Purpose of Form

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

Who Must File

Unless exempt under section 501, all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. Domestic corporations must file Form 1120 unless they are required to file a special return. See Special Returns for Certain Organizations below.

Limited liability companies.   

If an entity with more than one owner was formed as a limited liability company (LLC) under state law, it generally is treated as a partnership for federal income tax purposes and files Form 1065, U.S. Return of Partnership Income. Generally, a single-member LLC is disregarded as an entity separate from its owner and reports its income and deductions on its owner's federal income tax return. The LLC can file a Form 1120 only if it has filed Form 8832, Entity Classification Election, to elect to be treated as an association taxable as a corporation. For more information about LLCs, see Pub. 3402, Tax Issues for Limited Liability Companies.

Corporations engaged in farming.   

A corporation (other than a corporation that is a subchapter T cooperative) that engages in farming should use Form 1120 to report the income (loss) from such activities. Enter the income and deductions of the corporation according to the instructions for lines 1 through 10 and 12 through 29.

Ownership interest in a Financial Asset Securitization Investment Trust (FASIT).   

Special rules apply to a FASIT in existence on October 22, 2004, to the extent that regular interests issued by the FASIT before October 22, 2004, continue to remain outstanding in accordance with their original terms.

 If a corporation holds an ownership interest in a FASIT to which these special rules apply, it must report all items of income, gain, deductions, losses, and credits on the corporation's income tax return (except as provided in section 860H). Show a breakdown of the items on an attached schedule. For more information, see sections 860H and 860L.

What's New

-Form 1120-A is obsolete for tax years beginning in 2007. All domestic corporations must file Form 1120, unless they are required to file one of the special returns listed under Special Returns for Certain Corporations on page 2.

-A corporation that is a policyholder owning one or more employer-owned life insurance contracts issued after August 17, 2006, must file new Form 8925, Employer-Owned Life Insurance Contracts.

-The extraterritorial income exclusion generally does not apply to transactions that begin in 2007. However, income from certain transactions may still be eligible for the exclusion. See the Instructions for Form 8873 for details.

-The increased deduction for reforestation expenses for small timber producers does not apply to expenses paid or incurred after December 31, 2007.

-The election to deduct GO Zone clean-up costs does not apply to costs paid or incurred after December 31, 2007.

-Changes have been made to the list of principal business activity codes. See the list beginning on page 20.