Solution
Sandeep answered on
Mar 29 2022
2021 Form 1120
Form 1120
Department of the Treasury
Internal Revenue Service
U.S. Corporation Income Tax Return
For calendar year 2021 or tax year beginning , 2021, ending , 20
▶ Go to www.irs.gov/Form1120 for instructions and the latest information.
OMB No. 1545-0123
2021
TYPE
OR
PRINT
Name
Number, street, and room or suite no. If a P.O. box, see instructions.
City or town, state or province, country, and ZIP or foreign postal code
A Check if:
1a Consolidated return
(attach Form 851) .
b Life/nonlife consoli-
dated return . . .
2 Personal holding co.
(attach Sch. PH) . .
3 Personal service corp.
(see instructions) . .
4 Schedule M-3 attached
B Employer identification numbe
C Date incorporated
D Total assets (see instructions)
$
E Check if: (1) Initial return (2) Final return (3) Name change (4) Address change
In
co
m
e
1a Gross receipts or sales . . . . . . . . . . . . . . . . . . 1a
Returns and allowances . . . . . . . . . . . . . . . . . . 1
c Balance. Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . . . . . 1c
2 Cost of goods sold (attach Form 1125-A) . . . . . . . . . . . . . . . . . . . . . 2
3 Gross profit. Subtract line 2 from line 1c . . . . . . . . . . . . . . . . . . . . . 3
4 Dividends and inclusions (Schedule C, line 23) . . . . . . . . . . . . . . . . . . . 4
5 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6 Gross rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7 Gross royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 Capital gain net income (attach Schedule D (Form 1120)) . . . . . . . . . . . . . . . . 8
9 Net gain or (loss) from Form 4797, Part II, line 17 (attach Form 4797) . . . . . . . . . . . . 9
10 Other income (see instructions—attach statement) . . . . . . . . . . . . . . . . . . 10
11 Total income. Add lines 3 through 10 . . . . . . . . . . . . . . . . . . . . ▶ 11
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.) 12 Compensation of officers (see instructions—attach Form 1125-E) . . . . . . . . . . . . ▶ 12
13 Salaries and wages (less employment credits) . . . . . . . . . . . . . . . . . . . 13
14 Repairs and maintenance . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 Taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18 Interest (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 18
19 Charitable contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 19
20 Depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on return (attach Form 4562) . . . 20
21 Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
22 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23 Pension, profit-sharing, etc., plans . . . . . . . . . . . . . . . . . . . . . . 23
24 Employee benefit programs . . . . . . . . . . . . . . . . . . . . . . . . 24
25 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . 25
26 Other deductions (attach statement) . . . . . . . . . . . . . . . . . . . . . . 26
27 Total deductions. Add lines 12 through 26 . . . . . . . . . . . . . . . . . . . ▶ 27
28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11. . 28
29a Net operating loss deduction (see instructions) . . . . . . . . . . . 29a
Special deductions (Schedule C, line 24) . . . . . . . . . . . . . 29
c Add lines 29a and 29b . . . . . . . . . . . . . . . . . . . . . . . . . . 29c
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30 Taxable income. Subtract line 29c from line 28. See instructions . . . . . . . . . . . . . 30
31 Total tax (Schedule J, Part I, line 11) . . . . . . . . . . . . . . . . . . . . . . 31
32 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . 32
33 Total payments and credits (Schedule J, Part III, line 23) . . . . . . . . . . . . . . . . 33
34 Estimated tax penalty. See instructions. Check if Form 2220 is attached . . . . . . . . . ▶ 34
35 Amount owed. If line 33 is smaller than the total of lines 31 and 34, enter amount owed . . . . . . 35
36 Overpayment. If line 33 is larger than the total of lines 31 and 34, enter amount overpaid . . . . . . 36
37 Enter amount from line 36 you want: Credited to 2022 estimated tax ▶ Refunded ▶ 37
Sign
Here
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, co
ect,
and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
▲
Signature of officer Date
▲
Title
May the IRS discuss this return
with the preparer shown below?
