Department of the Treasury

Internal Revenue Service

Publication 542

(Rev. January 2024)

Cat. No. 15072O

Corporations

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Contents

Future Developments ....................... 2

Photographs of Missing Children .............. 2

Introduction .............................. 2

Businesses Taxed as Corporations ............ 2

Property Exchanged for Stock ................ 3

Capital Contributions ....................... 4

Filing and Paying Income Taxes ............... 5

Income Tax Return ....................... 5

Penalties .............................. 5

Estimated Tax .......................... 6

U.S. Real Property Interest ................. 7

Estimated Tax Worksheet .................... 7

Accounting Methods ....................... 8

Accounting Periods ........................ 8

Recordkeeping ............................ 9

Income, Deductions, and Special Provisions ..... 9

Costs of Going Into Business ................ 9

Related Persons ......................... 9

Corporate Preference Items ................ 10

Dividends-Received Deduction ............. 10

Extraordinary Dividends .................. 11

Below-Market Loans ..................... 11

Charitable Contributions .................. 12

Capital Losses ......................... 13

Net Operating Losses .................... 14

At-Risk Limits .......................... 14

Passive Activity Limits .................... 15

Figuring Tax ............................. 15

Tax Rates ............................ 15

Base Erosion Minimum Tax ................ 15

Corporate Alternative Minimum Tax (CAMT) .... 15

Credits ............................... 15

Recapture Taxes ........................ 15

Accumulated Earnings Tax .................. 15

Distributions to Shareholders ............... 16

Money or Property Distributions ............. 16

Distributions of Stock or Stock Rights ......... 16

Constructive Distributions ................. 17

Reporting Dividends and Other Distributions .... 17

How To Get Tax Help ....................... 19

Other Useful Forms for Corporations .......... 23

Index .................................. 27

Feb 9, 2024
Future Developments

For the latest information about developments related to 

Pub. 542, such as legislation enacted after it was 

published, go to IRS.gov/Pub542. For changes that may 

affect the current tax year, see the Instructions for Form 

1120 or the applicable instructions for the corporation’s 

tax return.

What's New

New corporate alternative minimum tax. For tax years 

beginning after 2022, the Inflation Reduction Act of 2022 

amended section 55 of the Internal Revenue Code to impose a new corporate alternative minimum tax (CAMT) 

based on the adjusted financial statement income (AFSI) 

of an applicable corporation. See Corporate Alternative 

Minimum Tax (CAMT), later.

Form 1120-W now historical. Form 1120-W, Estimated 

Tax for Corporations, and the Instructions for Form 

1120-W are now historical. The 2022 revisions were the 

last revisions of both the form and its instructions. Prior 

versions are available on IRS.gov.

Photographs of Missing 

Children

The Internal Revenue Service is a proud partner with the 

National Center for Missing & Exploited Children® 

(NCMEC). Photographs of missing children selected by 

the Center may appear in instructions on pages that would 

otherwise be blank. You can help bring these children 

home by looking at the photographs and calling 

800-THE-LOST (800-843-5678) if you recognize a child.

Introduction

This publication discusses the general tax laws that apply 

to ordinary domestic corporations. It provides supplemental federal income tax information for corporations. It also 

supplements the information provided in the Instructions 

for Form 1120, U.S. Corporation Income Tax Return. However, the information given does not cover every situation 

and is not intended to replace the law or change its meaning.

Comments and suggestions. We welcome your comments about this publication and suggestions for future 

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to:

Internal Revenue Service

Tax Forms and Publications

1111 Constitution Ave. NW, IR-6526

Washington, DC 20224

Although we can’t respond individually to each comment received, we do appreciate your feedback and will 

consider your comments and suggestions as we revise 

our tax forms, instructions, and publications. Do not send 

tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions. If you have 

a tax question not answered by this publication or the How 

To Get Tax Help section at the end of this publication, go 

to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the search 

feature or viewing the categories listed.

Getting tax forms, instructions, and publications. 

Go to IRS.gov/Forms to download current and prior-year 

forms, instructions, and publications.

Ordering tax forms, instructions, and publications. 

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order 

prior-year forms and instructions. The IRS will process 

your order for forms and publications as soon as possible. 

Do not resubmit requests you’ve already sent us. You can 

get forms and publications faster online.

Additional forms. A list of other forms and statements 

that a corporation may need to file is included at the end 

of this publication. Also, see the instructions for the corporation’s tax return for additional forms and statements that 

may be required.

Useful Items

You may want to see:

Publication

Excise Taxes (Including Fuel Tax Credits and 

Refunds)

Accounting Periods and Methods

Sales and Other Dispositions of Assets

Investment Income and Expenses

Passive Activity and At-Risk Rules

946 How To Depreciate Property

Businesses Taxed as 

Corporations

The rules used to determine whether a business is taxed 

as a corporation changed for businesses formed after 

1996.

Business formed before 1997. A business formed before 1997 and taxed as a corporation under the old rules 

will generally continue to be taxed as a corporation.

 510

 538

 544

 550

 925

 946

2 Publication 542 (1-2024)
Business formed after 1996. The following businesses 

formed after 1996 are taxed as corporations.

• A business formed under a federal or state law that refers to it as a corporation, body corporate, or body politic.

• A business formed under a state law that refers to it as 

a joint-stock company or joint-stock association.

• An insurance company.

• Certain banks.

• A business wholly owned by a state or local government.

• A business specifically required to be taxed as a corporation by the Internal Revenue Code (for example, 

certain publicly traded partnerships).

• Certain foreign businesses.

• Any other business that elects to be taxed as a corporation.

Limited liability company (LLC). An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity 

separate from its owner by applying the rules in Treasury 

Regulations section 301.7701-3. An LLC can elect to be 

treated as an association taxable as a corporation by filing 

Form 8832, Entity Classification Election. See the Instructions for Form 8832. For more information about LLCs, 

see Pub. 3402, Taxation of Limited Liability Companies.

S corporations. Some corporations may meet the qualifications for electing to be S corporations. For information 

on S corporations, see the Instructions for Form 1120-S.

Personal service corporations. A corporation is a personal service corporation if it meets all of the following requirements.

1. Its principal activity during the “testing period” is performing personal services (defined later). Generally, 

the testing period for any tax year is the prior tax year. 

If the corporation has just been formed, the testing period begins on the first day of its tax year and ends on 

the earlier of:

a. The last day of its tax year, or

b. The last day of the calendar year in which its tax 

year begins.

2. Its employee-owners substantially perform the services in (1) above. This requirement is met if more than 

20% of the corporation's compensation cost for its activities of performing personal services during the 

testing period is for personal services performed by 

employee-owners.

3. Its employee-owners own more than 10% of the fair 

market value of its outstanding stock on the last day of 

the testing period.

Personal services. Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health (including veterinary services), law, and the performing arts.

Employee-owners. A person is an employee-owner of 

a personal service corporation if both of the following apply.

1. That person is an employee of the corporation or performs personal services for, or on behalf of, the corporation (even if that person is an independent contractor for other purposes) on any day of the testing 

period.

2. That person owns any stock in the corporation at any 

time during the testing period.

Other rules. For other rules that apply to personal 

service corporations, see Accounting Periods, later.

Closely held corporations. A corporation is closely held 

if all of the following apply.

1. It is not a personal service corporation.

2. At any time during the last half of the tax year, more 

than 50% of the value of its outstanding stock is, directly or indirectly, owned by or for five or fewer individuals. “Individual” includes certain trusts and private 

foundations.

For rules for determining stock ownership, see section 544 

of the Internal Revenue Code.

Other rules. For the at-risk rules that apply to closely 

held corporations, see At-Risk Limits, later.

Property Exchanged for Stock

If you transfer property (or money and property) to a corporation in exchange for stock in that corporation (other 

than nonqualified preferred stock), and immediately afterward you are in control of the corporation, the exchange is 

usually not taxable. This rule applies both to individuals 

and to groups who transfer property to a corporation. It 

also applies whether the corporation is being formed or is 

already operating. It does not apply in the following situations.

• The corporation is an investment company.

• You transfer the property in a bankruptcy or similar 

proceeding in exchange for stock used to pay creditors.

• The stock is received in exchange for the corporation's 

debt (other than a security) or for interest on the corporation's debt (including a security) that accrued 

while you held the debt.

See Property Exchanged for Stock in chapter 2 of Pub. 

544 for more information.

Publication 542 (1-2024) 3
Both the corporation and any person involved in a 

nontaxable exchange of property for stock must 

attach to their income tax returns for the year of 

the exchange, the complete statement of all facts pertinent to the exchange required by Treasury Regulations 

section 1.351-3.

Control of a corporation. To be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote 

and at least 80% of the outstanding shares of each class 

of nonvoting stock.

Loss on exchange. If you have a loss from an exchange 

and own, directly or indirectly, more than 50% of the corporation's stock, you cannot deduct the loss. For more information, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Pub. 

544.

Basis of stock or other property received. The basis 

of the stock you receive is generally the adjusted basis of 

the property you transfer. Increase this amount by any 

amount treated as a dividend, plus any gain recognized 

on the exchange. Decrease this amount by any cash you 

received, the fair market value of any other property you 

received, and any loss recognized on the exchange. Also 

decrease this amount by the amount of any liability the 

corporation or another party to the exchange assumed 

from you, unless payment of the liability gives rise to a deduction when paid.

Further decreases may be required when the corporation or another party to the exchange assumes from you a 

liability that gives rise to a deduction when paid, if the basis of the stock would otherwise be higher than its fair 

market value on the date of the exchange. This rule does 

not apply if the entity assuming the liability acquired either 

substantially all of the assets or the trade or business with 

which the liability is associated.

The basis of any other property you receive is its fair 

market value on the date of the trade.

Basis of property transferred. A corporation that receives property from you in exchange for its stock generally has the same basis you had in the property, increased 

by any gain you recognized on the exchange. However, 

the increase for the gain recognized may be limited. For 

more information, see section 362 of the Internal Revenue 

Code.

If property is transferred to a corporation subject to section 362(e)(2) of the Internal Revenue Code, the transferor 

and the acquiring corporation may elect, under section 

362(e)(2)(C), to reduce the transferor's basis in the stock 

received instead of reducing the acquiring corporation's 

basis in the property transferred. Once made, the election 

is irrevocable. For more information, see section 362(e)(2) 

and Treasury Regulations section 1.362-4. If an election is 

made, a statement must be filed in accordance with Treasury Regulations section 1.362-4(d)(3).

CAUTION

!

Capital Contributions

This section explains the tax treatment of contributions 

from shareholders and nonshareholders.

Paid-in capital. Generally, contributions to the capital of 

a corporation, whether or not by shareholders, are paid-in 

capital. These contributions are not taxable to the corporation. However, after December 22, 2017, the following 

nonshareholder contributions to the capital of a corporation are not considered nontaxable paid-in capital.

• Any contribution in aid of construction or any other 

contribution as a customer or potential customer.

• Any contribution by any civic group.

• Any contribution by any governmental entity. However, 

see the special rule below.

For contributions made after December 31, 2020, a 

special rule applies to contributions to the capital of water 

and sewerage disposal utilities. Under the special rule, 

any amount of money or property received after December 31, 2020, as a contribution in aid of construction or a 

contribution to the capital of a regulated public utility that 

provides water or sewerage disposal services is eligible 

for exclusion from income under section 118 of the Internal Revenue Code.

Basis. The corporation's basis of property contributed to 

capital by a shareholder is the same as the basis the 

shareholder had in the property, increased by any gain the 

shareholder recognized on the exchange. However, the increase for the gain recognized may be limited. For more 

information, see Basis of property transferred above and 

section 362 of the Internal Revenue Code.

The basis of property contributed to capital by a person 

other than a shareholder is zero.

If a corporation receives a cash contribution from a person other than a shareholder, the corporation must reduce 

the basis of any property acquired with the contribution 

during the 12-month period beginning on the day it received the contribution by the amount of the contribution. 

If the amount contributed is more than the cost of the 

property acquired, then reduce, but not below zero, the 

basis of the other properties held by the corporation on 

the last day of the 12-month period in the following order.

1. Depreciable property.

2. Amortizable property.

3. Property subject to cost depletion but not to percentage depletion.

4. All other remaining properties.

Reduce the basis of property in each category to zero 

before going on to the next category.

There may be more than one piece of property in each 

category. Base the reduction of the basis of each property 

on the following ratio.

