10,000) were more than the amount of the distribu-

tions it made during the year ($4,000), all of the distribu-

tions are treated as distributions of current year earnings

and profits.

The corporation must issue a Form 1099-DIV to you to

report the $4,000 distributed to you during the previous

year as dividends. The corporation must use Form 1096 to

report this information to the IRS. The corporation does

not deduct these dividends on its income tax return.

Accumulated earnings and profits. If a corporation's

current year earnings and profits (figured as of the close of

the year without reduction for any distributions made dur-

ing the year) are less than the total distributions made dur-

ing the year, part or all of each distribution is treated as a

distribution of accumulated earnings and profits. Accumu-

lated earnings and profits are earnings and profits the cor-

poration accumulated before the current year.

If the total amount of distributions is less than current

year earnings and profits, see Current year earnings and

profits above.

Used with current year earnings and profits. If the

corporation has current year earnings and profits, figure

the use of accumulated and current earnings and profits

as follows.

1. Divide the current year earnings and profits by the to-

tal distributions made during the year.

2. Multiply each distribution by the percentage figured in

(1) to get the amount treated as a distribution of cur-

rent year earnings and profits.

3. Start with the first distribution and treat the part of

each distribution greater than the allocated current

year earnings and profits figured in (2) as a distribu-

tion of accumulated earnings and profits.

4. If accumulated earnings and profits are reduced to

zero, the remaining part of each distribution is applied

against and reduces the adjusted basis of the stock in

the hands of the shareholders. To the extent that the

balance is more than the adjusted basis of the stock,

it is treated as a gain from the sale or exchange of

property.

Example. You are the only shareholder of a corpora-

tion that uses the calendar year as its tax year. In January,

you use the worksheet in the Form 5452 instructions to fig-

ure your corporation's current year earnings and profits for

the previous year. At the beginning of the year, the corpo-

ration's accumulated earnings and profits balance was

$20,000. During the year, the corporation made four

$4,000 distributions to you ($4,000 × 4 = $16,000). At the

end of the year (before subtracting distributions made dur-

ing the year), the corporation had $10,000 of current year

earnings and profits.

Since the corporation's current year earnings and prof-

its ($10,000) were less than the distributions it made dur-

ing the year ($16,000), part of each distribution is treated

as a distribution of accumulated earnings and profits.

Treat the distributions as follows.

1. Divide the current year earnings and profits ($10,000)

by the total amount of distributions made during the

year ($16,000). The result is 0.625.

2. Multiply each $4,000 distribution by the 0.625 figured

in (1) to get the amount ($2,500) of each distribution

treated as a distribution of current year earnings and

profits.

3. The remaining $1,500 of each distribution is treated

as a distribution from accumulated earnings and prof-

its. The corporation distributed $6,000 ($1,500 × 4) of

accumulated earnings and profits.

The remaining $14,000 ($20,000 − $6,000) of accumula-

ted earnings and profits is available for use in the following

year.

The corporation must issue a Form 1099-DIV to you to

report the $16,000 distributed to you during the previous

year as dividends. The corporation must use Form 1096 to

report this information to the IRS. The corporation does

not deduct these dividends on its income tax return.

Used without current year earnings and profits. If

the corporation has no current year earnings and profits,

figure the use of accumulated earnings and profits as fol-

lows.

1. If the current year earnings and profits balance is neg-

ative, prorate the negative balance to the date of each

distribution made during the year.

2. Figure the available accumulated earnings and profits

balance on the date of each distribution by subtract-

ing the prorated amount of current year earnings and

profits from the accumulated balance.

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3. Treat each distribution as a distribution of these adjus-

ted accumulated earnings and profits.

4. If adjusted accumulated earnings and profits are re-

duced to zero, the remaining distributions are applied

against and reduce the adjusted basis of the stock in

the hands of the shareholders. To the extent that the

balance is more than the adjusted basis of the stock,

it is treated as a gain from the sale or exchange of

property.

Example. You are the only shareholder of a corpora-

tion that uses the calendar year as its tax year. In January,

you use the worksheet in the Form 5452 instructions to fig-

ure your corporation's current year earnings and profits for

the previous year. At the beginning of the year, the corpo-

ration's accumulated earnings and profits balance was

$20,000. During the year, the corporation made four

$4,000 distributions to you on March 31, June 30, Sep-

tember 30, and December 31. At the end of the year (be-

fore subtracting distributions made during the year), the

corporation had a negative $10,000 current year earnings

and profits balance.