See instructions. Yes No
Paid
Preparer
Use Only
Print/Type preparer’s name Preparer’s signature Date
Check if
self-employed
PTIN
Firm’s name ▶
Firm’s address ▶
Firm’s EIN ▶
Phone no.
For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11450Q Form 1120 (2021)
Form 1120 (2021) Page 2
Schedule C Dividends, Inclusions, and Special Deductions (see
instructions)
(a) Dividends and
inclusions
(b) % (c) Special deductions (a) × (b)
1 Dividends from less-than-20%-owned domestic corporations (other than debt-financed
stock) . . . . . . . . . . . . . . . . . . . . . . . . 50
2 Dividends from 20%-or-more-owned domestic corporations (other than debt-financed
stock) . . . . . . . . . . . . . . . . . . . . . . . . 65
3 Dividends on certain debt-financed stock of domestic and foreign corporations . .
See
instructions
4 Dividends on certain prefe
ed stock of less-than-20%-owned public utilities . . . 23.3
5 Dividends on certain prefe
ed stock of 20%-or-more-owned public utilities . . . . 26.7
6 Dividends from less-than-20%-owned foreign corporations and certain FSCs . . . 50
7 Dividends from 20%-or-more-owned foreign corporations and certain FSCs . . . 65
8 Dividends from wholly owned foreign subsidiaries . . . . . . . . . . . 100
9 Subtotal. Add lines 1 through 8. See instructions for limitations . . . . . . .
See
instructions
10 Dividends from domestic corporations received by a small business investment
company operating under the Small Business Investment Act of 1958 . . . . . 100
11 Dividends from affiliated group members . . . . . . . . . . . . . . 100
12 Dividends from certain FSCs . . . . . . . . . . . . . . . . . 100
13 Foreign-source portion of dividends received from a specified 10%-owned foreign
corporation (excluding hy
id dividends) (see instructions) . . . . . . . . . 100
14 Dividends from foreign corporations not included on line 3, 6, 7, 8, 11, 12, or 13
(including any hy
id dividends) . . . . . . . . . . . . . . . . .
15 Reserved for future use . . . . . . . . . . . . . . . . . . .
16a
Subpart F inclusions derived from the sale by a controlled foreign corporation (CFC) of
the stock of a lower-tier foreign corporation treated as a dividend (attach Form(s) 5471)
(see instructions) . . . . . . . . . . . . . . . . . . . . . 100
Subpart F inclusions derived from hy
id dividends of tiered corporations (attach Form(s)
5471) (see instructions) . . . . . . . . . . . . . . . . . . .
c Other inclusions from CFCs under subpart F not included on line 16a, 16b, or 17 (attach
Form(s) 5471) (see instructions) . . . . . . . . . . . . . . . . .
17 Global Intangible Low-Taxed Income (GILTI) (attach Form(s) 5471 and Form 8992) . .
18 Gross-up for foreign taxes deemed paid . . . . . . . . . . . . . .
19 IC-DISC and former DISC dividends not included on line 1, 2, or 3 . . . . . .
20 Other dividends . . . . . . . . . . . . . . . . . . . . .
21 Deduction for dividends paid on certain prefe
ed stock of public utilities . . . .
22 Section 250 deduction (attach Form 8993) . . . . . . . . . . . . .
23 Total dividends and inclusions. Add column (a), lines 9 through 20. Enter here and on
page 1, line 4 . . . . . . . . . . . . . . . . . . . . . .
