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1120-L

Deferred acquisition costs for insurance returns

Deferred Acquisition Costs (DAC) are amortized under Section 848 and entered mostly on 1120-L returns, and occasionally on 1120-PC returns. These expenses are incurred when gathering new premiums that then need to be amortized on the 1120-L tax return.
The Deferred Acquisition Costs are located on Form 1120-L, Page 4, Schedule G.
  • In Tax Forms, select
    Federal
    , then
    1120-L - US Corporation Inc Tax Return
    , then
    1120-L - US Corporation Inc Tax Return
    , then
    Page 3
    .
  • In Organizer, select
    Deferred Acquisition Costs
    , then
    Direct Business
    , then
    Direct Business Premiums Worksheet
    . The window opens on the
    Totals
    tab.
Annual Statement Users
The tax application automatically transfers in Premiums, Advance Premiums, and Deferred and Uncollected Premiums from the Annual Statement.
Adjustments to DAC
To make adjustments in each premium type, select 1 of the pages in the
Direct Business Premiums Worksheet
 such as Annuity, Group Life, or Other Life. In the Other Adjustments to Premiums column in the last row, enter an adjustment in the field titled Other Adjustments. The Totals page sums all 3 pages for review purposes.

This article applies to:

  • PRODUCT: ONESOURCE Income Tax
  • Return type: 1120 Corporation
  • Subject: Insurance

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