4 Publication 542 (1-2024)
Basis of each piece of property

Bases of all properties (within that category)

If the corporation wishes to make this adjustment in some 

other way, it must get IRS approval. The corporation files a 

request for approval with its income tax return for the tax 

year in which it receives the contribution.

Filing and Paying Income 

Taxes

The federal income tax is a pay-as-you-go tax. A corporation must generally make estimated tax payments as it 

earns or receives income during its tax year. After the end 

of the year, the corporation must file an income tax return. 

This section will help you determine when and how to pay 

and file corporate income taxes.

For certain corporations affected by federally declared disasters such as hurricanes, the due 

dates for filing returns, paying taxes, and performing other time-sensitive acts may be extended. The IRS 

may also forgive the interest and penalties on any underpaid tax for the length of any extension. For more information, visit IRS.gov/DisasterTaxRelief.

Income Tax Return

This section will help you determine when and how to report a corporation's income tax.

Who must file. Unless exempt under section 501 of the 

Internal Revenue Code, all domestic corporations in existence for any part of a tax year (including corporations in 

bankruptcy) must file an income tax return whether or not 

they have taxable income.

Which form to file. A domestic entity electing to be classified as an association taxable as a corporation must 

generally file Form 1120, U.S. Corporation Income Tax Return, to report its income, gains, losses, deductions, credits, and to figure its income tax liability. Certain organizations and entities must, or may elect to, file special returns. 

For more information, see Special Returns for Certain Organizations in the Instructions for Form 1120.

Electronic filing. Corporations can generally electronically file (e-file) Form 1120 and certain related forms, 

schedules, and attachments. However, for returns filed on 

or after January 1, 2024, corporations that file 10 or more 

returns are required to efile. However, these corporations 

can request a waiver of the electronic filing requirements. 

For more information on electronic filing, see the Instructions for Form 1120, or the applicable instructions for your 

income tax return.

When to file. Generally, a corporation must file its income tax return by the 15th day of the 4th month after the 

end of its tax year. A new corporation filing a short-period 

TIP

return must generally file by the 15th day of the 4th month 

after the short period ends. A corporation that has dissolved must generally file by the 15th day of the 4th month 

after the date it dissolved.

However, a corporation with a fiscal tax year ending 

June 30 must file by the 15th day of the 3rd month after 

the end of its tax year. A corporation with a short tax year 

ending anytime in June will be treated as if the short period ended June 30 and must file by the 15th day of the 

3rd month after the end of its tax year.

If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day.

Extension of time to file. File Form 7004, Application 

for Automatic Extension of Time To File Certain Business 

Income Tax, Information, and Other Returns, to request an 

extension of time to file a corporation’s income tax return. 

The IRS will grant the extension if the corporation completes the form properly, files it, and pays any tax due by 

the original due date for the return.

Form 7004 does not extend the time for paying the tax 

due on the return. Interest, and possibly penalties, will be 

charged on any part of the final tax due not shown as a 

balance due on Form 7004. The interest is figured from 

the original due date of the return to the date of payment.

For more information, see the Instructions for Form 

7004.

How to pay your taxes. A corporation must pay its tax 

due in full no later than the due date for filing its tax return 

(not including extensions).

Electronic Federal Tax Payment System (EFTPS). 

Corporations must generally use EFTPS to make deposits 

of all tax liabilities (including social security, Medicare, 

withheld income, excise, and corporate income taxes). For 

more information on EFTPS and enrollment, visit 

www.eftps.gov.

Penalties

Generally, if the corporation receives a notice 

about interest and penalties after it files its return, 

send the IRS an explanation and we will determine if the corporation meets reasonable-cause criteria. 

Do not attach an explanation when the corporation's return is filed. See the instructions for your income tax return.

Late filing of return. A corporation that does not file its 

tax return by the due date, including extensions, may be 

penalized 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. If the corporation is charged a penalty for late 

payment of tax (discussed next) for the same period of 

time, the penalty for late filing is reduced by the amount of 

the penalty for late payment. A minimum penalty applies 

for a return that is over 60 days late. The minimum penalty 

amount may be adjusted for inflation. See the Instructions 

for Form 1120 (or the instructions for your applicable return) for the minimum penalty amount for the current tax 

year. The penalty will not be imposed if the corporation 

CAUTION

!

Publication 542 (1-2024) 5
can show the failure to file on time was due to a reasonable cause.

Note. If the corporation is charged a penalty for late 

payment of tax (discussed next) for the same period of 

time, the penalty for late filing is reduced by the amount of 

the penalty for late payment.

Late payment of tax. A corporation that does not pay 

the tax when due may be penalized half of 1% of the unpaid tax for each month or part of a month the tax is not 

paid, up to a maximum of 25% of the unpaid tax. The penalty will not be imposed if the corporation can show that 

the failure to pay on time was due to a reasonable cause.

Trust fund recovery penalty. If federal income, social 

security, or Medicare taxes that a corporation must withhold from employee wages are not withheld or are not deposited or paid to the U.S. Treasury, the trust fund recovery penalty may apply. The penalty is the full amount of 

the unpaid trust fund tax. This penalty may apply to you if 

these unpaid taxes cannot be immediately collected from 

the business.

The trust fund recovery penalty may be imposed on all 

persons who are determined by the IRS to be responsible 

for collecting, accounting for, and paying these taxes, and 

who acted willfully in not doing so.

A responsible person can be an officer or employee of 

a corporation, an accountant, or a volunteer director/

trustee. A responsible person may also include one who 

signs checks for the corporation or otherwise has authority 

to cause the spending of business funds.

“Willfully” means voluntarily, consciously, and intentionally. A responsible person acts willfully if the person knows 

the required actions are not taking place or recklessly disregards obvious and known risks to the government’s right 

to receive trust fund taxes.

For more information on withholding and paying these 

taxes, see Pub. 15 (Circular E), Employer's Tax Guide.

Other penalties. Other penalties can be imposed for 

negligence, substantial understatement of tax, reportable 

transaction understatements, and fraud. See sections 

6662, 6662A, and 6663 of the Internal Revenue Code.

Estimated Tax

Generally, a corporation must make installment payments 

if it expects its estimated tax for the year to be $500 or 

more. If the corporation does not pay the installments 

when they are due, it could be subject to an underpayment penalty. This section will explain how to avoid this 

penalty.

When to pay estimated tax. Installment payments are 

due by the 15th day of the 4th, 6th, 9th, and 12th months 

of the corporation's tax year.

Example 1. Your corporation's tax year ends December 31. Installment payments are due on April 15, June 

15, September 15, and December 15.

Example 2. Your corporation's tax year ends June 30. 

Installment payments are due on October 15, December 

15, March 15, and June 15.

If any due date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next business day.

How to figure each required installment. The Estimated Tax Worksheet, later, can be used to figure each required installment. Form 1120-W, Estimated Tax for Corporations, is now historical. Prior versions are available on 

IRS.gov

You generally use one of the following two methods to 

figure each required installment. You should use the 

method that yields the smallest installment payments. In 

these discussions, “return” generally refers to the corporation's original return. However, an amended return is considered the original return if it is filed by the due date (including extensions) of the original return.

Method 1. Each required installment is 25% of the income tax the corporation will show on its return for the current year.

Method 2. Each required installment is 25% of the income tax shown on the corporation's return for the previous year.

To use Method 2:

1. The corporation must have filed a return for the previous year,

2. The return must have been for a full 12 months, and

3. The return must have shown a positive tax liability (not 

zero).

Also, if the corporation is a large corporation, it can use 

Method 2 to figure the first installment only.

Large corporations. A large corporation is a corporation 

that had, or whose predecessor had, taxable income of $1 

million or more for any of the 3 tax years immediately preceding the current tax year, or if less, the number of years 

the corporation has been in existence. For this purpose, 

taxable income is modified to exclude net operating loss 

and capital loss carrybacks or carryovers.

Annualized income installment method and/or adjusted seasonal installment method. If the corporation's 

income is expected to vary during the year because, for 

example, it operates its business on a seasonal basis, it 

may be able to lower the amount of one or more required 

installments by using the annualized income installment 

method and/or the adjusted seasonal installment method. 

For example, a ski shop, which receives most of its income during the winter months, may be able to benefit 

from using one or both of these methods in figuring one or 

more of its required installments. See sections 6655(e)(2) 

and 6655(e)(3) of the Internal Revenue Code.

Refiguring required installments. If after the corporation figures and deposits its estimated tax it finds that its 

tax liability for the year will be more or less than originally 

estimated, it may have to refigure its required installments 

to see if an underpayment penalty may apply. An 

6 Publication 542 (1-2024)
immediate catch-up payment should be made to reduce 

any penalty resulting from the underpayment of any earlier 

installments.

Underpayment penalty. If the corporation does not pay 

a required installment of estimated tax by its due date, it 

may be subject to a penalty. The penalty is figured separately for each installment due date. Therefore, the corporation may owe a penalty for an earlier due date, even if it 

paid enough tax later to make up the underpayment. This 

is true even if the corporation is due a refund when its return is filed.

Form 2220. Use Form 2220, Underpayment of Estimated Tax by Corporations, to determine if a corporation 

is subject to the penalty for underpayment of estimated 

tax and to figure the amount of the penalty.

If the corporation is charged a penalty, the amount of 

the penalty depends on the following three factors.

1. The amount of the underpayment.

2. The period during which the underpayment was due 

and unpaid.

3. The interest rate for underpayments published quarterly by the IRS in the Internal Revenue Bulletin.

A corporation generally does not have to file Form 2220 

with its income tax return because the IRS will figure any 

penalty and bill the corporation. However, even if the corporation does not owe a penalty, complete and attach the 

form to the corporation's tax return if any of the following 

apply.

1. The annualized income installment method was used 

to figure any required installment.

2. The adjusted seasonal installment method was used 

to figure any required installment.

3. The corporation is a large corporation figuring its first 

required installment based on the prior year's tax.

How to pay estimated tax. A corporation is generally required to use EFTPS to pay its taxes. See Electronic Federal Tax Payment System (EFTPS), earlier.

Quick refund of overpayments. A corporation that has 

overpaid its estimated tax for the tax year may be able to 

apply for a quick refund. Use Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated 

Tax, to apply for a quick refund of an overpayment of estimated tax. A corporation can apply for a quick refund if the 

overpayment is:

• At least 10% of its expected tax liability, and

• At least $500.

Use Form 4466 to figure the corporation's expected tax liability and the overpayment of estimated tax.

File Form 4466 after the end of the corporation’s tax 

year, but before the corporation files its income tax return. 

Do not file Form 4466 before the end of the corporation's 

tax year. An extension of time to file the corporation's income tax return will not extend the time for filing Form 

4466. The IRS will act on the form within 45 days from the 

date you file it.

U.S. Real Property Interest

If a domestic corporation acquires a U.S. real property interest from a foreign person or firm, the corporation may 

have to withhold tax on the amount it pays for the property. 

The amount paid includes cash, the fair market value of 

other property, and any assumed liability. If a domestic 

corporation distributes a U.S. real property interest to a 

foreign person or firm, it may have to withhold tax on the 

Estimated Tax Worksheet Keep for Your Records

Note. This worksheet may be used as a guide in figuring the required estimated tax installments. 

1. Enter the expected taxable income ............................................................. 1.

2. Multiply line 1 by the maximum tax rate that is in effect for the applicable tax year. For example, in 2023 the maximum 

rate is 21%. ............................................................................. 2.

3. Tax credits. For information on tax credits the corporation can take, see the instructions for Form 1120, Schedule J, 

Part I, lines 5a through 5e, or the instructions for the applicable lines and schedule of the corporation’s income tax 

return .................................................................................. 3.

4. Subtract line 3 from line 2 .................................................................... 4.

5. Other taxes. For information on other taxes the corporation may owe, see the instructions for Form 1120, Schedule J, 

or the instructions for the applicable lines and schedule of the corporation's income tax return .................. 5.

6. Total tax. Add lines 4 and 5 .................................................................. 6.

7. Enter any credit for federal tax paid on fuels and other refundable credits. For information on other refundable credits, 

see the instructions for Form 1120, Schedule J, or the instructions for the applicable line of the corporation’s income tax 

return .................................................................................. 7.

8. Subtract line 7 from line 6. If the result is less than $500, the corporation is not required to make estimated tax 

payments ............................................................................... 8.