Since the corporation had no current year earnings and

profits, all of the distributions are treated as distributions of

accumulated earnings and profits. Treat the distributions

as follows.

1. Prorate the negative current year earnings and profits

balance to the date of each distribution made during

the year. The negative $10,000 can be spread evenly

by prorating a negative $2,500 to each distribution.

2. The following table shows how to figure the available

accumulated earnings and profits balance on the date

of each distribution.

March 31 Distribution

Accumulated earnings and profits .............. $20,000

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ $17,500

Amount of distribution treated as a dividend ....... ($4,000)

June 30 Distribution

Accumulated earnings and profits .............. $13,500

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ $11,000

Amount of distribution treated as a dividend ....... ($4,000)

September 30 Distribution

Accumulated earnings and profits .............. $7,000

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ $4,500

Amount of distribution treated as a dividend ....... ($4,000)

December 31 Distribution

Accumulated earnings and profits .............. $500

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ ($2,000)

Amount of distribution treated as a dividend ....... $0

Nondividend amount (reduction of stock basis or gain

from sale/exchange of property) ............... $4,000

Year-end accumulated earnings and profits ........ ($2,000)

The corporation must issue a Form 1099-DIV to you to

report $12,000 of the $16,000 distributed to you during the

previous year as dividends. The corporation must use

Form 1096 to report this information to the IRS. The cor-

poration does not deduct these dividends on its income

tax return. However, the corporation must attach Form

5452 to this return to report the nondividend distribution.

For more information about figuring earnings and

profits, see the Worksheet for Figuring Current

Year Earnings and Profits in the Form 5452 in-

structions.

How To Get Tax Help

If you have questions about a tax issue; need help prepar-

ing your tax return; or want to download free publications,

forms, or instructions, go to IRS.gov to find resources that

can help you right away.

Using online tools to help prepare your return. Go to

IRS.gov/Tools for the following.

•

The Online EIN Application (IRS.gov/EIN) helps you

get an employer identification number (EIN) at no

cost.

•

The Tax Calendar (TAX.gov/calendar) helps you track

important business tax dates and deadlines right from

your desktop.

•

The FATCA FFI List Search and Download Tool

(IRS.gov/fatca-ffilist) makes it easier to find out if a

Foreign Financial Institution has registered with

FATCA.

•

The Electronic Federal Tax Payment System (IRS.gov/

EFTPS) is a free tax payment system that allows you

to pay your federal taxes online or by phone with

EFTPS.

Getting answers to your tax questions. On

IRS.gov, you can get up-to-date information on

current events and changes in tax law.

•

IRS.gov/Help: A variety of tools to help you get an-

swers to some of the most common tax questions.

•

IRS.gov/ITA: The Interactive Tax Assistant, a tool that

will ask you questions and, based on your input, pro-

vide answers on a number of tax law topics.

•

IRS.gov/Forms: Find forms, instructions, and publica-

tions. You will find details on the most recent tax

changes and hundreds of interactive links to help you

find answers to your questions.

•

You may also be able to access tax information in your

e-filing software.

Need someone to prepare your tax return? There are

various types of tax return preparers, including tax prepar-

ers, enrolled agents, certified public accountants (CPAs),

attorneys, and many others who don’t have professional

credentials. If you choose to have someone prepare your

TIP

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tax return, choose that preparer wisely. A paid tax pre-

parer is:

•

Primarily responsible for the overall substantive accu-

racy of your return,

•

Required to sign the return, and

•

Required to include their preparer tax identification

number (PTIN).

Although the tax preparer always signs the return,

you're ultimately responsible for providing all the

information required for the preparer to accurately

prepare your return. Anyone paid to prepare tax returns for

others should have a thorough understanding of tax mat-

ters. For more information on how to choose a tax pre-

parer, go to Tips for Choosing a Tax Preparer on IRS.gov.

Employers can register to use Business Services On-

line. The Social Security Administration (SSA) offers on-

line service at SSA.gov/employer for fast, free, and secure

online W-2 filing options to CPAs, accountants, enrolled

agents, and individuals who process Form W-2, Wage

and Tax Statement, and Form W-2c, Corrected Wage and

Tax Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the

various social media tools the IRS uses to share the latest

information on tax changes, scam alerts, initiatives, prod-

ucts, and services. At the IRS, privacy and security are our

highest priority. We use these tools to share public infor-

mation with you. Don’t post your taxpayer identification

number (TIN) or other confidential information on social

media sites. Always protect your identity when using any

social networking site.

