Form 8916-A

(Rev. November 2019)

Department of the Treasury 

Internal Revenue Service

Supplemental Attachment to Schedule M-3

▶ Attach to Schedule M-3 for Form 1065, 1120, 1120-L, 1120-PC, or 1120-S.

▶ Go to www.irs.gov/Form1120 for the latest information.

OMB No. 1545-0123

Name of common parent Employer identification number

Name of subsidiary Employer identification number

Part I Cost of Goods Sold

 Cost of Goods Sold Items 

(a) 

Expense per

Income Statement

(b) 

Temporary

Difference

(c) 

Permanent

Difference

(d) 

Deduction per Tax 

Return

1 Amounts attributable to cost flow assumptions .

2 Amounts attributable to:

a Stock option expense . . . . . . . . . .

b Other equity-based compensation . . . . . .

c Meals and entertainment . . . . . . . . .

d Parachute payments . . . . . . . . . .

e Compensation with section 162(m) limitation . .

f Pension and profit sharing . . . . . . . .

g Other post-retirement benefits . . . . . . .

h Deferred compensation . . . . . . . . .

i Reserved . . . . . . . . . . . . . .

j Amortization . . . . . . . . . . . . .

k Depletion . . . . . . . . . . . . . .

l Depreciation . . . . . . . . . . . . .

m Corporate-owned life insurance premiums . . .

n Other section 263A costs . . . . . . . . .

3 Inventory shrinkage accruals. . . . . . . .

4 Excess inventory and obsolescence reserves . .

5 Lower of cost or market write-downs . . . . .

6 Other items with differences (attach statement) .

7 Other items with no differences . . . . . . .

8 

 

Total cost of goods sold. Add lines 1 through 7 in 

columns a, b, c, and d. Enter totals on the 

applicable Schedule M-3. See instructions . . .

For Paperwork Reduction Act Notice, see instructions. Cat. No. 48657X Form 8916-A (Rev. 11-2019)
Form 8916-A (Rev. 11-2019) Page 2

Part II Interest Income

Interest Income Item

(a) 

Income (Loss) per Income 

Statement

(b) 

Temporary

Difference

(c) 

Permanent

Difference

(d) 

Income (Loss) per 

Tax Return

1 Tax-exempt interest 

income

2 Interest income from hybrid 

securities

3 Sale/lease interest income

4a 

 

Intercompany interest 

income — From outside tax 

affiliated group

4b 

 

Intercompany interest 

income — From tax 

affiliated group

5 Other interest income

6 

 

 

 

Total interest income. Add 

lines 1 through 5 in columns 

a, b, c, and d. Enter total on 

the applicable Schedule M-3. 

See instructions.

Part III Interest Expense

Interest Expense Item

(a) 

Expense per Income

Statement

(b) 

Temporary

Difference

(c) 

Permanent

Difference

(d) 

Deduction per Tax Return

1 Interest expense from 

hybrid securities

2 Lease/purchase interest 

expense

3a 

 

Intercompany interest 

expense — Paid to outside 

tax affiliated group

3b 

 

Intercompany interest 

expense — Paid to tax 

affiliated group

4 Other interest expense

5 

 

 

 

Total interest expense. Add 

lines 1 through 4 in columns 

a, b, c, and d. Enter total on 

the applicable Schedule M-3. 

See instructions.

Form 8916-A (Rev. 11-2019)
Form 8916-A (Rev. 11-2019) Page 3

Section references are to the Internal Revenue Code unless 

otherwise noted.

Future Developments

For the latest information about developments related to 

Form 8916-A and its instructions, such as legislation 

enacted after they were published, go to 

www.irs.gov/Form1120.

General Instructions

Purpose of Form

Use Form 8916-A to provide a detailed schedule of the 

amounts reported on the applicable Schedule M-3 for cost 

of goods sold, interest income, and interest expense.

Who Must File

Generally, Form 8916-A must be filed for each separate 

entity required to file a Schedule M-3 for Form 1065, Form 

1120, Form 1120-C, Form 1120-L, Form 1120-PC, or Form 

1120-S. 

However, certain separate entities that (a) are required to 

file a Schedule M-3 and have less than $50 million in total 

assets at the end of the tax year, or (b) are not required to 

file a Schedule M-3 and voluntarily file a Schedule M-3, are 

not required to file Form 8916-A but may voluntarily do so. 

See the instructions for the applicable Schedule M-3 for 

each separate entity. 