9. Enter the tax shown on the corporation’s prior year’s tax return. If the tax is zero or the tax year was for less than 12 

months, skip this line and enter the amount from line 8 on line 10 ....................................... 9.

10. Enter the smaller of line 8 or line 9. If the corporation is required to skip line 9, enter the amount from line 8 ........ 10.

11. Required installments. Enter 25% of line 10. If the corporation uses the annualized income installment method, or 

adjusted seasonal installment method, or is a large corporation, an additional computation may be needed ....... 11.

Publication 542 (1-2024) 7
fair market value of the property. A corporation that fails to 

withhold may be liable for the tax and any penalties and 

interest that apply. For more information, see section 1445 

of the Internal Revenue Code; Pub. 515, Withholding of 

Tax on Nonresident Aliens and Foreign Entities; Form 

8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests; and Form 

8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests.

Accounting Methods

An accounting method is a set of rules used to determine 

when and how income and expenses are reported. Taxable income should be determined using the method of accounting regularly used in keeping the corporation's books 

and records. In all cases, the method used must clearly 

show taxable income.

Generally, permissible methods include:

• Cash,

• Accrual, or

• Any other method authorized by the Internal Revenue 

Code.

Accrual method. Generally, a corporation, other than a 

qualified personal service corporation (as defined in section 448(d)(2) of the Internal Revenue Code), must use an 

accrual method of accounting if it is not a small business 

taxpayer (as defined in section 448(c) of the Internal Revenue Code). A corporation engaged in farming operations 

must also use an accrual method, unless it qualifies as a 

small business taxpayer.

Under an accrual method of accounting, you generally 

report income in the year it is earned and deduct or capitalize expenses in the year incurred. The purpose of an 

accrual method of accounting is to match income and expenses in the correct year.

See Pub. 538 for additional information and special 

rules.

Expenses. Generally, an accrual basis taxpayer can 

deduct accrued expenses in the tax year when:

1. All events that determine the liability have occurred,

2. The amount of the liability can be figured with reasonable accuracy, and

3. Economic performance takes place with respect to 

the expense.

There are exceptions to the economic performance rule 

for certain items, including recurring expenses. See section 461(h) of the Internal Revenue Code and the related 

regulations for the rules for determining when economic 

performance takes place.

Percentage of completion method. Long-term contracts (except for certain real property construction contracts) must generally be accounted for using the percentage of completion method described in section 460 of the 

Internal Revenue Code.

Mark-to-market accounting method. Generally, dealers in securities must use the mark-to-market accounting 

method described in section 475 of the Internal Revenue 

Code. Under this method, any security held by a dealer as 

inventory must be included in inventory at its fair market 

value. Any security not held as inventory at the close of 

the tax year is treated as sold at its fair market value on 

the last business day of the tax year. Any gain or loss must 

be taken into account in determining gross income. The 

gain or loss taken into account is treated as ordinary gain 

or loss.

Dealers in commodities and traders in securities and 

commodities can elect to use the mark-to-market accounting method.

Change in accounting method. A corporation can 

change its method of accounting used to report taxable income (for income as a whole or for the treatment of any 

material item). The corporation must file Form 3115, Application for Change in Accounting Method. See the Instructions for Form 3115 and Pub. 538 for more information 

and exceptions.

Section 481(a) adjustment. If the corporation's taxable income for the current tax year is figured under a 

method of accounting different from the method used in 

the preceding tax year, the corporation may have to make 

an adjustment under section 481(a) of the Internal Revenue Code to prevent amounts of income or expense from 

being duplicated or omitted. The section 481(a) adjustment period is generally 1 year for a net negative adjustment and 4 years for a net positive adjustment. However, 

exceptions to the general section 481(a) adjustment period may apply. Also, in some cases, a corporation can 

elect to modify the section 481(a) adjustment period. The 

corporation may have to complete the appropriate lines of 

Form 3115 to make an election. See the Instructions for 

Form 3115 for more information and exceptions.

Accounting Periods

A corporation must figure its taxable income on the basis 

of a tax year. A tax year is the annual accounting period a 

corporation uses to keep its records and report its income 

and expenses. Generally, a corporation can use either a 

calendar year or a fiscal year as its tax year. Unless special rules apply, a corporation generally adopts a tax year 

by filing its first federal income tax return using that tax 

year. For more information, see Pub. 538.

Personal service corporation. A personal service corporation must use a calendar year as its tax year unless:

• It elects to use a 52-53-week tax year that ends with 

reference to the calendar year or tax year elected under section 444 of the Internal Revenue Code;

8 Publication 542 (1-2024)
• It can establish a business purpose for a different tax 

year and obtains approval of the IRS (see the 

Instructions for Form 1128 and Pub. 538); or

• It elects under section 444 to have a tax year other 

than a calendar year. Use Form 8716, Election To 

Have a Tax Year Other Than a Required Tax Year, to 

make the election.

If a personal service corporation makes a section 444 

election, its deduction for certain amounts paid to employee-owners may be limited. See Schedule H (Form 

1120), Section 280H Limitations for a Personal Service 

Corporation (PSC), to figure the maximum deduction.

Change of tax year. Generally, a corporation must get 

the consent of the IRS before changing its tax year by filing Form 1128, Application To Adopt, Change, or Retain a 

Tax Year. However, under certain conditions, a corporation 

can change its tax year without getting the consent. For 

more information, see Form 1128 and Pub. 538.

Recordkeeping

A corporation should keep its records for as long as they 

may be needed for the administration of any provision of 

the Internal Revenue Code. Usually records that support 

items of income, deductions, or credits on the return must 

be kept for 3 years from the date the return is due or filed, 

whichever is later. Keep records that verify the corporation's basis in property for as long as they are needed to 

figure the basis of the original or replacement property.

The corporation should keep copies of all filed returns. 

They help in preparing future and amended returns and in 

the calculation of earnings and profits.

Income, Deductions, and 

Special Provisions

Rules on income and deductions that apply to individuals 

also apply, for the most part, to corporations. However, the 

following special provisions apply only to corporations.

Costs of Going Into Business

When you go into business, treat all eligible costs you incur to get your business started as capital expenses. 

However, a corporation can elect to deduct a limited 

amount of start-up or organizational costs. Any costs not 

deducted can be amortized.

Start-up costs are costs for creating an active trade or 

business or investigating the creation or acquisition of an 

active trade or business. Organizational costs are the direct costs of creating the corporation.

For more information on deducting or amortizing 

start-up and organizational costs, see the instructions for 

your income tax return.

Related Persons

A corporation that uses an accrual method of accounting 

cannot deduct business expenses and interest owed to a 

related person who uses the cash method of accounting 

until the corporation makes the payment and the corresponding amount is includible in the related person's 

gross income. Determine the relationship as of the end of 

the tax year for which the expense or interest would otherwise be deductible. If a deduction is denied, the rule will 

continue to apply even if the corporation's relationship with 

the person ends before the expense or interest is includible in the gross income of that person. These rules also 

deny the deduction of losses on the sale or exchange of 

property between related persons.

Related persons. For purposes of this rule, the following 

persons are related to a corporation.

1. Another corporation that is a member of the same 

controlled group (as defined in section 267(f) of the 

Internal Revenue Code).

2. An individual who owns, directly or indirectly, more 

than 50% of the value of the outstanding stock of the 

corporation.

3. A trust fiduciary, if the trust or the grantor of the trust 

owns, directly or indirectly, more than 50% of the 

value of the outstanding stock of the corporation.

4. An S corporation, if the same persons own more than 

50% in value of the outstanding stock of each corporation.

5. A partnership, if the same persons own more than 

50% in value of the outstanding stock of the corporation and more than 50% of the capital or profits interest in the partnership.

6. Any employee-owner, if the corporation is a personal 

service corporation (see Personal service corporation, earlier), regardless of the amount of stock owned 

by the employee-owner.

Ownership of stock. To determine whether an individual directly or indirectly owns any of the outstanding 

stock of a corporation, the following apply.

1. Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, is treated as being 

owned proportionately by or for its shareholders, partners, or beneficiaries.

2. An individual is treated as owning the stock owned, 

directly or indirectly, by or for the individual's family. 

Family includes only brothers and sisters (including 

half brothers and half sisters), a spouse, ancestors, 

and lineal descendants.

3. Any individual owning (other than by applying (2) 

above) stock in a corporation, is treated as also owning the stock owned directly or indirectly by that individual's partner.

4. To apply (1), (2), or (3) above, stock constructively 

owned by a person under (1) is treated as actually 

Publication 542 (1-2024) 9
owned by that person. But stock constructively owned 

by an individual under (2) or (3) is not treated as actually owned by the individual for applying either (2) or 

(3) to make another person the constructive owner of 

that stock.

Reallocation of income and deductions. Where it is 

necessary to clearly show income or prevent tax evasion, 

the IRS can reallocate gross income, deductions, credits, 

or allowances between two or more organizations, trades, 

or businesses owned or controlled directly, or indirectly, by 

the same interests.

Complete liquidations. The disallowance of losses from 

the sale or exchange of property between related persons 

does not apply to liquidating distributions.

More information. For more information about the related person rules, see Pub. 544.

Corporate Preference Items

A corporation must make special adjustments to certain 

items before it takes them into account in determining its 

taxable income. These items are known as “corporate 

preference items” and they include the following.

• Gain on the disposition of section 1250 property. 

For more information, see Section 1250 Property under Depreciation Recapture in chapter 3 of Pub. 544.

• Percentage depletion for iron ore and coal (including lignite).

• Amortization of pollution control facilities. For 

more information, see section 291(a)(4) of the Internal 

Revenue Code.

• Mineral exploration and development costs. 

For more information on corporate preference items, see 

section 291 of the Internal Revenue Code.

Dividends-Received Deduction

A corporation can deduct a percentage of certain dividends received during its tax year. This section discusses 

the general rules that apply. The deduction is figured on 

Form 1120, Schedule C, or the applicable schedule of 

your income tax return. For more information, see the Instructions for Form 1120, or the instructions for your applicable income tax return.

Dividends from foreign corporations. Generally, 100% 

of the foreign-source portion of dividends (and items treated as dividends) from 10%-owned foreign corporations 

may be deducted. The stock with respect to which such 

dividends are received must meet a special 365-day holding period and does not include certain “hybrid” dividend 

payments. See Form 1120, Schedule C (or the applicable 

schedule of your income tax return), for details regarding 

this deduction. Also see the Instructions for Form 1120 or 

the instructions for your applicable income tax return.

Note. This deduction is not subject to the limit on deduction for dividends related to dividends from domestic 

corporations, discussed below.

Dividends from domestic corporations. A corporation 

can deduct, within certain limits, 50% of the dividends received if the corporation receiving the dividend owns less 

than 20% of the corporation distributing the dividend. If 

the corporation owns 20% or more of the distributing corporation's stock, it can, subject to certain limits, deduct 

65% of the dividends received.

Ownership. For these rules, ownership is based on 

the amount of voting power and value of the paying corporation's stock (other than certain preferred stock) that the 

receiving corporation owns.

Small business investment companies. Small business investment companies can deduct 100% of the dividends received from taxable domestic corporations.

Dividends from regulated investment companies. 

Regulated investment company dividends received are 

subject to certain limits. Capital gain dividends received 

from a regulated investment company do not qualify for 

the deduction. For more information, see section 854 of 

the Internal Revenue Code.

No deduction allowed for certain dividends. Corporations cannot take a deduction for dividends received from 

the following entities.

1. A real estate investment trust (REIT).

2. A corporation exempt from tax under section 501 or 

521 of the Internal Revenue Code either for the tax 

year of the distribution or the preceding tax year.

3. A corporation whose stock was held less than 46 days 

during the 91-day period beginning 45 days before the 

stock became ex-dividend with respect to the dividend. “Ex-dividend” means the holder has no rights to 

the dividend.

4. A corporation whose dividends were received on any 

share of preferred stock that are attributable to periods totaling more than 366 days if such stock was 

held for less than 91 days during the 181-day period 

that began 90 days before the ex-dividend date.

5. Any corporation, if your corporation is under an obligation (pursuant to a short sale or otherwise) to make 

related payments with respect to positions in substantially similar or related property.

Dividends on deposits. Dividends on deposits or withdrawable accounts in domestic building and loan associations, mutual savings banks, cooperative banks, and similar organizations are interest, not dividends. They do not 

qualify for this deduction.