The following IRS YouTube channels provide short, in-

formative videos on various tax-related topics in English,

Spanish, and ASL.

•

Youtube.com/irsvideos.

•

Youtube.com/irsvideosmultilingua.

•

Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal

(IRSVideos.gov) contains video and audio presentations

for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can

find information on IRS.gov/MyLanguage if English isn’t

your native language.

Free Over-the-Phone Interpreter (OPI) Service. The

IRS is committed to serving taxpayers with limited-English

proficiency (LEP) by offering OPI services. The OPI Serv-

ice is a federally funded program and is available at Tax-

payer Assistance Centers (TACs), most IRS offices, and

every VITA/TCE return site. OPI Service is accessible in

more than 350 languages.

Accessibility Helpline available for taxpayers with

disabilities. Taxpayers who need information about ac-

cessibility services can call 833-690-0598. The Accessi-

bility Helpline can answer questions related to current and

CAUTION

future accessibility products and services available in al-

ternative media formats (for example, braille, large print,

audio, etc.). The Accessibility Helpline does not have ac-

cess to your IRS account. For help with tax law, refunds, or

account-related issues, go to IRS.gov/LetUsHelp.

Note. Form 9000, Alternative Media Preference, or

Form 9000(SP) allows you to elect to receive certain types

of written correspondence in the following formats.

•

Standard Print.

•

Large Print.

•

Braille.

•

Audio (MP3).

•

Plain Text File (TXT).

•

Braille Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the

available disaster tax relief.

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all of the forms, instruc-

tions, and publications you may need. Or, you can go to

IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook

format. You can also download and view popular tax

publications and instructions on mobile devices as

eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple's iBooks for

iPad. Our eBooks haven’t been tested on other dedicated

eBook readers, and eBook functionality may not operate

as intended.

Reporting and resolving your tax-related identity

theft issues.

•

Tax-related identity theft happens when someone

steals your personal information to commit tax fraud.

Your taxes can be affected if your TIN is used to file a

fraudulent return or to claim a refund or credit.

•

The IRS doesn’t initiate contact with taxpayers by

email, text messages, telephone calls, or social media

channels to request personal or financial information.

This includes requests for personal identification num-

bers (PINs), passwords, or similar information for

credit cards, banks, or other financial accounts.

•

Go to IRS.gov/IdentityTheft, the IRS Identity Theft

Central webpage, for information on identity theft and

data security protection for taxpayers, tax professio-

nals, and businesses. If your TIN has been lost or sto-

len or you suspect you’re a victim of tax-related iden-

tity theft, you can learn what steps you should take.

Making a tax payment. Payments of U.S. tax must be

remitted to the IRS in U.S. dollars. Digital assets are not

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accepted. Go to IRS.gov/Payments for information on how

to make a payment using any of the following options.

•

IRS Direct Pay: Pay your tax bill or estimated tax pay-

ment directly from your checking or savings account at

no cost to you.

•

Debit or Credit Card, or Digital Wallet: Choose an ap-

proved payment processor to pay online or by phone.

•

Electronic Funds Withdrawal: Schedule a payment

when filing your federal taxes using tax return prepara-

tion software or through a tax professional.

•

Electronic Federal Tax Payment System: Best option

for businesses. Enrollment is required.

•

Check or Money Order: Mail your payment to the ad-

dress listed on the notice or instructions.

•

Cash: You may be able to pay your taxes with cash at

a participating retail store.

•

Same-Day Wire: You may be able to do same-day

wire from your financial institution. Contact your finan-

cial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to

ensure that the electronic payments you make online, by

phone, or from a mobile device using the IRS2Go app are

safe and secure. Paying electronically is quick, easy, and

faster than mailing in a check or money order.

What if I can’t pay now? Go to IRS.gov/Payments for

more information about your options.

•

Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly install-

ments if you can’t pay your taxes in full today. Once

you complete the online process, you will receive im-

mediate notification of whether your agreement has

been approved.

•

Use the Offer in Compromise Pre-Qualifier to see if

you can settle your tax debt for less than the full

amount you owe. For more information on the Offer in

Compromise program, go to IRS.gov/OIC.

Understanding an IRS notice or letter you’ve re-

ceived. Go to IRS.gov/Notices to find additional informa-

tion about responding to an IRS notice or letter.