24 Total special deductions. Add column (c), lines 9 through 22. Enter here and on page 1, line 29b . . . . . . .
Form 1120 (2021)
Form 1120 (2021) Page 3
Schedule J Tax Computation and Payment (see instructions)
Part I—Tax Computation
1 Check if the corporation is a member of a controlled group (attach Schedule O (Form 1120)). See instructions ▶
2 Income tax. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 Base erosion minimum tax amount (attach Form 8991) . . . . . . . . . . . . . . . . . . 3
4 Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 a Foreign tax credit (attach Form 1118) . . . . . . . . . . . . . . . 5a
Credit from Form 8834 (see instructions) . . . . . . . . . . . . . . 5b
c General business credit (attach Form 3800) . . . . . . . . . . . . . 5c
d Credit for prior year minimum tax (attach Form 8827) . . . . . . . . . . 5d
e Bond credits from Form 8912 . . . . . . . . . . . . . . . . . 5e
6 Total credits. Add lines 5a through 5e . . . . . . . . . . . . . . . . . . . . . . 6
7 Subtract line 6 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 Personal holding company tax (attach Schedule PH (Form 1120)) . . . . . . . . . . . . . . . 8
9 a Recapture of investment credit (attach Form 4255) . . . . . . . . . . . 9a
Recapture of low-income housing credit (attach Form 8611) . . . . . . . . 9
c Interest due under the look-back method—completed long-term contracts (attach
Form 8697) . . . . . . . . . . . . . . . . . . . . . . . 9c
d Interest due under the look-back method—income forecast method (attach Form 8866) 9d
e Alternative tax on qualifying shipping activities (attach Form 8902) . . . . . . 9e
f Interest/tax due under section 453A(c) and/or section 453(l) . . . . . . . . 9f
g Other (see instructions—attach statement) . . . . . . . . . . . . . 9g
10 Total. Add lines 9a through 9g . . . . . . . . . . . . . . . . . . . . . . . . . 10
11 Total tax. Add lines 7, 8, and 10. Enter here and on page 1, line 31 . . . . . . . . . . . . . . 11
Part II—Reserved For Future Use
12 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Part III—Payments and Refundable Credits
13 2020 overpayment credited to 2021 . . . . . . . . . . . . . . . . . . . . . . . 13
14 2021 estimated tax payments . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 2021 refund applied for on Form 4466 . . . . . . . . . . . . . . . . . . . . . . . 15 ( )
16 Combine lines 13, 14, and 15 . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 Tax deposited with Form 7004 . . . . . . . . . . . . . . . . . . . . . . . . . 17
18 Withholding (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 18
19 Total payments. Add lines 16, 17, and 18 . . . . . . . . . . . . . . . . . . . . . 19
20 Refundable credits from:
a Form 2439 . . . . . . . . . . . . . . . . . . . . . . . 20a
Form 4136 . . . . . . . . . . . . . . . . . . . . . . . 20
c Reserved for future use . . . . . . . . . . . . . . . . . . . 20c
d Other (attach statement—see instructions) . . . . . . . . . . . . . 20d
21 Total credits. Add lines 20a through 20d . . . . . . . . . . . . . . . . . . . . . . 21
22 Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23 Total payments and credits. Add lines 19 and 21. Enter here and on page 1, line 33 . . . . . . . . . 23
Form 1120 (2021)
a
Highlight
Form 1120 (2021) Page 4
Schedule K Other Information (see instructions)
1 Check accounting method: a Cash b Accrual c Other (specify) ▶ Yes No
2 See the instructions and enter the:
a Business activity code no. ▶
Business activity ▶
c Product or service ▶
3 Is the corporation a subsidiary in an affiliated group or a parent–subsidiary controlled group? . . . . . . . . . .
If “Yes,” enter name and EIN of the parent corporation ▶
4 At the end of the tax year:
a
Did any foreign or domestic corporation, partnership (including any entity treated as a partnership), trust, or tax-exempt
organization own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of the
corporation’s stock entitled to vote? If “Yes,” complete Part I of Schedule G (Form 1120) (attach Schedule G) . . . . . .
Did any individual or estate own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all
classes of the corporation’s stock entitled to vote? If “Yes,” complete Part II of Schedule G (Form 1120) (attach Schedule G) .
5 At the end of the tax year, did the corporation:
a
Own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote of
any foreign or domestic corporation not included on Form 851, Affiliations Schedule? For rules of constructive ownership, see instructions.
If “Yes,” complete (i) through (iv) below.
(i) Name of Corporation
(ii) Employer
Identification Number
(if any)
(iii) Country of
Incorporation
(iv) Percentage
Owned in Voting
Stock
Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in any foreign or domestic partnership
(including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions.
If “Yes,” complete (i) through (iv) below.
(i) Name of Entity
(ii) Employer
Identification Number
(if any)
(iii) Country of
Organization
(iv) Maximum
Percentage Owned in
Profit, Loss, or Capital
6
During this tax year, did the corporation pay dividends (other than stock dividends and distributions in exchange for stock) in
excess of the corporation’s cu
ent and accumulated earnings and profits? See sections 301 and 316 . . . . . . . .