Note. Schedule M-3 (Form 1120) mixed group filers, all 

Schedule M-3 (Form 1120-L) filers, and all Schedule M-3 

(Form 1120-PC) filers must file Form 8916-A.

Consolidated groups. In the case of a consolidated tax 

group, a Form 8916-A must be filed as part of the Schedules 

M-3 prepared for the parent company, each subsidiary, the 

eliminations Schedule M-3, and the consolidated Schedule 

M-3. It is not required that the supporting detail for Form 

8916-A, Part I, line 6, be presented for the eliminations 

Schedule M-3 or the consolidated Schedule M-3.

Mixed groups. In the case of a mixed group (as described in 

the instructions for Schedule M-3 for Form 1120, Form 

1120-L, and Form 1120-PC), a Form 8916-A, if applicable, is 

required at the sub-consolidated level and the subconsolidated elimination level.

How To File

Attach Form 8916-A to each applicable separate Schedule 

M-3.

Specific Instructions

Note. Any filer that completes Parts II and III of Schedule 

M-3 (Form 1120) and Form 8916-A must complete all 

columns, without exception. See the instructions for Parts II 

and III of the applicable Schedule M-3.

Part I. Cost of Goods Sold

Line 1

Report differences attributable to cost flow assumptions, for 

example, differences between book and tax LIFO 

computations. Generally, differences in the LIFO reserves for 

book and tax purposes should be reported on this line.

Line 2n

Report differences attributable to section 263A. For example, 

if book inventory costs do not equal section 471 inventory 

costs, report differences between section 471 inventory 

costs and section 263A inventory costs. This includes all 

cost of goods sold differences, not just differences 

attributable to additional section 263A cost adjustments to 

ending inventory. LIFO taxpayers using the simplified 

production method or the simplified resale method should 

report the amount of additional section 263A costs 

computed after LIFO computations. LIFO taxpayers not 

using a simplified section 263A method should report costs 

attributable to additional section 263A prior to performing 

LIFO computation. Differences due to purchasing, and 

storage and handling costs, should generally be reported on 

line 2n (to the extent not already included in lines 2a through 

2m). Report the additional section 263A cost adjustments to 

ending inventory on line 2n (and the reversal of the prior year 

ending inventory, if applicable).

Lines 4 and 5

If the taxpayer does not distinguish between obsolescence 

and excess inventory reserves and lower of cost or market 

write-downs in its general ledger, report all amounts relating 

to these reserves on line 4 for excess inventory and 

obsolescence reserves.

Line 6

Attach a statement that separately states and adequately 

discloses the nature and amount of each expense reported 

on this line. See the instructions for the applicable Schedule 

M-3 for a definition of “separately stated and adequately 

disclosed.” It is not required that the supporting detail for 

Form 8916-A, Part I, line 6, be presented for the eliminations 

Schedule M-3 or the consolidated Schedule M-3. Report 

differences between book inventory costs and section 471 

inventory costs on this line.

Line 7

Report all other items with no differences on this line. For 

example, if book inventory costs equal section 471 inventory 

costs, this line should report total book inventory and section 

471 inventory costs without regard to amounts reported on 

lines 1 through 5.

Line 8

Line 8 should equal the amount reported on Schedule M-3 

(Form 1120), Part II, line 17; Schedule M-3 (Form 1120-S), 

Part II, line 15; or Schedule M-3 (Form 1065), Part II, line 15. 

See the instructions for the applicable Schedule M-3.
Form 8916-A (Rev. 11-2019) Page 4

Part II. Interest Income

Line 1

Report on line 1, column (a), tax-exempt interest income 

defined under section 103. Complete columns (b) and (c), as 

applicable.

Line 2

Report on line 2, column (a), the total amount of interest 

income included on Schedule M-3, Part I, line 11, from 

hybrid securities characterized as debt for financial 

accounting and as equity for tax purposes. Report on line 2, 

column (d), the total amount of interest income from hybrid 

securities characterized as equity for financial accounting 

and as debt for tax purposes. Complete columns (b) and (c), 

as applicable. Report interest income from a debt that is 

both a hybrid debt and a related party debt on line 2 and not 

on line 4a or 4b.

Line 3

Report on line 3, column (a), the total interest income from 

periodic payments from transactions characterized as a 

lease for financial accounting and as a sale for tax purposes. 

