Form 1120 print requirements
Form 1120, U.S. Corporation Income Tax Return, prints when you set the return type to 1120 in Organizer.
To print or calculate Form 1120, U.S. Corporation Income Tax Return:
- In Organizer, selectGeneral Information, thenBasic Return Information.
- On theEntity Informationtab, go to theReturn/Entity Typesection.
- Select1120 - U.S. Corporationfor theReturn type.
- Do a full recompute, then print.
Interest expense
When a consolidated return is subject to section 163(j) limitations, the application sets Form 1120, page 1, line 18 equal to the consolidated return's Form 8990, line 30, Total current year business interest expense deduction. This generally creates a correct adjustment between the consolidated return amount and the sum of the member Form 1120 line 18 amounts.
The application instead sets Form 1120, line 18 equal to the total amount consolidated into when either of the following applies:
- You mark theSuppress automatic calculationoption under .
- You answerNoto Schedule K, question 24.
note
The application doesn't print detail statements for Form 1120, page 1, line 18 when Form 8990 prints.
Capital gain net income
Until detail for Schedule D is entered, Form 1120, Page 1 Line 8 pulls from the
Capital gain net income
line in . Once detail for Schedule D is entered in , Line 8 pulls from the results of Schedule D in Tax Forms. Drill down on Form 1120, Page 1 Line 8 to find the calculation.
There are 2 options that affect the calculation for this line:
- In , the option toCalculate book/tax difference for capital loss and contributions on Sch M-3 of member of a consolidated groupwill suppress Capital losses carrying to Page 1 Line 8 of the return in a parent/subsidiary binder. Leave this checkbox clear if you want to display losses on Line 8 in member returns.
- In , the option toCarry Capital Loss to Page 1only applied to Single Company or Top Consolidation binders. This option carries capital loss to Form 1120, Page 1 Line 8, even when the return is at a loss.
Net operating Loss
The Net Operating Loss (NOL) calculates automatically based on the type of NOL and the Type of Entity.
For Non-SRLY Loss:
- Enter the information in a Parent, Subsidiary, Division, or Single Company binder/locator in .
- Enter the NOL in both theOriginal NOLandCarryover to...columns by year.noteTheOriginal NOLis the actual amount from the loss year and theCarryover to...represents the available amount. If none of the NOL has been used previously, these columns will have the same amount.Carryover to...amounts need to be entered for NOL to generate in Tax Forms and in statement detail.
- For consolidated returns, the available NOL consolidates, but the limitation will only apply in the Top Consolidation. Form 1120, Page 1, Line 29a will only populate in the consolidation for Non-SRLY NOL.tipOnce you calculate the actual SRLY NOL deduction on your consolidated Form 1120,
- Go back to the member return where the available NOL was entered.
- Go to .
- Enter the actual NOL utilized in theParent or Subsidiary Utilizationcolumn. This will make sure the correct available NOL carries over to next year's return.
For SRLY NOL:
- Enter the information in a Parent, Subsidiary, or Single Company binder/locator in .
- Enter the NOL in both theOriginal NOLandCarryover to...columns by year.noteTheOriginal NOLis the actual amount from the loss year and theCarryover to...represents the available amount. If none of the NOL has been used previously, these columns will have the same amount.Carryover to...amounts need to be entered for NOL to generate in Tax Forms and in statement detail.
- For consolidated returns, the limitation is applied at the legal entity level and the NOL deduction is applied to the member's return on Form 1120, Page 1, Line 29a. Any SRLY NOL deductions taken at the member level consolidate to the Top Consolidation. If the member is at a loss on Form 1120, Page 1, Line 28, even if the consolidation has income, no NOL deduction will be taken for the return.
For S 382 NOL:
- Enter the information in a Parent, Subsidiary, or Single Company binder/locator in .
- Enter the NOL in both theOriginal NOLandCarryover to...columns by year.noteTheOriginal NOLis the actual amount from the loss year and theCarryover to...represents the available amount. If none of the NOL has been used previously, these columns will have the same amount.Carryover to...amounts need to be entered for NOL to generate in Tax Forms and in statement detail.
- For consolidated returns, the limitation is applied at the legal entity level and the NOL deduction is applied to the member's return on Form 1120, Page 1, Line 29a. Any S 382 NOL deductions taken at the member level consolidate to the Top Consolidation. If the member is at a loss on Form 1120, Page 1, Line 28, even if the consolidation has income, no NOL deduction will be taken for the return.
Charitable contributions adjustment
Consolidated returns are only able to take deductions for contributions up to the limit, which is 10% of the total income. Therefore, a parent or subsidiary return may be presented in showing the total amount of contributions allowed depending on the total income. At the consolidated level, this may be limited and show as an adjustment.
A good way to identify the calculation is to drill into the charitable contributions on line 19. The workpapers will show the Taxable Income used to calculate the limitation. Taxable income doesn’t include contribution deductions, Domestic Production Activity Deduction, special deductions, NOL Carrybacks, and net capital loss carrybacks. It will generally match the total income calculated. This can also be found using the statement detail in print.
