General information about Form 1120 in ProSeries Professional

Use Form 1120, U.S. Corporation Income Tax Return, to report the income, gains, losses, deductions, credits, and to figure the income tax liability of a corporation.

General information

Line A1, Consolidated return

If this return is a consolidated return, check box A1, and attach Form 851, Affiliations Schedule. Also, for the first year a consolidated return is filed, each subsidiary must attach Form 1122, Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return, to the consolidated return.

Line A2, Personal holding company

The program checks the personal holding company box only when there is personal holding company tax on Schedule PH, Part III, line 26.

To activate Schedule PH, the 60% PHC Income Test Worksheet, and related statements, you must check the Schedule PH box on the Corporation Information Worksheet.

The program checks the personal holding company box to indicate the corporation is a personal holding company only when the 60% PHC test is met, and there is an amount on Schedule PH, line 13 (Undistributed PHC Income) or line 25 (PHC income).

Line D, Total assets

If the total ending assets on Schedule L, line 15d are greater than or equal to zero, the program enters the amount from line 15d in line D. However, if you checked the Schedule K, line 13 box to suspend the calculations of Schedules L, M-1 and M-2, enter the corporation's total ending assets here.

Line 10, Other income

Enter other income in the expanding table on line 10, or on the Other Income Worksheet, but not both. QuickZoom from line 10 to go to the Other Income Worksheet.

Form 1120, Schedules L and M-1

Companies with less than $250,000 of total receipts and less than $250,000 in assets no longer need to complete Schedules L, M-1 and M-2 of Form 1120. If the corporation meets these exceptions and wishes to suspend the calculations, check the box immediately below Schedule K, question 13. Schedules L, M-1 and M-2 will not calculate if this box is checked.

Schedule L, Balance Sheets per Books

These balance sheets perform simple addition and subtraction. No amounts carry to Schedule L from other forms or worksheets except:

The IRS requires you to complete these balance sheets per books. For example, if you use different depreciation methods for book purposes versus tax purposes, then your book accumulated depreciation is probably different than your tax accumulated depreciation. On lines 10b(a) and 10b(c), enter your accumulated depreciation per books.

Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return

Use Schedule M-1 to reconcile the income (loss) calculated on your accounting books and records with the income (loss) calculated on this tax return.

The Book/Return Income (Loss) Reconciliation Worksheet is a companion worksheet to Schedule M-1. The worksheet contains the most common book to tax reconciling adjustments. You are not required to use the worksheet. However, to change calculated amounts on Schedule M-1, lines 4, 5, 7 or 8, you must access the worksheet.

For best results, we recommend you enter data on Schedule M-1 or on the worksheet, but not both.

Related topics

• Generating estimated tax vouchers for an 1120 Corporation
• Filing Form 2553 with a 1120 or 1120S return in ProSeries