If “Yes,” file Form 5452, Corporate Report of Nondividend Distributions. See the instructions for Form 5452.
If this is a consolidated return, answer here for the parent corporation and on Form 851 for each subsidiary.
7
At any time during the tax year, did one foreign person own, directly or indirectly, at least 25% of the total voting power of all
classes of the corporation’s stock entitled to vote or at least 25% of the total value of all classes of the corporation’s stock? .
For rules of attribution, see section 318. If “Yes,” enter:
(a) Percentage owned ▶ and (b) Owner’s country ▶
(c) The corporation may have to file Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign
Corporation Engaged in a U.S. Trade or Business. Enter the number of Forms 5472 attached ▶
8 Check this box if the corporation issued publicly offered debt instruments with original issue discount . . . . . . ▶
If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments.
9 Enter the amount of tax-exempt interest received or accrued during the tax year ▶ $
10 Enter the number of shareholders at the end of the tax year (if 100 or fewer) ▶
11 If the corporation has an NOL for the tax year and is electing to forego the ca
yback period, check here (see instructions) ▶
If the corporation is filing a consolidated return, the statement required by Regulations section 1.1502-21(b)(3) must be attached
or the election will not be valid.
12 Enter the available NOL ca
yover from prior tax years (do not reduce it by any deduction reported on
page 1, line 29a.) . . . . . . . . . . . . . . . . . . . . . . . . . ▶ $
Form 1120 (2021)
Form 1120 (2021) Page 5
Schedule K Other Information (continued from page 4)
13 Are the corporation’s total receipts (page 1, line 1a, plus lines 4 through 10) for the tax year and its total assets at the end of the
tax year less than $250,000? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yes No
If “Yes,” the corporation is not required to complete Schedules L, M-1, and M-2. Instead, enter the total amount of cash
distributions and the book value of property distributions (other than cash) made during the tax year ▶ $
14 Is the corporation required to file Schedule UTP (Form 1120), Uncertain Tax Position Statement? See instructions . . . .
If “Yes,” complete and attach Schedule UTP.
15a Did the corporation make any payments in 2021 that would require it to file Form(s) 1099? . . . . . . . . . . .
If “Yes,” did or will the corporation file required Form(s) 1099? . . . . . . . . . . . . . . . . . . . .
16 During this tax year, did the corporation have an 80%-or-more change in ownership, including a change due to redemption of its
own stock? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17 During or subsequent to this tax year, but before the filing of this return, did the corporation dispose of more than 65% (by value)
of its assets in a taxable, non-taxable, or tax defe
ed transaction? . . . . . . . . . . . . . . . . . .
18 Did the corporation receive assets in a section 351 transfer in which any of the transfe
ed assets had a fair market basis or fair
market value of more than $1 million? . . . . . . . . . . . . . . . . . . . . . . . . . . .
19 During the corporation’s tax year, did the corporation make any payments that would require it to file Forms 1042 and 1042-S
under chapter 3 (sections 1441 through 1464) or chapter 4 (sections 1471 through 1474) of the Code? . . . . . . . .
20 Is the corporation operating on a cooperative basis?. . . . . . . . . . . . . . . . . . . . . . .
21 During the tax year, did the corporation pay or accrue any interest or royalty for which the deduction is not allowed under section
267A? See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If “Yes,” enter the total amount of the disallowed deductions ▶ $
22 Does the corporation have gross receipts of at least $500 million in any of the 3 preceding tax years? (See sections 59A(e)(2)
and (3)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If “Yes,” complete and attach Form 8991.
23 Did the corporation have an election under section 163(j) for any real property trade or business or any farming business in effect
during the tax year? See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . .
24 Does the corporation satisfy one or more of the following? See instructions . . . . . . . . . . . . . . . .
a The corporation owns a pass-through entity with cu
ent, or prior year ca
yover, excess business interest expense.