Limit on deduction for dividends. The total deduction 

for dividends received or accrued is generally limited (in 

the following order) to:

10 Publication 542 (1-2024)
1. 65% of the difference between taxable income and 

the 100% deduction allowed for dividends received 

from affiliated corporations, or by a small business investment company, for dividends received or accrued 

from 20%-owned corporations; then

2. 50% of the difference between taxable income (reduced by total dividends received from 20%-owned 

corporations) and the 100% deduction allowed for dividends received from affiliated corporations, or by a 

small business investment company, for dividends received or accrued from less-than-20%-owned corporations (reducing taxable income by the total dividends received from 20%-owned corporations).

Figuring the limit. In figuring the limit, determine taxable income without the following items.

1. The net operating loss deduction.

2. The deduction under section 199A for income attributable to domestic production activities of specified agricultural or horticultural cooperatives.

3. The deduction allowed by sections 243(a)(1) and 

245(a) of the Internal Revenue Code.

4. The deduction allowed by section 250 of the Internal 

Revenue Code.

5. Any adjustment due to the nontaxable part of an extraordinary dividend (see Extraordinary Dividends, 

later).

6. Any capital loss carryback to the tax year.

Effect of net operating loss. If a corporation has a 

net operating loss (NOL) for a tax year, the limit of 65% (or 

50%) of taxable income does not apply. To determine 

whether a corporation has an NOL, figure the dividends-received deduction without the 65% (or 50%) of 

taxable income limit.

Example 1. A corporation loses $75,000 from operations. It receives $100,000 in dividends from a 

20%-owned corporation. Its taxable income is $25,000 

($100,000 – $75,000) before the deduction for dividends 

received. If it claims the full dividends-received deduction 

of $65,000 ($100,000 × 65%) and combines it with an operations loss of $75,000, it will have an NOL of ($40,000). 

Therefore, the 65% of taxable income limit does not apply. 

The corporation can deduct the full $65,000.

Example 2. Assume the same facts as in Example 1, 

except that the corporation only loses $30,000 from operations. Its taxable income is $70,000 before the deduction 

for dividends received. After claiming the dividends-received deduction of $65,000 ($100,000 × 65%), its taxable income is $5,000. Because the corporation will not 

have an NOL after applying a full dividends-received deduction, its allowable dividends-received deduction is limited to 65% of its taxable income, or $45,500 ($70,000 × 

65%).

Extraordinary Dividends

If a corporation receives an extraordinary dividend on 

stock held 2 years or less before the dividend announcement date, it must generally reduce its basis in the stock 

by the nontaxed part of the dividend. The nontaxed part is 

any dividends-received deduction allowable for the dividends.

Extraordinary dividend. An extraordinary dividend is 

any dividend on stock that equals or exceeds a certain 

percentage of the corporation's adjusted basis in the 

stock. The percentages are:

1. 5% for stock preferred as to dividends, or

2. 10% for other stock.

Treat all dividends received that have ex-dividend dates 

within an 85-consecutive-day period as one dividend. 

Treat all dividends received that have ex-dividend dates 

within a 365-consecutive-day period as extraordinary dividends if the total of the dividends exceeds 20% of the corporation's adjusted basis in the stock.

Disqualified preferred stock. Any dividend on disqualified preferred stock is treated as an extraordinary dividend 

regardless of the period of time the corporation held the 

stock.

Disqualified preferred stock is any stock preferred as to 

dividends if any of the following apply.

1. The stock when issued has a dividend rate that declines (or can reasonably be expected to decline) in 

the future.

2. The issue price of the stock exceeds its liquidation 

rights or stated redemption price.

3. The stock is otherwise structured to avoid the rules for 

extraordinary dividends and to enable corporate 

shareholders to reduce tax through a combination of 

dividends-received deductions and loss on the disposition of the stock.

More information. For more information on extraordinary 

dividends, see section 1059 of the Internal Revenue 

Code.

Below-Market Loans

If a corporation receives a below-market loan and uses 

the proceeds for its trade or business, it may be able to 

deduct the forgone interest as well as any interest the corporation actually paid or accrued.

A below-market loan is a loan on which no interest is 

charged or on which interest is charged at a rate below the 

applicable federal rate. A below-market loan is generally 

treated as an arm's-length transaction in which the borrower is considered as having received both the following.

• A loan in exchange for a note that requires payment of 

interest at the applicable federal rate.

• An additional payment in an amount equal to the forgone interest.

Publication 542 (1-2024) 11
The borrower treats the additional payment as a gift, dividend, contribution to capital, payment of compensation, or 

other payment, depending on the substance of the transaction.

Foregone interest. For any period, forgone interest is 

equal to:

1. The interest that would be payable for that period if interest accrued on the loan at the applicable federal 

rate and was payable annually on December 31, minus

2. Any interest actually payable on the loan for the period.

More information. For more information on below-market loans, including information on demand loans, gift 

loans, and term loans, see section 7872 of the Internal 

Revenue Code, the related regulations, and chapter 1 of 

Pub. 550, Investment Income and Expenses.

Charitable Contributions

A corporation can claim a limited deduction for charitable 

contributions made in cash or other property. The contribution is deductible if made to, or for the use of, a qualified 

organization. For more information on qualified organizations, see Pub. 526, Charitable Contributions. Also, see 

Tax-Exempt Organization Search at IRS.gov/Charities, the 

online search tool for finding information on organizations 

eligible to receive tax-deductible contributions.

Note. You cannot take a deduction if any of the net 

earnings of an organization receiving contributions benefit 

any private shareholder or individual.

Cash method corporation. A corporation using the 

cash method of accounting deducts contributions in the 

tax year paid.

Accrual method corporation. A corporation using an 

accrual method of accounting can choose to deduct unpaid contributions for the tax year the board of directors 

authorizes them if it pays them by the due date for filing 

the corporation’s tax return (not including extensions). 

Make the choice by reporting the contribution on the corporation's return for the tax year. Attach a declaration stating that the board of directors adopted the resolution during the tax year. The declaration must include the date the 

resolution was adopted.

Limitations on deduction. A corporation cannot deduct 

charitable contributions that exceed 10% of its taxable income for the tax year. Figure taxable income for this purpose without the following.

1. The deduction for charitable contributions.

2. The dividends-received deduction.

3. The deduction allowed under section 249 of the Internal Revenue Code for bond premium.

4. Any deduction for income attributable to domestic 

production activities of specified agricultural or horticultural cooperatives.

5. Any net operating loss carryback to the tax year.

6. Any capital loss carryback to the tax year.

Carryover of excess contributions. You can carry 

over, within certain limits, to each of the subsequent 5 

years any charitable contributions made during the current 

year that exceed the 10% limit. You lose any excess not 

used within that period. Do not deduct a carryover of excess contributions in the carryover year until after you deduct contributions made in that year (subject to the 10% 

limit). You cannot deduct a carryover of excess contributions to the extent it increases a net operating loss carryover.

Farmers, ranchers, or Native Corporations. Corporations that are farmers, ranchers, or Native Corporations, 

see section 170(b)(2) of the Internal Revenue Code for 

special rules that may affect the deduction limit.

Cash contributions. A corporation must maintain a record of any contribution of cash, check, or other monetary 

contribution, regardless of the amount. The record can be 

a bank record, receipt, letter, or other written communication from the donee indicating the name of the organization, the date of the contribution, and the amount of the 

contribution. Keep the record of the contribution with the 

other corporate records. Do not attach the records to the 

corporation's return. For more information on cash contributions, see Pub. 526.

Gifts of $250 or more. Generally, no deduction is allowed for any contribution of $250 or more unless the corporation gets a written acknowledgement from the donee 

organization. The acknowledgement should show the 

amount of cash contributed, a description of the property 

contributed (but not its value), and either gives a description and a good faith estimate of the value of any goods or 

services provided in return for the contribution or states 

that no goods or services were provided in return for the 

contribution. The acknowledgement must be obtained by 

the due date (including extensions) of the return, or, if earlier, the date the return was filed. Keep the acknowledgement with other corporate records. Do not attach the acknowledgement to the return.

Contributions of property other than cash. If a corporation (other than a closely held or a personal service corporation) claims a deduction of more than $500 for contributions of property other than cash, a schedule describing 

the property and the method used to determine its fair 

market value must be attached to the corporation's return. 

In addition, the corporation should keep a record of:

• The approximate date and manner of acquisition of 

the donated property, and

• The cost or other basis of the donated property held 

by the donor for less than 12 months prior to contribution.

12 Publication 542 (1-2024)
Closely held and personal service corporations must 

complete and attach Form 8283, Noncash Charitable 

Contributions, to their returns if they claim a deduction of 

more than $500 for noncash contributions. For all other 

corporations, if the deduction claimed for donated property exceeds $5,000, complete Form 8283 and attach it to 

the corporation's return.

A corporation must obtain a qualified appraisal for all 

deductions of property claimed in excess of $5,000. A 

qualified appraisal is not required for the donation of cash, 

publicly traded securities, inventory, and any qualified vehicles sold by a donee organization without any significant 

intervening use or material improvement. The appraisal 

should be maintained with other corporate records and 

only attached to the corporation's return when the deduction claimed exceeds $500,000 ($20,000 for donated art 

work).

See Form 8283 for more information.

Qualified conservation contributions. If a corporation makes a qualified conservation contribution, the corporation must provide information regarding the legal interest being donated, the fair market value of the 

underlying property before and after the donation, and a 

description of the conservation purpose for which the 

property will be used. For more information, see section 

170(h) of the Internal Revenue Code.

Contributions of used vehicles. A corporation is allowed a deduction for the contribution of used motor vehicles, boats, and airplanes. The deduction is limited, and 

other special rules apply. For more information, see Pub. 

526.

Reduction for contributions of certain property. 

For a charitable contribution of property, the corporation 

must reduce the contribution by the sum of:

• The ordinary income and short-term capital gain that 

would have resulted if the property were sold at its fair 

market value; and

• For certain contributions, the long-term capital gain 

that would have resulted if the property were sold at its 

fair market value.

The reduction for the long-term capital gain applies to:

• Contributions of tangible personal property for use by 

an exempt organization for a purpose or function unrelated to the basis for its exemption;

• Contributions of any property to or for the use of certain private foundations except for stock for which market quotations are readily available; and

• Contributions of any patent, certain copyrights, trademark, trade name, trade secret, know-how, software 

(that is a section 197 intangible), or similar property, or 

applications or registrations of such property.

Larger deduction. A corporation (other than an S corporation) may be able to claim a deduction equal to the 

lesser of (a) the basis of the donated inventory or property 

plus half of the inventory’s or property's appreciation (gain 

if the donated inventory or property was sold at fair market 

value on the date of the donation), or (b) two times basis 

of the donated inventory or property. This deduction may 

be allowed for certain contributions of the following.

• Certain inventory and other property made to a donee 

organization and used solely for the care of the ill, the 

needy, and infants. Special rules apply to qualified 

contributions of “apparently wholesome food” (see 

section 170(e)(3)(C) of the Internal Revenue Code).

• Scientific property constructed by the corporation 

(other than an S corporation, personal holding company, or personal service corporation) and donated no 

later than 2 years after substantial completion of the 

construction. The property must be donated to a qualified organization and its original use must be by the 

donee for research, experimentation, or research 

training within the United States in the area of physical 

or biological science.

Contributions to organizations conducting lobbying 

activities. Contributions made to an organization that 

conducts lobbying activities are not deductible if:

• The lobbying activities relate to matters of direct financial interest to the donor's trade or business, and

• The principal purpose of the contribution was to avoid 

federal income tax by obtaining a deduction for activities that would have been nondeductible under the 

lobbying expense rules if conducted directly by the donor.

More information. For more information on charitable 

contributions, including substantiation and recordkeeping 

requirements, see section 170 of the Internal Revenue 

Code, the related regulations, and Pub. 526.

Capital Losses

A corporation can deduct capital losses only up to the 

amount of its capital gains. In other words, if a corporation 

has an excess capital loss, it cannot deduct the loss in the 

current tax year. Instead, it carries the loss to other tax 

years and deducts it from any net capital gains that occur 

in those years.

A capital loss is carried to other years in the following 

order.

1. 3 years prior to the loss year.

2. 2 years prior to the loss year.

3. 1 year prior to the loss year.