Contacting your local IRS office. Keep in mind, many

questions can be answered on IRS.gov without visiting an

IRS TAC. Go to IRS.gov/LetUsHelp for the topics people

ask about most. If you still need help, IRS TACs provide

tax help when a tax issue can’t be handled online or by

phone. All TACs now provide service by appointment, so

you’ll know in advance that you can get the service you

need without long wait times. Before you visit, go to

IRS.gov/TACLocator to find the nearest TAC and to check

hours, available services, and appointment options. Or, on

the IRS2Go app, under the Stay Connected tab, choose

the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS)

Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that

helps taxpayers and protects taxpayer rights. Their job is

to ensure that every taxpayer is treated fairly and that you

know and understand your rights under the Taxpayer Bill

of Rights.

How Can You Learn About Your Taxpayer

Rights?

The Taxpayer Bill of Rights describes 10 basic rights that

all taxpayers have when dealing with the IRS. Go to

TaxpayerAdvocate.IRS.gov to help you understand what

these rights mean to you and how they apply. These are

your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve

with the IRS. And their service is free. If you qualify for

their assistance, you will be assigned to one advocate

who will work with you throughout the process and will do

everything possible to resolve your issue. TAS can help

you if:

•

Your problem is causing financial difficulty for you,

your family, or your business;

•

You face (or your business is facing) an immediate

threat of adverse action; or

•

You’ve tried repeatedly to contact the IRS but no one

has responded, or the IRS hasn’t responded by the

date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia,

and Puerto Rico. To find your advocate's number:

•

Go to TaxpayerAdvocate.IRS.gov/Contact-Us;

•

Download Pub. 1546, The Taxpayer Advocate Service

Is Your Voice at the IRS, available at IRS.gov/pub/irs-

pdf/p1546.pdf;

•

Call the IRS toll free at 800-TAX-FORM

(800-829-3676) to order a copy of Pub. 1546;

•

Check your local directory; or

•

Call TAS toll free at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect

many taxpayers. If you know of one of these broad issues,

report it to them at IRS.gov/SAMS.

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Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent indi-

viduals whose income is below a certain level and need to

resolve tax problems with the IRS, such as audits, ap-

peals, and tax collection disputes. In addition, LITCs can

provide information about taxpayer rights and responsibili-

ties in different languages for individuals who speak Eng-

lish as a second language. Services are offered for free or

a small fee for eligible taxpayers. To find an LITC near you,

go to TaxpayerAdvocate.IRS.gov/about-us/Low-Income-

Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low Income

Taxpayer Clinic List.

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Other Useful Forms for Corporations

Other Useful Forms

Form Use this form to—

W-2 and W-3—Wage and Tax Statement; and

Transmittal of Wage and Tax Statements

Report wages, tips, and other compensation, and withheld income, social

security, and Medicare taxes for employees.

W-2G—Certain Gambling Winnings Report gambling winnings from horse racing, dog racing, jai alai, lotteries,

keno, bingo, slot machines, sweepstakes, wagering pools, etc.

926—Return by a U.S. Transferor of Property to a

Foreign Corporation

Report certain transfers to foreign corporations under section 6038B.

940—Employer's Annual Federal Unemployment

(FUTA) Tax Return

Report and pay FUTA tax if the corporation either:

1. Paid wages of $1,500 or more in any calendar quarter during the

calendar year (or the preceding calendar year), or

2. Had one or more employees working for the corporation for at least

some part of a day in any 20 different weeks during the calendar year (or

the preceding calendar year).

941—Employer's QUARTERLY Federal Tax Return Report quarterly income tax withheld on wages and employer and employee

social security and Medicare taxes.

943—Employer's Annual Federal Tax Return for

Agricultural Employees

Report income tax withheld and employer and employee social security and

Medicare tax on farmworkers.

944—Employer's ANNUAL Federal Tax Return File annual Form 944 instead of filing quarterly Forms 941, if the IRS notified

you in writing.

945—Annual Return of Withheld Federal Income Tax Report income tax withheld from nonpayroll payments, including pensions,

annuities, individual retirement arrangements (IRAs), gambling winnings, and

backup withholding.

952—Consent To Extend the Time To Assess Tax

Under Section 332(b)

Extend the period of assessment of all income taxes of the receiving

corporation on the complete liquidation of a subsidiary under section 332.

