Instructions for Form 1120-S 2023 Internal Revenue Service

Report rental real estate activity income (loss) on Form 8825 and line 2 of Schedule K and box 2 of Schedule K-1, rather than on page 1 of Form 1120-S. Report credits related to rental real estate activities on lines 13c and 13d of Schedule K (box 13, codes E and F, of Schedule K-1) and low-income housing credits on lines 13a and 13b of Schedule K (box 13, codes C and D of Schedule K-1). Use Form 1120-S to report the income, gains, losses, deductions, credits, etc., of a domestic corporation or other entity for any tax year covered by an election to be an S corporation.

1. Lines 15a through 15f must be completed for all shareholders.
2. Each shareholder’s pro rata share items (boxes 1 through 17 of Schedule K-1) are figured by multiplying the corresponding Schedule K amount by the percentage in item G.
3. Attach a statement to Schedule K-1 that provides the shareholder’s pro rata share of the basis amounts the shareholder will need to figure the amounts to report on Part II, lines 1a, 2a, and 3a; or lines 4a and 5a of Form 3468.
4. While the corporation itself does not pay taxes on its income, shareholders must consider how the pass-through income affects their personal tax situation.
5. Attach a statement to Form 1120-S and Schedule K-1 that shows other items not shown on lines 15a through 15e that are adjustments or tax preference items or that the shareholder needs to complete Form 6251 or Schedule I (Form 1041).
6. From there, file IRS Form 2553 to elect S corporation taxation.

If the partnership agreement doesn’t express the partner’s share of profit, loss, and capital as fixed percentages, use a reasonable method in arriving at the percentage items for the purposes of completing question 4b. Such method must be consistent with the partnership agreement. The method used to figure a percentage share of profit, loss, and capital must be applied consistently from year to year.

Excess Net Passive Income Tax Worksheet for Line 23a

The penalty won’t be imposed if the corporation can show that the failure to pay on time was due to reasonable cause. The authorization will automatically end no later than the due date (excluding extensions) for filing the corporation’s 2024 tax return. If the corporation wants to expand the paid preparer’s authorization or revoke the authorization before it ends, see Pub. If a return is filed on behalf of a corporation by a receiver, trustee, or assignee, the fiduciary must sign the return instead of the corporate officer. Returns and forms signed by a receiver or trustee in bankruptcy on behalf of a corporation must be accompanied by a copy of the order or instructions of the court authorizing signing of the return or form. If the S corporation election was terminated during the tax year and the corporation reverts to a C corporation, file Form 1120-S for the S corporation’s short year by the due date (including extensions) of the C corporation’s short year return.

If tax is due, the penalty is the amount stated above plus 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. The minimum penalty for a tax return required to be filed in 2024 that is more than 60 days late is the smaller of the tax due or $485. S corporations can generally electronically file (e-file) Form 1120-S, related forms, schedules, statements, and attachments; Form 7004 (automatic extension of time to file); and Forms 940, 941, and 944 (employment tax returns). Form 1099 and other information returns can also be electronically filed. The option to e-file doesn’t, however, apply to certain returns.

Filing requirements:

So the amounts should reflect each trade or business’s portion of the qualified items of income, gain, deduction, or loss reported in the applicable box of the shareholder’s Schedule K-1. Each item included under “Other income (loss)” and “Other deductions” must be stated separately, identifying the nature and amount of each item. The S corporation should also use Statement A to report each shareholder’s pro rata share of QBI items, W-2 wages, UBIA of qualified property, qualified PTP items, and section 199A dividends reported to the S corporation by reconciliation in account definition purpose and types another entity.

When is the Deadline for Filing S Corp Taxes?

Enter on line 16c nondeductible expenses paid or incurred by the corporation. This is the total amount of credits determined by the S corporation for which an elective payment election is being made. Enter the total amount of gross income (within the meaning of section 613(a)) from all oil, gas, and geothermal properties received or accrued during the tax year and included on page 1, Form 1120-S. Give each shareholder a statement that shows the separate amounts included in the computation of the amounts on lines 15d and 15e of Schedule K. If any part of the adjustment is allocable to net short-term capital gain (loss), net long-term capital gain (loss), or net section 1231 gain (loss), attach a statement that identifies the amount of the adjustment allocable to each type of gain or loss. Figure the what is the reciprocal of 7 adjustment by subtracting the AMT deduction for depreciation from the regular tax deduction and enter the result on line 15a.

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

225, Farmer’s Tax Guide, sections 263A(d) and (e), and Regulations section 1.263A-4 for definitions and other details. If the corporation has had debt discharged resulting from a title 11 bankruptcy proceeding or while insolvent, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and Pub. The following services aren’t considered in determining whether personal services are significant.

Include fringe benefit expenditures made on behalf of officers and employees owning more than 2% of the corporation’s stock. Also report these fringe benefits as wages in box 1 of Form W-2. Don’t what are the generally accepted accounting principles include amounts paid or incurred for fringe benefits of officers and employees owning 2% or less of the corporation’s stock. See the instructions for that line for information on the types of expenditures that are treated as fringe benefits and for the stock ownership rules.