4. Any loss remaining is carried forward for 5 years.

When you carry a net capital loss to another tax year, treat 

it as a short-term loss. It does not retain its original identity 

as long term or short term.

Example. A calendar year corporation has a net 

short-term capital gain of $3,000 and a net long-term capital loss of $9,000. The short-term gain offsets some of the 

long-term loss, leaving a net capital loss of $6,000. The 

corporation treats this $6,000 as a short-term loss when 

carried back or forward.

Publication 542 (1-2024) 13
The corporation carries the $6,000 short-term loss 

back 3 years. In year 1, the corporation had a net 

short-term capital gain of $8,000 and a net long-term capital gain of $5,000. It subtracts the $6,000 short-term loss 

first from the net short-term gain. This results in a net capital gain for year 1 of $7,000. This consists of a net 

short-term capital gain of $2,000 ($8,000 − $6,000) and a 

net long-term capital gain of $5,000.

S corporation status. A corporation may not carry a 

capital loss from, or to, a year for which it is an S corporation.

Rules for carryover and carryback. When carrying a 

capital loss from 1 year to another, the following rules apply.

• When figuring the current year's net capital loss, you 

cannot combine it with a capital loss carried from another year. In other words, you can carry capital losses 

only to years that would otherwise have a total net 

capital gain.

• If you carry capital losses from 2 or more years to the 

same year, deduct the loss from the earliest year first.

• You cannot use a capital loss carried from another 

year to produce or increase a net operating loss in the 

year to which you carry it back.

Refunds. When you carry back a capital loss to an earlier 

tax year, refigure your tax for that year. If your corrected 

tax is less than the tax you originally owed, use either 

Form 1139, Corporate Application for Tentative Refund, or 

Form 1120X, Amended U.S. Corporation Income Tax Return, to apply for a refund.

Form 1139. A corporation can get a refund faster by 

using Form 1139. It cannot file Form 1139 before filing the 

return for the corporation's capital loss year, but it must file 

Form 1139 no later than 1 year after the year it sustains 

the capital loss.

Form 1120X. If the corporation does not file Form 

1139, it must file Form 1120X to apply for a refund. The 

corporation must file the Form 1120X within 3 years of the 

due date, including extensions, for filing the return for the 

year in which it sustains the capital loss.

Net Operating Losses

A corporation generally figures and deducts a net operating loss (NOL) the same way an individual, estate, or trust 

does. For more information on these general rules, including the sequencing rule for when the corporation carries 

two of more NOLs to the same year, see Pub. 536, Net 

Operating Losses (NOLs) for Individuals, Estates, and 

Trusts.

A corporation's NOL generally differs from individual, 

estate, and trust NOLs in the following ways.

1. A corporation can take different deductions when figuring an NOL.

2. A corporation must make different modifications to its 

taxable income in the carryback or carryforward year 

when figuring how much of the NOL is used and how 

much is carried over to the next year.

3. A corporation uses different forms when claiming an 

NOL deduction.

4. A corporation is not subject to section 461, which limits the amount of losses from the trades or businesses 

of noncorporate taxpayers.

For more information, including how to figure the NOL 

deduction for the current tax year and any carryback or 

carryforward, see the Instructions for Form 1139, and the 

instructions for the corporation's tax return.

At-Risk Limits

The at-risk rules limit your losses from most activities to 

your amount at risk in the activity. The at-risk limits apply 

to certain closely held corporations (other than S corporations).

The amount at risk generally equals:

• The money and the adjusted basis of property contributed by the taxpayer to the activity, and

• The money borrowed for the activity.

Closely held corporation. For the at-risk rules, a corporation is a closely held corporation if, at any time during 

the last half of the tax year, more than 50% in value of its 

outstanding stock is owned directly or indirectly by, or for, 

five or fewer individuals.

To figure if more than 50% in value of the stock is 

owned by five or fewer individuals, apply the following 

rules.

1. Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust is considered owned 

proportionately by its shareholders, partners, or beneficiaries.

2. An individual is considered to own the stock owned, 

directly or indirectly, by or for their family. Family includes only brothers and sisters (including half brothers and half sisters), a spouse, ancestors, and lineal 

descendants.

3. If a person holds an option to buy stock, they are considered to be the owner of that stock.

4. When applying (1) or (2) above, stock considered 

owned by a person under (1) or (3) above is treated 

as actually owned by that person. Stock considered 

owned by an individual under (2) is not treated as 

owned by the individual for again applying (2) to consider another the owner of that stock.

5. Stock that may be considered owned by an individual 

under either (2) or (3) above is considered owned by 

the individual under (3).

More information. For more information on the at-risk 

limits, see Pub. 925, Passive Activity and At-Risk Rules.

14 Publication 542 (1-2024)
Passive Activity Limits

The passive activity rules generally limit your losses from 

passive activities to your passive activity income. Generally, you are in a passive activity if you have a trade or 

business activity in which you do not materially participate 

during the tax year, or you have a rental activity.

The passive activity rules apply to personal service corporations and closely held corporations other than S corporations.

Corporations subject to the passive activity limitations 

must complete Form 8810. For more information on the 

passive activity limits, see the Instructions for Form 8810 

and Pub. 925.

Figuring Tax

After you figure a corporation's taxable income, you figure 

its tax. This section discusses the tax rates, credits, and 

recapture taxes.

Tax Rates

Corporations, including qualified personal service corporations, figure their tax by multiplying taxable income by 

21% (0.21). If the corporation is a member of a controlled 

group, the corporation must also complete Schedule O 

(Form 1120), Consent Plan and Apportionment Schedule 

for a Controlled Group, to report the apportionment of certain tax benefits between the members of the group. See 

Schedule O (Form 1120) and the Instructions for Schedule O (Form 1120) for more information.

Base Erosion Minimum Tax

If a corporation has gross receipts of at least $500 million 

in any 1 of the 3 tax years preceding the current tax year, a 

tax equal to the base erosion minimum tax amount for the 

tax year may be imposed. This tax is reported using Form 

8991. See the Instructions for Form 8991 for additional information.

Corporate Alternative Minimum Tax 

(CAMT)

For tax years beginning after 2022, section 55 of the Internal Revenue Code imposes a new corporate alternative 

minimum tax (CAMT) based on the adjusted financial 

statement income of an applicable corporation. Unless a 

filing exclusion applies, a corporation must use Form 

4626, Alternative Minimum Tax—Corporations, to determine whether it is an applicable corporation, and if classified as an applicable corporation, to calculate CAMT. See 

Form 4626 and the Instructions for Form 4626. Also, see 

the Instructions for Form 1120 or the instructions for the 

applicable corporation's tax return.

Note. For tax year 2023 for purposes of figuring any 

penalty for underpayment of tax, applicable corporations 

may exclude the CAMT tax liability when calculating the 

required annual tax payment on Form 2220. See the instructions for the 2023 Form 2220.

Credits

A corporation's tax liability is reduced by allowable credits. 

The following list includes some of the credits available to 

corporations.

• Foreign tax credit (see Form 1118).

• Any qualified electric vehicle passive activity credit 

from prior years allowed for the current year from Form 

8834. See Form 8810, Corporate Passive Activity 

Loss and Credit Limitations, to see if a credit is allowed for the current year for personal service corporations and closely held corporations.

• General business credit (see Form 3800 and the Instructions for Form 3800).

• Credit for prior year minimum tax, if applicable (see 

Form 8827).

• Bond credits (see Form 8912).

• Refundable credits. See the instructions for the corporation's income tax return for a list of refundable credits that may be allowed for the current tax year.

Recapture Taxes

A corporation's tax liability is increased if it recaptures 

credits it has taken in prior years. The following list includes some credits a corporation may need to recapture.

• Investment credit (see the Instructions for Form 4255).

• Low-income housing credit (see the Instructions for 

Form 8611).

• New markets credit (see the Instructions for Form 

8874).

• Employer-provided childcare facilities and services 

credit (see the Instructions for Form 8882).

• Indian employment credit (see the Instructions for 

Form 8845).

See the Instructions for Form 3800 for additional credits 

that may be subject to recapture. Also see the instructions 

for the corporation's tax return.

Accumulated Earnings Tax

A corporation can accumulate its earnings for a possible 

expansion or other bona fide business reasons. However, 

if a corporation allows earnings to accumulate beyond the 

reasonable needs of the business, it may be subject to an 

accumulated earnings tax of 20%. If the accumulated 

earnings tax applies, interest applies to the tax from the 

date the corporate return was originally due, without extensions.

To determine if the corporation is subject to this tax, first 

treat an accumulation of $250,000 or less generally as 

Publication 542 (1-2024) 15
within the reasonable needs of most businesses. Treat an 

accumulation of $150,000 or less as within the reasonable 

needs of a business whose principal function is performing services in the fields of accounting, actuarial science, 

architecture, consulting, engineering, health (including 

veterinary services), law, and the performing arts.

In determining if the corporation has accumulated earnings and profits beyond its reasonable needs, value the 

listed and readily marketable securities owned by the corporation and purchased with its earnings and profits at net 

liquidation value, not at cost.

Reasonable needs of the business include the following.

• Specific, definite, and feasible plans for use of the 

earnings accumulation in the business.

• The amount necessary to redeem the corporation's 

stock included in a deceased shareholder's gross estate, if the amount does not exceed the reasonably anticipated total estate and inheritance taxes and funeral 

and administration expenses incurred by the shareholder's estate.

The absence of a bona fide business reason for a corporation's accumulated earnings may be indicated by 

many different circumstances, such as a lack of regular 

distributions to its shareholders or withdrawals by the 

shareholders classified as personal loans. However, actual moves to expand the business generally qualify as a 

bona fide use of the accumulations.

The fact that a corporation has an unreasonable accumulation of earnings is sufficient to establish liability for 

the accumulated earnings tax unless the corporation can 

show the earnings were not accumulated to allow its individual shareholders to avoid income tax.

Distributions to Shareholders

This section discusses corporate distributions of money, 

stock, or other property to a shareholder with respect to 

the shareholder's ownership of stock. However, this section does not discuss the special rules that apply to the 

following distributions. See the applicable sections of the 

Internal Revenue Code.

• Distributions in redemption of stock (section 302).

• Distributions in complete liquidation of the corporation 

(sections 331 through 346).

• Distributions in corporate organizations (section 351). 

Also, see Property Exchanged for Stock, earlier.

• Distributions in corporate reorganizations (sections 

354 through 368).

• Certain distributions to 20% corporate shareholders 

(section 301(e)).

Money or Property Distributions

Most distributions are in money, but they may also be in 

stock or other property. For this purpose, “property” generally does not include stock in the corporation or rights to 

acquire this stock. However, see Distributions of Stock or 

Stock Rights, later.

A corporation generally does not recognize a gain or 

loss on the distributions covered by the rules in this section. However, see Gain from property distributions, later.

Amount distributed. The amount of a distribution is generally the amount of any money paid to the shareholder 

plus the fair market value (FMV) of any property transferred to the shareholder. However, this amount is reduced 

(but not below zero) by the following liabilities.

• Any liability of the corporation the shareholder assumes in connection with the distribution.

• Any liability to which the property is subject immediately before, and immediately after, the distribution.

The FMV of any property distributed to a shareholder becomes the shareholder's basis in that property.

Gain from property distributions. A corporation will 

recognize a gain on the distribution of property to a shareholder if the FMV of the property is more than its adjusted 

basis. This is generally the same treatment the corporation would receive if the property were sold. However, for 

this purpose, the FMV of the property is the greater of the 

following amounts.

• The actual FMV.

• The amount of any liabilities the shareholder assumed 

in connection with the distribution of the property.

If the property was depreciable or amortizable, the corporation may have to treat all or part of the gain as ordinary income from depreciation recapture. For more information on depreciation recapture and the sale of business 

property, see Pub. 544.

Distributions of Stock or Stock Rights

Distributions by a corporation of its own stock are commonly known as “stock dividends.” Stock rights (also 

known as “stock options”) are distributions by a corporation of rights to acquire its stock. Distributions of stock dividends and stock rights are generally tax free to shareholders. However, if any of the following apply to their 

distribution, stock and stock rights are treated as property, 

as discussed under Money or Property Distributions, earlier.

1. Any shareholder has the choice to receive cash or 

other property instead of stock or stock rights.

2. The distribution gives cash or other property to some 

shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits 

to other shareholders.