965-B—Corporate and Real Estate Investment Trust

(REIT) Report of Net 965 Tax Liability and Electing

REIT Report of 965 Amounts

This form must be completed by a taxpayer for every tax year for which the

taxpayer has any net 965 tax liability outstanding and not fully paid at any

point during the tax year. See the Instructions for Form 965-B.

966—Corporate Dissolution or Liquidation Report the adoption of a resolution or plan to dissolve the corporation or

liquidate any of its stock.

1042 and 1042-S—Annual Withholding Tax Return

for U.S. Source Income of Foreign Persons; and

Foreign Person's U.S. Source Income Subject to

Withholding

Report withheld tax on payments or distributions made to nonresident alien

individuals, foreign partnerships, or foreign corporations to the extent these

payments or distributions constitute gross income from sources within the

United States that is not effectively connected with a U.S. trade or business.

In addition, a publicly traded partnership is required to withhold on

distributions of effectively connected income to its foreign partners. See Pub.

515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

1042-T—Annual Summary and Transmittal of Forms

1042-S

Transmit paper Forms 1042-S to the IRS.

1096—Annual Summary and Transmittal of U.S.

Information Returns

Transmit paper Forms 1098, 1099, 5498, and W-2G to the IRS.

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Other Useful Forms

Form Use this form to—

1097-BTC, 1098, 1098-C, 1098-E, 1098-F, 1098-T,

1099-A, B, C, CAP, G, H, DIV, INT, K, LTC, MISC,

NEC, OID, PATR, Q, R, S, SA, 3921, and 3922.

Important: Every corporation must file Forms

1099-MISC (or 1099-NEC for nonemployee

compensation) if, in the course of its trade or

business, it makes payments of rents, services,

commissions, or other fixed or determinable income

(see section 6041) totaling $600 or more to any one

person during the calendar year.

Also use these returns to report amounts received

as a nominee for another person. For more details,

see the General Instructions for Certain Information

Returns (1097, 1098, 1099, 3921, 3922, 5498, and

W-2G).

Report the following:

•

Tax credits to bond holders;

•

Mortgage interest;

•

Contributions of certain motor vehicles, boats, and airplanes;

•

Student loan interest;

•

Fines, penalties, and other amounts;

•

Certain tuition payments;

•

Acquisitions or abandonments of secured property;

•

Proceeds from broker and barter exchange transactions;

•

Cancellation of debts;

•

Changes in corporate control and capital structure;

•

Certain government payments;

•

Advance payments of health coverage insurance premiums;

•

Dividends and distributions;

•

Interest payments;

•

Merchant card and third-party network payments;

•

Payments of long-term care and accelerated death benefits;

•

Miscellaneous income payments to certain fishing boat crew members,

to providers of health and medical services, of rent or royalties, of

nonemployee compensation, etc.;

•

Original issue discount;

•

Distributions received from cooperatives;

•

Distributions from certain qualified education programs;

•

Distributions from pensions, annuities, retirement or profit-sharing plans,

IRAs, insurance contracts, etc.;

•

Proceeds from real estate transactions;

•

Distributions from an HSA, Archer MSA, or Medicare Advantage MSA;

•

Exercise of incentive stock options; and

•

Transfer of stock acquired through employee stock purchase plans.

1122—Authorization and Consent of Subsidiary

Corporation To Be Included in a Consolidated

Income Tax Return

Include a subsidiary in a consolidated return. Attach this form to the parent's

consolidated return. Attach a separate Form 1122 for each subsidiary being

included in the consolidated return.

1138—Extension of Time for Payment of Taxes by a

Corporation Expecting a Net Loss Carryback

Request an extension of time for payment of tax for the immediately

preceding tax year if the corporation expects a net operating loss for the

current year.

3520—Annual Return To Report Transactions With

Foreign Trusts and Receipt of Certain Foreign Gifts

Report ownership of and certain transactions with foreign trusts, including

receipt of certain large gifts. See Schedule N (Form 1120), Question 5.

3520-A—Annual Information Return of Foreign Trust

With a U.S. Owner

Report information about the foreign trust, its U.S. beneficiaries, and any U.S.

person who is treated as an owner of any portion of the foreign trust.

5471—Information Return of U.S. Persons With

Respect to Certain Foreign Corporations

Satisfy the reporting requirements of sections 6038 and 6046, and the related

regulations, as well as report amounts related to section 965. Form 5471 and

the related schedules are used by certain U.S. persons who are officers,

directors, or shareholders in certain foreign corporations. See the Instructions

for Form 5471.

