Free Form 1120 (Schedule B) (December 2008) - Federal

SCHEDULE B (Form 1120)
(December 2008) Department of the Treasury Internal Revenue Service Name

Additional Information for Schedule M-3 Filers
See instructions on page 2. Attach to Form 1120.
Employer identification number (EIN) OMB No. 1545-0123

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Do the amounts reported on Schedule M-3 (Form 1120), Part II, lines 9 or 10, column (d), reflect allocations to this corporation from a partnership of income, gain, loss, deduction, or credit that are disproportionate to this corporation's capital contribution to the partnership or its ratio for sharing other items of the partnership? At any time during the tax year, did the corporation sell, exchange, or transfer any interest in an intangible asset to a related person as defined in section 267(b)? At any time during the tax year, did the corporation acquire any interest in an intangible asset from a related person as defined in section 267(b)?

Yes

No

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4a During the tax year, did the corporation enter into a cost-sharing arrangement with any related foreign party on whose behalf the corporation did not file Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations? b At any time during the tax year, was the corporation a participant in a cost-sharing arrangement with any related foreign party on whose behalf the corporation did not file Form 5471? 5 At any time during the tax year, did the corporation make any change in accounting principle for financial accounting purposes? See instructions for the definition of change in accounting principle At any time during the tax year, did the corporation make any change in a method of accounting for U.S. income tax purposes? At any time during the tax year, did the corporation own any voluntary employees' beneficiary association (VEBA) trusts that were used to hold funds designated for employee benefits? At any time during the tax year, did the corporation use an allocation method for mixed-service costs that varied from the Federal Energy Regulatory Commission method of accounting?
Cat. No. 49737Q Schedule B (Form 1120) (12-2008)

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For Paperwork Reduction Act Notice, see Instructions for Form 1120.

Schedule B (Form 1120) (12-2008)

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General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.

Answer "Yes," if a change in accounting principle occurred during the tax year that affected (or is expected to affect) the amount of income reported for financial statement purposes.

Purpose of Form
Use Schedule B (Form 1120) to provide answers to additional questions for filers of Schedule M-3 (Form 1120), Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More.

TIP

If the corporation has audited financial statements, any changes in accounting principle should be identified in footnotes to those statements.

Question 6. Change in Method of Accounting Corporations are generally required to file Form 3115, Application for Change in Accounting Method, or a statement in lieu thereof, to request a change in a method of accounting. See the Instructions for Form 3115 for information on requesting a change in accounting method. Question 7. Voluntary Employees' Beneficiary Association Trusts Employers that establish and fund welfare benefit plans on behalf of their employees do so through a tax-exempt trust that is referred to as a voluntary employees' beneficiary association (VEBA). See section 501(c)(9) and Regulations sections 1.501(c)(9)-1 through 1.501(c)(9)-8 for details. Answer "Yes," if the corporation owned any VEBA trusts that were used to hold funds designated for employee benefits. Question 8. Mixed-Service Costs Section 446(a) and Regulation section 1.446(a)(1) generally provide that taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books. An exception applies if book income does not clearly reflect income. Certain utilities are subject to a regulatory method of accounting imposed by the Federal Energy Regulatory Commission (FERC) to determine which expenditures are capitalized or expenses. Answer "Yes," if the corporation is subject to FERC accounting during the tax year and used an allocation method for mixed-service costs that varied from the FERC method of accounting. Otherwise, answer "No."

Who Must File
Schedule B (Form 1120) must be filed by all corporations that file a Form 1120, U.S. Corporation Tax Return, and that are required to file Schedule M-3 (Form 1120). Attach Schedule B (Form 1120) to Form 1120.

Specific Instructions
Question 1. Partnership Allocations Answer "Yes," if this corporation is a partner in a partnership and has received special allocations of income, gain, loss, deduction, or credit from such partnership. Example. P, a corporation, joins with B, an individual, in forming the PB Partnership. P and B each contribute $50,000 in cash to PB Partnership. Profits and losses are allocated equally, with the exception of depreciation, which is allocated 99% to P and 1% to B. P answers "Yes," to question 1 because its 99% allocation of depreciation deductions from PB Partnership is disproportionate to its ratio of sharing other items of income, gain, loss, deduction, or credit from PB partnership. Question 5. Changes in Accounting Principle The term "change in accounting principle," means a change from one generally accepted accounting principle to another generally accepted accounting principle as described in Statement of Financial Accounting Standards (SFAS) No. 154--Accounting Changes and Error Corrections.