The corporation’s aggregate average annual gross receipts (determined under section 448(c)) for the 3 tax years preceding the
cu
ent tax year are more than $26 million and the corporation has business interest expense.
c The corporation is a tax shelter and the corporation has business interest expense.
If “Yes,” complete and attach Form 8990.
25 Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund? . . . . . . . . . . . . . .
If “Yes,” enter amount from Form 8996, line 15 . . . . ▶ $
26
Since December 22, 2017, did a foreign corporation directly or indirectly acquire substantially all of the properties held directly or
indirectly by the corporation, and was the ownership percentage (by vote or value) for purposes of section 7874 greater than
50% (for example, the shareholders held more than 50% of the stock of the foreign corporation)? If “Yes,” list the ownership
percentage by vote and by value. See instructions . . . . . . . . . . . . . . . . . . . . . . .
Percentage: By Vote By Value
Form 1120 (2021)
Form 1120 (2021) Page 6
Schedule L Balance Sheets per Books Beginning of tax year End of tax yea
( ) ( )
( ) ( )
( ) ( )
( ) ( )
( ) ( )
Assets (a) (b) (c) (d)
1 Cash . . . . . . . . . . . .
2a Trade notes and accounts receivable . . .
Less allowance for bad debts . . . . .
3 Inventories . . . . . . . . . . .
4 U.S. government obligations . . . . .
5 Tax-exempt securities (see instructions) . .
6 Other cu
ent assets (attach statement) . .
7 Loans to shareholders . . . . . . .
8 Mortgage and real estate loans . . . . .
9 Other investments (attach statement) . . .
10a Buildings and other depreciable assets . .
Less accumulated depreciation . . . . .
11a Depletable assets . . . . . . . . .
Less accumulated depletion . . . . . .
12 Land (net of any amortization) . . . . .
13a Intangible assets (amortizable only) . . .
Less accumulated amortization . . . . .
14 Other assets (attach statement) . . . . .
15 Total assets . . . . . . . . . .
Liabilities and Shareholders’ Equity
16 Accounts payable . . . . . . . . .
17 Mortgages, notes, bonds payable in less than 1 yea
18 Other cu
ent liabilities (attach statement) . .
19 Loans from shareholders . . . . . . .
20 Mortgages, notes, bonds payable in 1 year or more
21 Other liabilities (attach statement) . . . .
22 Capital stock: a Prefe
ed stock . . . .
Common stock . . . .
23 Additional paid-in capital . . . . . . .
24 Retained earnings—Appropriated (attach statement)
25 Retained earnings—Unappropriated . . .
26 Adjustments to shareholders’ equity (attach statement)
27 Less cost of treasury stock . . . . . .
28 Total liabilities and shareholders’ equity . .
Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return
Note: The corporation may be required to file Schedule M-3. See instructions.
1 Net income (loss) per books . . . . . .
2 Federal income tax per books . . . . .
3 Excess of capital losses over capital gains .
4
Income subject to tax not recorded on books
this year (itemize):
5
Expenses recorded on books this year not
deducted on this return (itemize):
a Depreciation . . . . $
Charitable contributions . $
c Travel and entertainment . $
6 Add lines 1 through 5 . . . . . . . .
7
Income recorded on books this year
not included on this return (itemize):
Tax-exempt interest $
8
Deductions on this return not charged
against book income this year (itemize):
a Depreciation . . $
Charitable contributions $
9 Add lines 7 and 8 . . . . . .
10 Income (page 1, line 28)—line 6 less line 9
Schedule M-2 Analysis of Unappropriated Retained Earnings per Books (Schedule L, Line 25)
1 Balance at beginning of year . . . . .
2 Net income (loss) per books . . . . . .
3 Other increases (itemize):
4 Add lines 1, 2, and 3 . . . . . . . .
5 Distributions: a Cash . . . . .
Stock . . . .
c Property . . . .
6 Other decreases (itemize):
7 Add lines 5 and 6 . . . . . .
8 Balance at end of year (line 4 less line 7)
Form 1120 (2021)
SCHEDULE G
(Form 1120)
(Rev. December 2011)
Department of the Treasury
Internal Revenue Service
Information on Certain Persons Owning the
Corporation’s Voting Stock
▶ Attach to Form 1120.