16 Publication 542 (1-2024)
3. The distribution is in convertible preferred stock and 

has the same result as in (2).

4. The distribution gives preferred stock to some common stock shareholders and gives common stock to 

other common stock shareholders.

5. The distribution is on preferred stock. (An increase in 

the conversion ratio of convertible preferred stock 

made solely to take into account a stock dividend, 

stock split, or similar event that would otherwise result 

in reducing the conversion right is not a distribution on 

preferred stock.)

The term “stock” includes rights to acquire stock and the 

term “shareholder” includes a holder of rights or convertible securities.

Constructive stock distributions. You must treat certain transactions that increase a shareholder's proportionate interest in the earnings and profits or assets of a corporation as if they were distributions of stock or stock 

rights. These constructive distributions are treated as 

property if they have the same result as a distribution described in (2), (3), (4), or (5) above. Constructive distributions are described later.

This treatment applies to a change in your stock's conversion ratio or redemption price, a difference between 

your stock's redemption price and issue price, a redemption that is not treated as a sale or exchange of your stock, 

and any other transaction having a similar effect on a 

shareholder's interest in the corporation.

Expenses of issuing a stock dividend. You cannot deduct the expenses of issuing a stock dividend. These expenses include printing, postage, cost of advice sheets, 

fees paid to transfer agents, and fees for listing on stock 

exchanges. The corporation must capitalize these costs.

Constructive Distributions

The following sections discuss transactions that may be 

treated as distributions.

Below-market loans. If a corporation gives a shareholder a loan on which no interest is charged or on which 

interest is charged at a rate below the applicable federal 

rate, the interest not charged may be treated as a distribution to the shareholder. For more information, see Below-Market Loans, earlier.

Corporation cancels shareholder's debt. If a corporation cancels a shareholder's debt without repayment by 

the shareholder, the amount canceled is treated as a distribution to the shareholder.

Transfers of property to shareholders for less than 

FMV. A sale or exchange of property by a corporation to a 

shareholder may be treated as a distribution to the shareholder. For a shareholder who is not a corporation, if the 

FMV of the property on the date of the sale or exchange 

exceeds the price paid by the shareholder, the excess is 

treated as a distribution to the shareholder.

Unreasonable rents. If a corporation rents property from 

a shareholder and the rent is unreasonably more than the 

shareholder would charge to a stranger for use of the 

same property, the excessive part of the rent may be treated as a distribution to the shareholder.

Unreasonable salaries. If a corporation pays an employee who is also a shareholder a salary that is unreasonably high considering the services actually performed 

by the shareholder-employee, the excessive part of the 

salary may be treated as a distribution to the shareholder-employee.

Reporting Dividends and Other 

Distributions

A corporate distribution to a shareholder is generally treated as a distribution of earnings and profits. Any part of a 

distribution from either current or accumulated earnings 

and profits is reported to the shareholder as a dividend. 

Any part of a distribution that is not from earnings and 

profits is applied against and reduces the adjusted basis 

of the stock in the hands of the shareholder. To the extent 

the balance is more than the adjusted basis of the stock, 

the shareholder has a gain (usually a capital gain) from 

the sale or exchange of property.

For information on shareholder reporting of corporate 

distributions, see Pub. 550.

Form 1099-DIV. File Form 1099-DIV, Dividends and Distributions, with the IRS for each shareholder to whom the 

corporation has paid dividends and other distributions on 

stock of $10 or more during a calendar year. A corporation 

must generally send Forms 1099-DIV to the IRS with Form 

1096, Annual Summary and Transmittal of U.S. Information Returns, by February 28 (March 31 if filing electronically) of the year following the year of the distribution. For 

more information, see the General Instructions for Certain 

Information Returns (Forms 1096, 1097, 1098, 1099, 

3921, 3922, 5498, and W-2G).

Generally, the corporation must furnish Forms 

1099-DIV to shareholders by January 31 of the year following the close of the calendar year during which it made 

the distributions. However, the corporation may furnish the 

Form 1099-DIV to shareholders after November 30 of the 

year of the distributions if it has made its final distributions 

for the year. The corporation may furnish the Form 

1099-DIV to shareholders anytime after April 30 of the 

year of the distributions if it gives the Form 1099-DIV with 

the final distributions for the calendar year.

If any regular due date falls on a Saturday, Sunday, or 

legal holiday, file by the next business day. A business day 

is any day that is not a Saturday, Sunday, or legal holiday.

Backup withholding. Dividends may be subject to 

backup withholding. For more information on backup withholding, see the General Instructions for Certain Information Returns.

Form 5452. File Form 5452, Corporate Report of Nondividend Distributions, if nondividend distributions were 

made to shareholders.

Publication 542 (1-2024) 17
A calendar tax year corporation must file Form 5452 

with its income tax return for the tax year in which the nondividend distributions were made. A fiscal tax year corporation must file Form 5452 with its income tax return due 

for the first fiscal year ending after the calendar year in 

which the nondividend distributions were made.

Current year earnings and profits. If a corporation's 

earnings and profits for the year (figured as of the close of 

the year without reduction for any distributions made during the year) are more than the total amount of distributions made during the year, all distributions made during 

the year are treated as distributions of current year earnings and profits. If the total amount of distributions is more 

than the earnings and profits for the year, see Accumulated earnings and profits, later.

Example. You are the only shareholder of a corporation that uses the calendar year as its tax year. In January, 

you use the worksheet in the Form 5452 instructions to figure your corporation's current year earnings and profits for 

the previous year. During the year, the corporation made 

four $1,000 distributions to you. At the end of the year (before subtracting distributions made during the year), the 

corporation had $10,000 of current year earnings and 

profits.

Since the corporation's current year earnings and profits ($10,000) were more than the amount of the distributions it made during the year ($4,000), all of the distributions are treated as distributions of current year earnings 

and profits.

The corporation must issue a Form 1099-DIV to you to 

report the $4,000 distributed to you during the previous 

year as dividends. The corporation must use Form 1096 to 

report this information to the IRS. The corporation does 

not deduct these dividends on its income tax return.

Accumulated earnings and profits. If a corporation's 

current year earnings and profits (figured as of the close of 

the year without reduction for any distributions made during the year) are less than the total distributions made during the year, part or all of each distribution is treated as a 

distribution of accumulated earnings and profits. Accumulated earnings and profits are earnings and profits the corporation accumulated before the current year.

If the total amount of distributions is less than current 

year earnings and profits, see Current year earnings and 

profits above.

Used with current year earnings and profits. If the 

corporation has current year earnings and profits, figure 

the use of accumulated and current earnings and profits 

as follows.

1. Divide the current year earnings and profits by the total distributions made during the year.

2. Multiply each distribution by the percentage figured in 

(1) to get the amount treated as a distribution of current year earnings and profits.

3. Start with the first distribution and treat the part of 

each distribution greater than the allocated current 

year earnings and profits figured in (2) as a distribution of accumulated earnings and profits.

4. If accumulated earnings and profits are reduced to 

zero, the remaining part of each distribution is applied 

against and reduces the adjusted basis of the stock in 

the hands of the shareholders. To the extent that the 

balance is more than the adjusted basis of the stock, 

it is treated as a gain from the sale or exchange of 

property.

Example. You are the only shareholder of a corporation that uses the calendar year as its tax year. In January, 

you use the worksheet in the Form 5452 instructions to figure your corporation's current year earnings and profits for 

the previous year. At the beginning of the year, the corporation's accumulated earnings and profits balance was 

$20,000. During the year, the corporation made four 

$4,000 distributions to you ($4,000 × 4 = $16,000). At the 

end of the year (before subtracting distributions made during the year), the corporation had $10,000 of current year 

earnings and profits.

Since the corporation's current year earnings and profits ($10,000) were less than the distributions it made during the year ($16,000), part of each distribution is treated 

as a distribution of accumulated earnings and profits. 

Treat the distributions as follows.

1. Divide the current year earnings and profits ($10,000) 

by the total amount of distributions made during the 

year ($16,000). The result is 0.625.

2. Multiply each $4,000 distribution by the 0.625 figured 

in (1) to get the amount ($2,500) of each distribution 

treated as a distribution of current year earnings and 

profits.

3. The remaining $1,500 of each distribution is treated 

as a distribution from accumulated earnings and profits. The corporation distributed $6,000 ($1,500 × 4) of 

accumulated earnings and profits.

The remaining $14,000 ($20,000 − $6,000) of accumulated earnings and profits is available for use in the following 

year.

The corporation must issue a Form 1099-DIV to you to 

report the $16,000 distributed to you during the previous 

year as dividends. The corporation must use Form 1096 to 

report this information to the IRS. The corporation does 

not deduct these dividends on its income tax return.

Used without current year earnings and profits. If 

the corporation has no current year earnings and profits, 

figure the use of accumulated earnings and profits as follows.

1. If the current year earnings and profits balance is negative, prorate the negative balance to the date of each 

distribution made during the year.

2. Figure the available accumulated earnings and profits 

balance on the date of each distribution by subtracting the prorated amount of current year earnings and 

profits from the accumulated balance.

18 Publication 542 (1-2024)
3. Treat each distribution as a distribution of these adjusted accumulated earnings and profits.

4. If adjusted accumulated earnings and profits are reduced to zero, the remaining distributions are applied 

against and reduce the adjusted basis of the stock in 

the hands of the shareholders. To the extent that the 

balance is more than the adjusted basis of the stock, 

it is treated as a gain from the sale or exchange of 

property.

Example. You are the only shareholder of a corporation that uses the calendar year as its tax year. In January, 

you use the worksheet in the Form 5452 instructions to figure your corporation's current year earnings and profits for 

the previous year. At the beginning of the year, the corporation's accumulated earnings and profits balance was 

$20,000. During the year, the corporation made four 

$4,000 distributions to you on March 31, June 30, September 30, and December 31. At the end of the year (before subtracting distributions made during the year), the 

corporation had a negative $10,000 current year earnings 

and profits balance.

Since the corporation had no current year earnings and 

profits, all of the distributions are treated as distributions of 

accumulated earnings and profits. Treat the distributions 

as follows.

1. Prorate the negative current year earnings and profits 

balance to the date of each distribution made during 

the year. The negative $10,000 can be spread evenly 

by prorating a negative $2,500 to each distribution.

2. The following table shows how to figure the available 

accumulated earnings and profits balance on the date 

of each distribution.

March 31 Distribution

Accumulated earnings and profits .............. $20,000 

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ $17,500 

Amount of distribution treated as a dividend ....... ($4,000)

June 30 Distribution

Accumulated earnings and profits .............. $13,500 

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ $11,000 

Amount of distribution treated as a dividend ....... ($4,000)

September 30 Distribution

Accumulated earnings and profits .............. $7,000 

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ $4,500 

Amount of distribution treated as a dividend ....... ($4,000)

December 31 Distribution

Accumulated earnings and profits .............. $500 

Prorated current year earnings and profits ......... ($2,500)

Accumulated earnings and profits available ........ ($2,000)

Amount of distribution treated as a dividend ....... $0 

Nondividend amount (reduction of stock basis or gain 

from sale/exchange of property) ............... $4,000 

Year-end accumulated earnings and profits ........ ($2,000)

The corporation must issue a Form 1099-DIV to you to 

report $12,000 of the $16,000 distributed to you during the 

previous year as dividends. The corporation must use 

Form 1096 to report this information to the IRS. The corporation does not deduct these dividends on its income 

tax return. However, the corporation must attach Form 

5452 to this return to report the nondividend distribution.

For more information about figuring earnings and 

profits, see the Worksheet for Figuring Current 

Year Earnings and Profits in the Form 5452 instructions.

How To Get Tax Help

If you have questions about a tax issue; need help preparing your tax return; or want to download free publications, 

forms, or instructions, go to IRS.gov to find resources that 

can help you right away.

Using online tools to help prepare your return. Go to 

IRS.gov/Tools for the following.

• The Online EIN Application (IRS.gov/EIN) helps you 

get an employer identification number (EIN) at no 

cost.

• The Tax Calendar (TAX.gov/calendar) helps you track 

important business tax dates and deadlines right from 

your desktop.

• The FATCA FFI List Search and Download Tool 

(IRS.gov/fatca-ffilist) makes it easier to find out if a 

Foreign Financial Institution has registered with 

FATCA.

• The Electronic Federal Tax Payment System (IRS.gov/

EFTPS) is a free tax payment system that allows you 

to pay your federal taxes online or by phone with 

EFTPS.