5498—IRA Contribution Information Report contributions (including rollover contributions) to any IRA, including a

SEP, SIMPLE, or Roth IRA, and to report Roth IRA conversions, IRA

recharacterizations, and the fair market value (FMV) of the account.

5498-ESA—Coverdell ESA Contribution Information Report contributions (including rollover contributions) to a Coverdell

education savings account (ESA).

5498-SA—HSA, Archer MSA, or Medicare

Advantage MSA Information

Report contributions and rollovers to an HSA or Archer MSA and the FMV of

an HSA, Archer MSA, or Medicare Advantage MSA. For more information,

see the general and specific instructions for Forms 1098, 1099, 5498, and

W-2G.

5713—International Boycott Report Report operations in, or related to, a “boycotting” country, government,

company, or national of a country and to figure the loss of certain tax benefits.

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Other Useful Forms

Form Use this form to—

8023—Elections Under Section 338 for

Corporations Making Qualified Stock Purchases

Make elections under section 338 for a “target” corporation if the purchasing

corporation has made a qualified stock purchase of the target corporation.

8027—Employer's Annual Information Return of Tip

Income and Allocated Tips

Report receipts from large food or beverage operations, tips reported by

employees, and allocated tips.

8275—Disclosure Statement Disclose items or positions, except those contrary to a regulation, that are not

otherwise adequately disclosed on a tax return. The disclosure is made to

avoid the parts of the accuracy-related penalty imposed for disregard of rules

or substantial understatement of tax. Also use Form 8275 for disclosures

relating to preparer penalties for understatements due to unrealistic positions

or disregard of rules.

8275-R—Regulation Disclosure Statement Disclose any item on a tax return for which a position has been taken that is

contrary to Treasury regulations.

8281—Information Return for Publicly Offered

Original Issue Discount Instruments

Report the issuance of public offerings of debt instruments (obligations).

8300—Report of Cash Payments Over $10,000

Received in a Trade or Business

Report the receipt, in the course of a trade or business, of more than $10,000

in cash or foreign currency in one transaction or a series of related

transactions.

8594—Asset Acquisition Statement Under Section

1060

Report a sale of assets that make up a trade or business if goodwill or going

concern value attaches, or could attach, to such assets and if the buyer's

basis is determined only by the amount paid for the assets. Both the seller

and buyer must use this form.

8806—Information Return for Acquisition of Control

or Substantial Change in Capital Structure

Report an acquisition of control or a substantial change in the capital

structure of a domestic corporation.

8842—Election To Use Different Annualization

Periods for Corporate Estimated Tax

Elect one of the annualization periods in section 6655(e)(2) for figuring

estimated tax payments under the annualized income installment method.

8849—Claim for Refund of Excise Taxes Claim a refund of certain excise taxes.

8858—Information Return of U.S. Persons With

Respect to Foreign Disregarded Entities (FDEs) and

Foreign Branches (FBs)

Satisfy reporting requirements that apply if the corporation directly or

indirectly owns a foreign disregarded entity or a foreign branch. A separate

Form 8858 is required for each foreign branch or foreign disregarded entity.

See the Instructions for Form 8858.

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Other Useful Forms

Form Use this form to—

8865—Return of U.S. Person With Respect to

Certain Foreign Partnerships

Report an interest in a foreign partnership. A domestic corporation may have

to file Form 8865 if it:

1. Controlled a foreign partnership (owned more than a 50% direct or

indirect interest in the partnership).

2. Owned at least a 10% direct or indirect interest in a foreign partnership

while U.S. persons controlled that partnership.

3. Had an acquisition, disposition, or change in proportional interest of a

foreign partnership that:

a. Increased its direct interest to at least 10% or reduced its direct

interest of at least 10% to less than 10%, or

b. Changed its direct interest by at least a 10% interest.

4. Contributed property to a foreign partnership in exchange for a

partnership interest if:

a. Immediately after the contribution, the corporation directly or

indirectly owned at least a 10% interest in the foreign partnership, or

b. The FMV of the property the corporation contributed to the foreign

partnership in exchange for a partnership interest exceeds $100,000

when added to other contributions of property made to the foreign

partnership during the preceding 12-month period.