Report on line 3, column (d), the total interest income from 

periodic payments from transactions characterized as a sale 

for financial accounting and as a lease for tax purposes. 

Complete columns (b) and (c), as applicable. See the 

instructions for sale versus lease for Schedule M-3, Part II, 

line 18 (Forms 1120 and 1120-L), line 17 (Form 1120-PC), or 

line 16 (Forms 1120-S and 1065).

Line 4a

Report on line 4a total intercompany interest income from an 

entity included on Schedule M-3, Part I, line 4, but not 

included on Schedule M-3, Part I, line 11. Report hybrid 

security interest income on line 2 and sale/lease interest 

income on line 3 but not on line 4a.

Line 4b

Report on line 4b total intercompany interest income from an 

entity within the tax affiliated group. Report hybrid security 

interest income on line 2 and sale/lease interest income on 

line 3 but not on line 4b.

Note. Report interest income from a debt that is both a

hybrid debt and a related party debt on line 2 but not on line 

4a or 4b.

Line 5

Report on line 5 total interest income not required to be 

reported on lines 1 through 4b.

Line 6

Line 6 must equal the amount for all columns reported on 

Schedule M-3, Part II, line 13 (Forms 1120, 1120-L, and 

1120-PC) or line 11 (Forms 1120-S and 1065). See the 

instructions for the applicable Schedule M-3.

Part III. Interest Expense

Line 1

Report on line 1, column (a), total interest expense from 

hybrid securities characterized as debt for financial 

accounting and as equity for tax purposes. Report on line 1, 

column (d), total interest expense from hybrid securities 

characterized as equity for financial accounting and as debt 

for tax purposes. Complete columns (b) and (c), as 

applicable. Report interest expense from a debt that is both 

a hybrid debt and a related party debt on line 1 but not on 

line 3a or 3b.

Line 2

Report on line 2, column (a), total interest expense from 

periodic payments from transactions characterized as a 

lease for financial accounting and as a purchase for tax 

purposes. Report on line 2, column (d), total interest expense 

from periodic payments from transactions characterized as a 

purchase for financial accounting and as a lease for tax 

purposes. Complete columns (b) and (c), as applicable. See 

the instructions for Schedule M-3, Part III, line 34 (Form 

1120), line 35 (Forms 1120-L and 1120-PC), or line 28 

(Forms 1120-S and 1065).

Line 3a

Report on line 3a total intercompany interest expense 

included on Schedule M-3, Part I, line 4, but not included on 

Schedule M-3, Part I, line 11. Report hybrid security interest 

expense or deduction on line 1 and purchase/lease interest 

expense or deduction on line 2 but not on line 3a.

Line 3b

Report on line 3b total intercompany interest expense to an 

entity within the tax affiliated group. Report hybrid security 

interest expense or deduction on line 1 and purchase/lease 

interest expense or deduction on line 2 but not on line 3b.

Note. Report interest expense from a debt that is both a 

hybrid debt and a related party debt on line 1 but not on line 

3a or 3b.

Line 4

Report on line 4 total interest expense not required to be 

reported on lines 1 through 3b.

Line 5

Line 5 must equal the amounts for all columns reported on 

Schedule M-3 (Form 1120), Part III, line 8; Schedule M-3 

(Forms 1120-PC and 1120-L), Part III, line 36; Schedule M-3 

(Form 1065), Part III, line 27; or Schedule M-3 (Form 1120-S), 

Part III, line 26. See the instructions for the applicable 

Schedule M-3.

Paperwork Reduction Act Notice. We ask for the 

information on this form to carry out the Internal Revenue 

laws of the United States. You are required to give us the 

information. We need it to ensure that you are complying 

with these laws and to allow us to figure and collect the right 

amount of tax.

You are not required to provide the information requested 

on a form that is subject to the Paperwork Reduction Act 

unless the form displays a valid OMB control number. Books 

or records relating to a form or its instructions must be 

retained as long as their contents may become material in 

the administration of any Internal Revenue law. Generally, 

tax returns and return information are confidential, as 

required by section 6103.

The time needed to complete and file this form will vary 

depending on individual circumstances. The estimated 

burden for business taxpayers filing this form is approved 

under OMB control number 1545-0123 and is included in the 

estimates shown in the instructions for their business income 

tax return.

If you have comments concerning the accuracy of these 

time estimates or suggestions for making this form simpler, 

we would be happy to hear from you. See the instructions 

for the tax return with which this form is filed.