Getting answers to your tax questions. On 

IRS.gov, you can get up-to-date information on 

current events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you get answers to some of the most common tax questions.

• IRS.gov/ITA: The Interactive Tax Assistant, a tool that 

will ask you questions and, based on your input, provide answers on a number of tax law topics.

• IRS.gov/Forms: Find forms, instructions, and publications. You will find details on the most recent tax 

changes and hundreds of interactive links to help you 

find answers to your questions.

• You may also be able to access tax information in your 

e-filing software.

Need someone to prepare your tax return? There are 

various types of tax return preparers, including tax preparers, enrolled agents, certified public accountants (CPAs), 

attorneys, and many others who don’t have professional 

credentials. If you choose to have someone prepare your 

TIP

Publication 542 (1-2024) 19
tax return, choose that preparer wisely. A paid tax preparer is:

• Primarily responsible for the overall substantive accuracy of your return,

• Required to sign the return, and

• Required to include their preparer tax identification 

number (PTIN).

Although the tax preparer always signs the return, 

you're ultimately responsible for providing all the 

information required for the preparer to accurately 

prepare your return. Anyone paid to prepare tax returns for 

others should have a thorough understanding of tax matters. For more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer on IRS.gov.

Employers can register to use Business Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/employer for fast, free, and secure 

online W-2 filing options to CPAs, accountants, enrolled 

agents, and individuals who process Form W-2, Wage 

and Tax Statement, and Form W-2c, Corrected Wage and 

Tax Statement.

IRS social media. Go to IRS.gov/SocialMedia to see the 

various social media tools the IRS uses to share the latest 

information on tax changes, scam alerts, initiatives, products, and services. At the IRS, privacy and security are our 

highest priority. We use these tools to share public information with you. Don’t post your taxpayer identification 

number (TIN) or other confidential information on social 

media sites. Always protect your identity when using any 

social networking site.

The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, 

Spanish, and ASL.

• Youtube.com/irsvideos.

• Youtube.com/irsvideosmultilingua.

• Youtube.com/irsvideosASL.

Watching IRS videos. The IRS Video portal 

(IRSVideos.gov) contains video and audio presentations 

for individuals, small businesses, and tax professionals.

Online tax information in other languages. You can 

find information on IRS.gov/MyLanguage if English isn’t 

your native language.

Free Over-the-Phone Interpreter (OPI) Service. The 

IRS is committed to serving taxpayers with limited-English 

proficiency (LEP) by offering OPI services. The OPI Service is a federally funded program and is available at Taxpayer Assistance Centers (TACs), most IRS offices, and 

every VITA/TCE return site. OPI Service is accessible in 

more than 350 languages.

Accessibility Helpline available for taxpayers with 

disabilities. Taxpayers who need information about accessibility services can call 833-690-0598. The Accessibility Helpline can answer questions related to current and 

CAUTION

!

future accessibility products and services available in alternative media formats (for example, braille, large print, 

audio, etc.). The Accessibility Helpline does not have access to your IRS account. For help with tax law, refunds, or 

account-related issues, go to IRS.gov/LetUsHelp.

Note. Form 9000, Alternative Media Preference, or 

Form 9000(SP) allows you to elect to receive certain types 

of written correspondence in the following formats.

• Standard Print.

• Large Print.

• Braille.

• Audio (MP3).

• Plain Text File (TXT).

• Braille Ready File (BRF).

Disasters. Go to IRS.gov/DisasterRelief to review the 

available disaster tax relief.

Getting tax forms and publications. Go to IRS.gov/

Forms to view, download, or print all of the forms, instructions, and publications you may need. Or, you can go to 

IRS.gov/OrderForms to place an order.

Getting tax publications and instructions in eBook 

format. You can also download and view popular tax 

publications and instructions on mobile devices as 

eBooks at IRS.gov/eBooks.

IRS eBooks have been tested using Apple's iBooks for 

iPad. Our eBooks haven’t been tested on other dedicated 

eBook readers, and eBook functionality may not operate 

as intended.

Reporting and resolving your tax-related identity 

theft issues. 

• Tax-related identity theft happens when someone 

steals your personal information to commit tax fraud. 

Your taxes can be affected if your TIN is used to file a 

fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with taxpayers by 

email, text messages, telephone calls, or social media 

channels to request personal or financial information. 

This includes requests for personal identification numbers (PINs), passwords, or similar information for 

credit cards, banks, or other financial accounts.

• Go to IRS.gov/IdentityTheft, the IRS Identity Theft 

Central webpage, for information on identity theft and 

data security protection for taxpayers, tax professionals, and businesses. If your TIN has been lost or stolen or you suspect you’re a victim of tax-related identity theft, you can learn what steps you should take.

Making a tax payment. Payments of U.S. tax must be 

remitted to the IRS in U.S. dollars. Digital assets are not 

20 Publication 542 (1-2024)
accepted. Go to IRS.gov/Payments for information on how 

to make a payment using any of the following options.

• IRS Direct Pay: Pay your tax bill or estimated tax payment directly from your checking or savings account at 

no cost to you.

• Debit or Credit Card, or Digital Wallet: Choose an approved payment processor to pay online or by phone.

• Electronic Funds Withdrawal: Schedule a payment 

when filing your federal taxes using tax return preparation software or through a tax professional.

• Electronic Federal Tax Payment System: Best option 

for businesses. Enrollment is required.

• Check or Money Order: Mail your payment to the address listed on the notice or instructions.

• Cash: You may be able to pay your taxes with cash at 

a participating retail store.

• Same-Day Wire: You may be able to do same-day 

wire from your financial institution. Contact your financial institution for availability, cost, and time frames.

Note. The IRS uses the latest encryption technology to 

ensure that the electronic payments you make online, by 

phone, or from a mobile device using the IRS2Go app are 

safe and secure. Paying electronically is quick, easy, and 

faster than mailing in a check or money order.

What if I can’t pay now? Go to IRS.gov/Payments for 

more information about your options.

• Apply for an online payment agreement (IRS.gov/

OPA) to meet your tax obligation in monthly installments if you can’t pay your taxes in full today. Once 

you complete the online process, you will receive immediate notification of whether your agreement has 

been approved.

• Use the Offer in Compromise Pre-Qualifier to see if 

you can settle your tax debt for less than the full 

amount you owe. For more information on the Offer in 

Compromise program, go to IRS.gov/OIC.

Understanding an IRS notice or letter you’ve received. Go to IRS.gov/Notices to find additional information about responding to an IRS notice or letter.

Contacting your local IRS office. Keep in mind, many 

questions can be answered on IRS.gov without visiting an 

IRS TAC. Go to IRS.gov/LetUsHelp for the topics people 

ask about most. If you still need help, IRS TACs provide 

tax help when a tax issue can’t be handled online or by 

phone. All TACs now provide service by appointment, so 

you’ll know in advance that you can get the service you 

need without long wait times. Before you visit, go to 

IRS.gov/TACLocator to find the nearest TAC and to check 

hours, available services, and appointment options. Or, on 

the IRS2Go app, under the Stay Connected tab, choose 

the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate Service (TAS) 

Is Here To Help You

What Is TAS?

TAS is an independent organization within the IRS that 

helps taxpayers and protects taxpayer rights. Their job is 

to ensure that every taxpayer is treated fairly and that you 

know and understand your rights under the Taxpayer Bill 

of Rights.

How Can You Learn About Your Taxpayer 

Rights?

The Taxpayer Bill of Rights describes 10 basic rights that 

all taxpayers have when dealing with the IRS. Go to 

TaxpayerAdvocate.IRS.gov to help you understand what 

these rights mean to you and how they apply. These are 

your rights. Know them. Use them.

What Can TAS Do for You?

TAS can help you resolve problems that you can’t resolve 

with the IRS. And their service is free. If you qualify for 

their assistance, you will be assigned to one advocate 

who will work with you throughout the process and will do 

everything possible to resolve your issue. TAS can help 

you if:

• Your problem is causing financial difficulty for you, 

your family, or your business;

• You face (or your business is facing) an immediate 

threat of adverse action; or

• You’ve tried repeatedly to contact the IRS but no one 

has responded, or the IRS hasn’t responded by the 

date promised.

How Can You Reach TAS?

TAS has offices in every state, the District of Columbia, 

and Puerto Rico. To find your advocate's number:

• Go to TaxpayerAdvocate.IRS.gov/Contact-Us;

• Download Pub. 1546, The Taxpayer Advocate Service 

Is Your Voice at the IRS, available at IRS.gov/pub/irspdf/p1546.pdf;

• Call the IRS toll free at 800-TAX-FORM 

(800-829-3676) to order a copy of Pub. 1546;

• Check your local directory; or

• Call TAS toll free at 877-777-4778.

How Else Does TAS Help Taxpayers?

TAS works to resolve large-scale problems that affect 

many taxpayers. If you know of one of these broad issues, 

report it to them at IRS.gov/SAMS.

Publication 542 (1-2024) 21
Low Income Taxpayer Clinics (LITCs)

LITCs are independent from the IRS. LITCs represent individuals whose income is below a certain level and need to 

resolve tax problems with the IRS, such as audits, appeals, and tax collection disputes. In addition, LITCs can 

provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or 

a small fee for eligible taxpayers. To find an LITC near you, 

go to TaxpayerAdvocate.IRS.gov/about-us/Low-IncomeTaxpayer-Clinics-LITC or see IRS Pub. 4134, Low Income 

Taxpayer Clinic List.

22 Publication 542 (1-2024)
Other Useful Forms for Corporations

Other Useful Forms

Form Use this form to—

W-2 and W-3—Wage and Tax Statement; and 

Transmittal of Wage and Tax Statements

Report wages, tips, and other compensation, and withheld income, social 

security, and Medicare taxes for employees.

W-2G—Certain Gambling Winnings Report gambling winnings from horse racing, dog racing, jai alai, lotteries, 

keno, bingo, slot machines, sweepstakes, wagering pools, etc.

926—Return by a U.S. Transferor of Property to a 

Foreign Corporation

Report certain transfers to foreign corporations under section 6038B.

940—Employer's Annual Federal Unemployment 

(FUTA) Tax Return

Report and pay FUTA tax if the corporation either: 

1. Paid wages of $1,500 or more in any calendar quarter during the 

calendar year (or the preceding calendar year), or

2. Had one or more employees working for the corporation for at least 

some part of a day in any 20 different weeks during the calendar year (or 

the preceding calendar year).

941—Employer's QUARTERLY Federal Tax Return Report quarterly income tax withheld on wages and employer and employee 

social security and Medicare taxes. 

943—Employer's Annual Federal Tax Return for 

Agricultural Employees

Report income tax withheld and employer and employee social security and 

Medicare tax on farmworkers.

944—Employer's ANNUAL Federal Tax Return File annual Form 944 instead of filing quarterly Forms 941, if the IRS notified 

you in writing.

945—Annual Return of Withheld Federal Income Tax Report income tax withheld from nonpayroll payments, including pensions, 

annuities, individual retirement arrangements (IRAs), gambling winnings, and 

backup withholding.

952—Consent To Extend the Time To Assess Tax 

Under Section 332(b)

Extend the period of assessment of all income taxes of the receiving 

corporation on the complete liquidation of a subsidiary under section 332.

965-B—Corporate and Real Estate Investment Trust 

(REIT) Report of Net 965 Tax Liability and Electing 

REIT Report of 965 Amounts 

This form must be completed by a taxpayer for every tax year for which the 

taxpayer has any net 965 tax liability outstanding and not fully paid at any 

point during the tax year. See the Instructions for Form 965-B.

966—Corporate Dissolution or Liquidation Report the adoption of a resolution or plan to dissolve the corporation or 

liquidate any of its stock.

1042 and 1042-S—Annual Withholding Tax Return 

for U.S. Source Income of Foreign Persons; and 

Foreign Person's U.S. Source Income Subject to 

Withholding

Report withheld tax on payments or distributions made to nonresident alien 

individuals, foreign partnerships, or foreign corporations to the extent these 

payments or distributions constitute gross income from sources within the 

United States that is not effectively connected with a U.S. trade or business. 

In addition, a publicly traded partnership is required to withhold on 

distributions of effectively connected income to its foreign partners. See Pub. 

515, Withholding of Tax on Nonresident Aliens and Foreign Entities. 