▶ See instructions on page 2.
OMB No. 1545-0123
Name Employer identification number (EIN)
Part I Certain Entities Owning the Corporation’s Voting Stock. (Form 1120, Schedule K, Question 4a). Complete
columns (i) through (v) below for any foreign or domestic corporation, partnership (including any entity treated
as a partnership), trust, or tax-exempt organization that owns directly 20% or more, or owns, directly or
indirectly, 50% or more of the total voting power of all classes of the corporation’s stock entitled to vote (see
instructions).
(i) Name of Entity
(ii) Employer Identification
Number (if any)
(iii) Type of Entity (iv) Country of Organization (v) Percentage Owned in Voting Stock
Part II Certain Individuals and Estates Owning the Corporation’s Voting Stock. (Form 1120, Schedule K,
Question 4b). Complete columns (i) through (iv) below for any individual or estate that owns directly 20% or
more, or owns, directly or indirectly, 50% or more of the total voting power of all classes of the corporation’s
stock entitled to vote (see instructions).
(i) Name of Individual or Estate
(ii) Identifying Number
(if any)
(iii) Country of
Citizenship (see
instructions)
(iv) Percentage Owned
in Voting Stock
For Paperwork Reduction Act Notice,
see the Instructions for Form 1120.
Cat. No. 52684S Schedule G (Form 1120) (Rev. 12-2011)
Schedule G (Form 1120) (Rev. 12-2011) Page 2
General Instructions
Purpose of Form
Use Schedule G (Form 1120) to provide
information applicable to certain entities,
individuals, and estates that own, directly,
20% or more, or own, directly or indirectly,
50% or more of the total voting power of all
classes of the corporation’s stock entitled
to vote.
Who Must File
Every corporation that answers “Yes” to
Form 1120, Schedule K, Questions 4a or
4b, must file Schedule G to provide the
additional information requested for certain
entities, individuals, and estates owning the
corporation’s voting stock.
Constructive Ownership of
the Corporation
For purposes of Schedule G (Form 1120),
the constructive ownership rules of section
267(c) (excluding section 267(c)(3)) apply to
ownership of interests in corporate stock
and ownership of interests in the profit,
loss, or capital of a partnership. An interest
in the corporation owned directly or
indirectly by or for another entity
(corporation, partnership, estate, or trust) is
considered to be owned proportionately by
the owners (shareholders, partners, or
eneficiaries) of the owning entity. Also,
under section 267(c), an individual is
considered to own an interest owned
directly or indirectly by or for his or her
family. The family of an individual includes
only that individual’s spouse,
others,
sisters, ancestors, and lineal descendants.
An interest will be attributed from an
individual under the family attribution rules
only if the person to whom the interest is
attributed owns a direct or an indirect
interest in the corporation under section
267(c)(1) or (5). However, for purposes of
these instructions, an individual will not be
considered to own, under section 267(c)(2),
an interest in the corporation owned,
directly or indirectly, by a family member
unless the individual also owns an interest
in the corporation either directly or
indirectly through a corporation,
partnership or trust.
Example 1. Corporation A owns,
directly, a 50% interest in the profit, loss,
or capital of Partnership B. Corporation A
also owns, directly, a 15% interest in the
profit, loss, or capital of Partnership C and
owns, directly, 15% of the voting stock of
Corporation D. Partnership B owns,
directly, a 70% interest in the profit, loss,
or capital of Partnership C and owns,
directly, 70% of the voting stock of
Corporation D. Corporation A owns,
indirectly, through Partnership B, a 35%
interest (50% of 70%) in the profit, loss, or
capital of Partnership C and owns,
indirectly, 35% of the voting stock of
Corporation D. Corporation A owns,
directly or indirectly, a 50% interest in the
profit, loss, or capital of Partnership C
(15% directly and 35% indirectly), and
owns, directly or indirectly, 50% of the
voting stock of Corporation D (15% directly
and 35% indirectly).
Corporation D reports in Part I that its
voting stock is owned, directly or indirectly,
50% by Corporation A and is owned,
directly, 70% by Partnership B.