The domestic corporation may also have to file Form 8865 to report certain

dispositions by a foreign partnership of property it previously contributed to

that partnership if it was a partner at the time of the disposition. For more

details, including penalties for failing to file Form 8865, see the Instructions

for Form 8865.

8873—Extraterritorial Income Exclusion Figure the amount of extraterritorial income excluded from gross income for

the tax year (generally repealed for post-2004 income). See the Instructions

for Form 8873.

8876—Excise Tax on Structured Settlement

Factoring Transactions

Report and pay the 40% excise tax imposed under section 5891.

8883—Asset Allocation Statement Under Section

338

Report information about transactions involving the deemed sale of corporate

assets under section 338.

8886—Reportable Transaction Disclosure Statement Disclose information for each reportable transaction in which the corporation

participated. Attach Form 8886 to the corporation's income tax return for each

tax year in which it participated in a reportable transaction. The corporation

may have to pay a penalty if it is required to file Form 8886 and does not do

so. Other penalties may also apply. For more details, see the Instructions for

Form 8886.

8918—Material Advisor Disclosure Statement Disclose certain information about a reportable transaction to the IRS.

Material advisors who file Form 8918 will receive a reportable transaction

number from the IRS. This number must be provided to all taxpayers and

material advisors for whom the material advisor acts as a material advisor.

Other reporting requirements apply. See the Instructions for Form 8918.

8990—Limitation on Business Interest Expense

Under Section 163(j)

Figure the amount of business interest expense the corporation can deduct

and the amount to carry forward to the next year. See the Instructions for

Form 8990.

8991—Tax on Base Erosion Payments of Taxpayers

With Substantial Gross Receipts

Determine an applicable taxpayer's base erosion minimum tax amount for the

year. See the Instructions for Form 8991.

8992—U.S. Shareholder Calculation of Global

Intangible Low-Taxed Income (GILTI)

Figure a U.S. shareholder's GILTI inclusion for years in which they are U.S.

shareholders of controlled foreign corporations (CFCs). See the Instructions

for Form 8992.

8993—Section 250 Deduction for Foreign-Derived

Intangible Income (FDII) and Global Intangible

Low-Taxed Income (GILTI)

Figure the amount of the eligible deduction for FDII and GILTI under section

250.

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To help us develop a more useful index, please let us know if you have ideas for index entries.

See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

Index

Accounting methods 8

Accrual method 8

Change in accounting method:

Section 481(a) adjustment 8

Mark-to-market accounting

method 8

Percentage of completion method 8

Accounting periods 8

Accumulated earnings tax 15

Assistance (See Tax help)

At-risk limits 14

Backup withholding 17

Base erosion minimum tax 15

Below-market loans 11

Capital contributions 4

Capital losses 13

Charitable contributions 12

Closely held corporation 3

At-risk limits 14

Corporate Alternative Minimum

Tax 15

Corporate preference items 10

Corporations, businesses taxed

as 2

Credits:

Foreign tax 15

General business credit 15

Prior year minimum tax 15

Distributions:

Money or property 16

Other 17

Reporting 17

Stock or stock rights 16

To shareholders 16

Dividends-received deduction 10

EFTPS, Electronic Federal Tax

Payment System 5

Electronic filing 5

Estimated tax 6

Extraordinary dividends 11

Figuring:

Tax 15

Foreign tax credit 15

Form 6

1096 17

1099-DIV 17

1118 15

1120 5

1120X 14

1139 14

2220 7

3800 15

4255 15

4626 15

5452 17

7004 5

8611 15

8827 15

8832 3

8834 15

8845 15

8874 15

8882 15

8912 15

Going into business 9

Income tax returns 5

Loans, below-market 11

Net operating losses 14

Nontaxable exchange of property

for stock 3

Other useful forms 23

Paid-in capital 4

Passive activity limits 15

Paying estimated tax 7

Penalties:

Estimated tax 7

Late filing of return 5

Late payment of tax 6

Other 6

Trust fund recovery 6

Personal service corporation 3

Preference items 10

Publications (See Tax help)

Recapture taxes:

Childcare facilities and services

credit 15

Indian employment credit 15

Investment credit 15

Low-income housing credit 15

New markets credit 15

Qualified electric vehicle credit 15

Recordkeeping 9

Related persons 9

Retained earnings 15

Small business taxpayer 8

Start-up costs 9

Tax help 19

Tax rates 15

Tax, figuring 15

Publication 542 (1-2024) 27