1042-T—Annual Summary and Transmittal of Forms 

1042-S

Transmit paper Forms 1042-S to the IRS.

1096—Annual Summary and Transmittal of U.S. 

Information Returns

Transmit paper Forms 1098, 1099, 5498, and W-2G to the IRS.

Publication 542 (1-2024) 23
Other Useful Forms

Form Use this form to—

1097-BTC, 1098, 1098-C, 1098-E, 1098-F, 1098-T, 

1099-A, B, C, CAP, G, H, DIV, INT, K, LTC, MISC, 

NEC, OID, PATR, Q, R, S, SA, 3921, and 3922.

Important: Every corporation must file Forms 

1099-MISC (or 1099-NEC for nonemployee 

compensation) if, in the course of its trade or 

business, it makes payments of rents, services, 

commissions, or other fixed or determinable income 

(see section 6041) totaling $600 or more to any one 

person during the calendar year.

Also use these returns to report amounts received 

as a nominee for another person. For more details, 

see the General Instructions for Certain Information 

Returns (1097, 1098, 1099, 3921, 3922, 5498, and 

W-2G). 

Report the following: 

• Tax credits to bond holders;

• Mortgage interest;

• Contributions of certain motor vehicles, boats, and airplanes;

• Student loan interest;

• Fines, penalties, and other amounts;

• Certain tuition payments;

• Acquisitions or abandonments of secured property;

• Proceeds from broker and barter exchange transactions;

• Cancellation of debts;

• Changes in corporate control and capital structure;

• Certain government payments;

• Advance payments of health coverage insurance premiums;

• Dividends and distributions;

• Interest payments;

• Merchant card and third-party network payments;

• Payments of long-term care and accelerated death benefits;

• Miscellaneous income payments to certain fishing boat crew members, 

to providers of health and medical services, of rent or royalties, of 

nonemployee compensation, etc.;

• Original issue discount;

• Distributions received from cooperatives;

• Distributions from certain qualified education programs;

• Distributions from pensions, annuities, retirement or profit-sharing plans, 

IRAs, insurance contracts, etc.;

• Proceeds from real estate transactions;

• Distributions from an HSA, Archer MSA, or Medicare Advantage MSA;

• Exercise of incentive stock options; and

• Transfer of stock acquired through employee stock purchase plans.

1122—Authorization and Consent of Subsidiary 

Corporation To Be Included in a Consolidated 

Income Tax Return

Include a subsidiary in a consolidated return. Attach this form to the parent's 

consolidated return. Attach a separate Form 1122 for each subsidiary being 

included in the consolidated return.

1138—Extension of Time for Payment of Taxes by a 

Corporation Expecting a Net Loss Carryback

Request an extension of time for payment of tax for the immediately 

preceding tax year if the corporation expects a net operating loss for the 

current year.

3520—Annual Return To Report Transactions With 

Foreign Trusts and Receipt of Certain Foreign Gifts

Report ownership of and certain transactions with foreign trusts, including 

receipt of certain large gifts. See Schedule N (Form 1120), Question 5.

3520-A—Annual Information Return of Foreign Trust 

With a U.S. Owner

Report information about the foreign trust, its U.S. beneficiaries, and any U.S. 

person who is treated as an owner of any portion of the foreign trust.

5471—Information Return of U.S. Persons With 

Respect to Certain Foreign Corporations

Satisfy the reporting requirements of sections 6038 and 6046, and the related 

regulations, as well as report amounts related to section 965. Form 5471 and 

the related schedules are used by certain U.S. persons who are officers, 

directors, or shareholders in certain foreign corporations. See the Instructions 

for Form 5471.

5498—IRA Contribution Information Report contributions (including rollover contributions) to any IRA, including a 

SEP, SIMPLE, or Roth IRA, and to report Roth IRA conversions, IRA 

recharacterizations, and the fair market value (FMV) of the account.

5498-ESA—Coverdell ESA Contribution Information Report contributions (including rollover contributions) to a Coverdell 

education savings account (ESA).

5498-SA—HSA, Archer MSA, or Medicare 

Advantage MSA Information

Report contributions and rollovers to an HSA or Archer MSA and the FMV of 

an HSA, Archer MSA, or Medicare Advantage MSA. For more information, 

see the general and specific instructions for Forms 1098, 1099, 5498, and 

W-2G. 

5713—International Boycott Report Report operations in, or related to, a “boycotting” country, government, 

company, or national of a country and to figure the loss of certain tax benefits.

24 Publication 542 (1-2024)
Other Useful Forms

Form Use this form to—

8023—Elections Under Section 338 for 

Corporations Making Qualified Stock Purchases 

Make elections under section 338 for a “target” corporation if the purchasing 

corporation has made a qualified stock purchase of the target corporation.

8027—Employer's Annual Information Return of Tip 

Income and Allocated Tips

Report receipts from large food or beverage operations, tips reported by 

employees, and allocated tips.

8275—Disclosure Statement Disclose items or positions, except those contrary to a regulation, that are not 

otherwise adequately disclosed on a tax return. The disclosure is made to 

avoid the parts of the accuracy-related penalty imposed for disregard of rules 

or substantial understatement of tax. Also use Form 8275 for disclosures 

relating to preparer penalties for understatements due to unrealistic positions 

or disregard of rules.

8275-R—Regulation Disclosure Statement Disclose any item on a tax return for which a position has been taken that is 

contrary to Treasury regulations.

8281—Information Return for Publicly Offered 

Original Issue Discount Instruments 

Report the issuance of public offerings of debt instruments (obligations).

8300—Report of Cash Payments Over $10,000 

Received in a Trade or Business

Report the receipt, in the course of a trade or business, of more than $10,000 

in cash or foreign currency in one transaction or a series of related 

transactions.

8594—Asset Acquisition Statement Under Section 

1060

Report a sale of assets that make up a trade or business if goodwill or going 

concern value attaches, or could attach, to such assets and if the buyer's 

basis is determined only by the amount paid for the assets. Both the seller 

and buyer must use this form.

8806—Information Return for Acquisition of Control 

or Substantial Change in Capital Structure

Report an acquisition of control or a substantial change in the capital 

structure of a domestic corporation.

8842—Election To Use Different Annualization 

Periods for Corporate Estimated Tax

Elect one of the annualization periods in section 6655(e)(2) for figuring 

estimated tax payments under the annualized income installment method.

8849—Claim for Refund of Excise Taxes Claim a refund of certain excise taxes.

8858—Information Return of U.S. Persons With 

Respect to Foreign Disregarded Entities (FDEs) and 

Foreign Branches (FBs)

Satisfy reporting requirements that apply if the corporation directly or 

indirectly owns a foreign disregarded entity or a foreign branch. A separate 

Form 8858 is required for each foreign branch or foreign disregarded entity. 

See the Instructions for Form 8858.

Publication 542 (1-2024) 25
Other Useful Forms

Form Use this form to—

8865—Return of U.S. Person With Respect to 

Certain Foreign Partnerships

Report an interest in a foreign partnership. A domestic corporation may have 

to file Form 8865 if it: 

1. Controlled a foreign partnership (owned more than a 50% direct or 

indirect interest in the partnership).

2. Owned at least a 10% direct or indirect interest in a foreign partnership 

while U.S. persons controlled that partnership.

3. Had an acquisition, disposition, or change in proportional interest of a 

foreign partnership that: 

 a. Increased its direct interest to at least 10% or reduced its direct 

interest of at least 10% to less than 10%, or 

 b. Changed its direct interest by at least a 10% interest.

4. Contributed property to a foreign partnership in exchange for a 

partnership interest if: 

 a. Immediately after the contribution, the corporation directly or 

indirectly owned at least a 10% interest in the foreign partnership, or 

 b. The FMV of the property the corporation contributed to the foreign 

partnership in exchange for a partnership interest exceeds $100,000 

when added to other contributions of property made to the foreign 

partnership during the preceding 12-month period.

The domestic corporation may also have to file Form 8865 to report certain 

dispositions by a foreign partnership of property it previously contributed to 

that partnership if it was a partner at the time of the disposition. For more 

details, including penalties for failing to file Form 8865, see the Instructions 

for Form 8865.

8873—Extraterritorial Income Exclusion Figure the amount of extraterritorial income excluded from gross income for 

the tax year (generally repealed for post-2004 income). See the Instructions 

for Form 8873.

8876—Excise Tax on Structured Settlement 

Factoring Transactions

Report and pay the 40% excise tax imposed under section 5891.

8883—Asset Allocation Statement Under Section 

338

Report information about transactions involving the deemed sale of corporate 

assets under section 338.

8886—Reportable Transaction Disclosure Statement Disclose information for each reportable transaction in which the corporation 

participated. Attach Form 8886 to the corporation's income tax return for each 

tax year in which it participated in a reportable transaction. The corporation 

may have to pay a penalty if it is required to file Form 8886 and does not do 

so. Other penalties may also apply. For more details, see the Instructions for 

Form 8886.

8918—Material Advisor Disclosure Statement Disclose certain information about a reportable transaction to the IRS. 

Material advisors who file Form 8918 will receive a reportable transaction 

number from the IRS. This number must be provided to all taxpayers and 

material advisors for whom the material advisor acts as a material advisor. 

Other reporting requirements apply. See the Instructions for Form 8918.

8990—Limitation on Business Interest Expense 

Under Section 163(j)

Figure the amount of business interest expense the corporation can deduct 

and the amount to carry forward to the next year. See the Instructions for 

Form 8990.

8991—Tax on Base Erosion Payments of Taxpayers 

With Substantial Gross Receipts

Determine an applicable taxpayer's base erosion minimum tax amount for the 

year. See the Instructions for Form 8991.

8992—U.S. Shareholder Calculation of Global 

Intangible Low-Taxed Income (GILTI)

Figure a U.S. shareholder's GILTI inclusion for years in which they are U.S. 

shareholders of controlled foreign corporations (CFCs). See the Instructions 

for Form 8992.

8993—Section 250 Deduction for Foreign-Derived 

Intangible Income (FDII) and Global Intangible 

Low-Taxed Income (GILTI) 

Figure the amount of the eligible deduction for FDII and GILTI under section 

250.

26 Publication 542 (1-2024)
To help us develop a more useful index, please let us know if you have ideas for index entries.

Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A

Accounting methods 8

Accrual method 8

Change in accounting method:

Section 481(a) adjustment 8

Mark-to-market accounting 

method 8

Percentage of completion method 8

Accounting periods 8

Accumulated earnings tax 15

Assistance (See Tax help)

At-risk limits 14

B

Backup withholding 17

Base erosion minimum tax 15

Below-market loans 11

C

Capital contributions 4

Capital losses 13

Charitable contributions 12

Closely held corporation 3

At-risk limits 14

Corporate Alternative Minimum 

Tax 15

Corporate preference items 10

Corporations, businesses taxed 

as 2

Credits:

Foreign tax 15

General business credit 15

Prior year minimum tax 15

D

Distributions:

Money or property 16

Other 17

Reporting 17

Stock or stock rights 16

To shareholders 16

Dividends-received deduction 10

E

EFTPS, Electronic Federal Tax 

Payment System 5

Electronic filing 5

Estimated tax 6

Extraordinary dividends 11

F

Figuring:

Tax 15

Foreign tax credit 15

Form 6

1096 17

1099-DIV 17

1118 15

1120 5

1120X 14

1139 14

2220 7

3800 15

4255 15

4626 15

5452 17

7004 5

8611 15

8827 15

8832 3

8834 15

8845 15

8874 15

8882 15

8912 15

G

Going into business 9

I

Income tax returns 5

L

Loans, below-market 11

N

Net operating losses 14

Nontaxable exchange of property 

for stock 3

O

Other useful forms 23

P

Paid-in capital 4

Passive activity limits 15

Paying estimated tax 7

Penalties:

Estimated tax 7

Late filing of return 5

Late payment of tax 6

Other 6

Trust fund recovery 6

Personal service corporation 3

Preference items 10

Publications (See Tax help)

R

Recapture taxes:

Childcare facilities and services 

credit 15

Indian employment credit 15

Investment credit 15

Low-income housing credit 15

New markets credit 15

Qualified electric vehicle credit 15

Recordkeeping 9

Related persons 9

Retained earnings 15

S

Small business taxpayer 8

Start-up costs 9

T

Tax help 19

Tax rates 15

Tax, figuring 15

Publication 542 (1-2024) 27