Example 2. A owns, directly, 50% of the
voting stock of Corporation X. B, the
daughter of A, does not own, directly, any
interest in Corporation X and does not
own, indirectly, any interest in Corporation
X through any entity (corporation,
partnership, trust, or estate). Therefore, the
family attribution rules do not apply and,
for the purposes of Part II, the 50% interest
of A in Corporation X is not attributed to B.
Example 3. A owns, directly, 50% of the
voting stock of Corporation X. B, the
daughter of A, does not own, directly, any
interest in X but does own, indirectly, 10%
of the voting stock of Corporation X
through Trust T of which she is the sole
eneficiary. No other family member of A or
B owns, directly, any interest in
Corporation X nor does any own, indirectly,
any interest in Corporation X through any
entity. Neither A nor B owns any other
interest in Corporation X through any entity.
For the purposes of Part II, the 50%
interest of A in the voting stock of
Corporation X is attributed to B and the
10% interest of B in the voting stock of
Corporation X is attributed to A. A owns,
directly or indirectly, 60% of the voting
stock of Corporation X, 50% directly and
10% indirectly through B. B owns, directly
or indirectly, 60% of the voting stock of
Corporation X (50% indirectly through A
and 10% indirectly through Trust T).
Specific Instructions
Part I
Complete Part I if the corporation
answered “Yes” to Form 1120, Schedule K,
Question 4a. List each foreign or domestic
corporation, partnership, trust, or tax-
exempt organization that owns, at the end
of the tax year, directly 20% or more, or
owns, directly or indirectly, 50% or more of
the total voting power of all classes of the
corporation’s stock entitled to vote.
Indicate the name of the entity, employer
identification number (if any), type of entity
(corporation, partnership, trust, or tax-
exempt organization), country of
organization, and the percentage owned,
directly or indirectly, of the voting stock of
the corporation.
For an affiliated group filing a
consolidated tax return, list the parent
corporation rather than the subsidiary
members. List the entity owner of a
disregarded entity rather than the
disregarded entity. If the owner of a
disregarded entity is an individual rather
than an entity, list the individual in Part II.
Part II
Complete Part II if the corporation
answered “Yes” to Form 1120, Schedule K,
Question 4b. List each individual or estate
that owns, at the end of the tax year,
directly 20% or more, or owns, directly or
indirectly, 50% or more, of the total voting
power of all classes of the corporation’s
stock entitled to vote. Indicate the name of
the individual or estate, taxpayer
identification number (if any), country of
citizenship (for an estate, the citizenship of
the decedent), and the percentage owned,
directly or indirectly, of the voting stock of
the corporation.
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f1_1_0_[0]: PET KNGDOM INC
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Form 1125-A
(Rev. November 2018)
Department of the Treasury
Internal Revenue Service
Cost of Goods Sold
▶ Attach to Form 1120, 1120-C, 1120-F, 1120S, or 1065.
▶ Go to www.irs.gov/Form1125A for the latest information.
OMB No. 1545-0123
Name Employer identification numbe
1 Inventory at beginning of year . . . . . . . . . . . . . . . . . . . . . 1
2 Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 Cost of labor . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 Additional section 263A costs (attach schedule) . . . . . . . . . . . . . . . . 4
5 Other costs (attach schedule) . . . . . . . . . . . . . . . . . . . . . 5
6 Total. Add lines 1 through 5 . . . . . . . . . . . . . . . . . . . . . . 6
7 Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . 7
8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on Form 1120, page 1, line 2 or the
appropriate line of your tax return. See instructions . . . . . . . . . . . . . . . 8
9a Check all methods used for valuing closing inventory:
(i) Cost
(ii) Lower of cost or market
(iii) Other (Specify method used and attach explanation.) ▶
Check if there was a writedown of subnormal goods . . . . . . . . . . . . . . . . . . . . . . ▶
c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) . . . . . . ▶
d If the LIFO inventory method was used for this tax year, enter amount of closing inventory computed
under LIFO . . . . . . . . . . . . . . . . . . . . . . . . . . . 9d
e If property is produced or acquired for resale, do the rules of section 263A apply to the entity? See instructions . . Yes No
f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If “Yes,”
attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No
Section references are to the Internal
Revenue Code unless otherwise noted.
What's New
Small business taxpayers. For tax years
eginning after December 31, 2017, the
following apply.
• A small business taxpayer (defined
elow), may use a method of accounting for
inventories that either: (1) treats inventories
as nonincidental materials and supplies, or
(2) conforms to the taxpayer's financial
accounting treatment of inventories.
• A small business taxpayer is not required
to capitalize costs under section 263A.
General Instructions
Purpose of Form
Use Form 1125-A to calculate and deduct
cost of goods sold for certain entities.
Who Must File
Filers of Form 1120, 1120-C, 1120-F,
1120S, or 1065, must complete and attach
Form 1125-A if the applicable entity reports
a deduction for cost of goods sold.
Inventories
Generally, inventories are required at the
eginning and end of each tax year if the
production, purchase, or sale of
merchandise is an income-producing
factor. See Regulations section 1.471-1. If
inventories are required, you generally
must use an accrual method of accounting
for sales and purchases of inventory items.
Exception for certain taxpayers. A small
usiness taxpayer (defined below), can
adopt or change its accounting method to
account for inventories in the same manner
as material and supplies that are non-
incidental, or conform to its treatment of
inventories in an applicable financial
statement (as defined in section 451(b)(3)),
or if it does not have an applicable financial
statement, the method of accounting used
in its books and records prepared in
accordance with its accounting
procedures. See section 471(c)(3).
A small business taxpayer claiming
exemption from the requirement to keep
inventories is changing its method of
accounting for purposes of section 481.
For additional guidance on this method of
accounting, see Pub. 538, Accounting
Periods and Methods. For guidance on
changing to this method of accounting, see
Form 3115 and the Instructions for Form
3115.
Small business taxpayer. A small
usiness taxpayer is a taxpayer that (a) has
average annual gross receipts of $25
million or less (indexed for inflation) for the
3 prior tax years, and (b) is not a tax shelter
(as defined in section 448(d)(3)). See Pub.
538.
Uniform capitalization rules. The uniform
capitalization rules of section 263A
generally require you to capitalize, or
include in inventory, certain costs incu
ed
in connection with the following.
• The production of real property and
tangible personal property held in inventory
or held for sale in the ordinary course of
usiness.
• Real property or personal property
(tangible and intangible) acquired for resale.
• The production of real property and
tangible personal property for use in its
trade or business or in an activity engaged
in for profit.
A small business taxpayer (defined
above) is not required to capitalize costs
under section 263A. See section 263A(i).
See the discussion on section 263A
uniform capitalization rules in the
instructions for your tax return before
completing Form 1125-A. Also see
Regulations sections 1.263A-1 through
1.263A-3. See Regulations section
1.263A-4 for rules for property produced in
a farming business.
For Paperwork Reduction Act Notice, see instructions. Cat. No. 55988R Form 1125-A (Rev. 11-2018)
Form 1125-A (Rev. 11-2018) Page 2
Specific Instructions
Line 1. Inventory at Beginning of
Yea
If you are changing your method of
accounting for the cu
ent tax year, you
must refigure last year's closing inventory
using the new method of accounting. Enter
the result on line 1. If there is a difference
etween last year's closing inventory and
the refigured amount, attach an
explanation and take it into account when
figuring any section 481(a) adjustment.
Line 2. Purchases
Reduce purchases by items withdrawn for
personal use. For a partnership, the cost of
these items should be shown on Schedule
K and Schedule K-1 as distributions to
partners.
Line 4. Additional Section 263A
Costs
If you elected a simplified method of
accounting, enter on line 4 the balance of
section 263A costs paid or incu
ed during
the tax year not includible on lines 2, 3, and
5.
If you elected the simplified production
method, additional section 263A costs are
generally those costs, other than interest,
that were not capitalized under your
method of accounting immediately prior to
the effective date of section 263A, but are
now required to be capitalized under
section 263A. For details, see Regulations
section 1.263A-2(b).
If you elected the simplified resale
method, additional section 263A costs are
generally those costs incu
ed with respect
to the following categories.
• Off-site storage or warehousing.
• Purchasing.
• Handling, such as processing,
assembling,...