Form 8916-A Reconciliation of Cost of Goods Sold Reported on Schedul

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I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 8916-A, PAGE 1 of 2
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE, WRITING, SUB. 20.
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form

8916-A

Action

Date

O.K. to print
Revised proofs
requested

Reconciliation of Cost of Goods Sold Reported
on Schedule M-3

Department of the Treasury
Internal Revenue Service

©

Signature

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

OMB No. 1545-XXXX

2006

Name of common parent

Employer identification number

Name of subsidiary

Employer identification number

Cost of Goods Sold Items

1

Amounts attributable to cost flow assumptions

2

Amounts attributable to section 263A costs:

(a)
Income (Loss)
per Income
Statement

(b)
Temporary
Difference

(c)
Permanent
Difference

(d)
Income (Loss)
per Tax Return

a Stock option expense

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b Other equity based compensation
c Meals and entertainment
d Parachute payments

e Compensation with section 162(m) limitation
f Pension and profit sharing

g Other post-retirement benefits
h Deferred compensation
i

Section 198 environmental remediation costs

j

Amortization

k Depletion
l

Depreciation

m Corporate owned life insurance premiums
n Other section 263A costs
3

Inventory shrinkage accruals

4

Excess inventory and obsolescence reserves

5

Lower of cost or market write-downs

6

Other items with differences (attach schedule)

7

Other items with no differences

8

Total cost of goods sold. Add lines 1 thorugh 7.
Enter total on Schedule M-3 (Form 1065), Part II, line
15; Schedule M-3 (Form 1120), Part II, line 17; or
Schedule M-3 (Form 1120S), Part II, line 15.

For Paperwork Reduction Act Notice, see page 2.

Cat. No. 48657X

Form

8916-A

(2006)

4
I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
FORM 8916-A, PAGE 2 of 2
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES.
PAPER: WHITE, WRITING, SUB. 20.
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)

PRINTS: HEAD TO HEAD
INK: BLACK

DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8916-A (2006)

General Instructions

Page

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

Purpose of Form

Use Form 8916-A to provide a detailed schedule of the
amount reported on Schedule M-3 for Form 1120,
Form 1065, or 1120S for Cost of Goods Sold.

Who Must File

Form 8916-A must be filed for each separate entity
required to file Form 1120, Form 1065, or Form 1120S
Schedule M-3. In the case of a consolidated tax group,
a Form 8916-A must be filed as part of the Schedules
M-3 prepared for the parent company, each subsidiary,
the eliminations Schedule M-3, and the consolidated
Schedule M-3. It is not required that the supporting
detail for Form 8916-A, line 6 be presented for the
eliminations Schedule M-3 or the consolidated
Schedule M-3.

How to File

Attach Form 8916-A to each separate Schedule M-3.

Specific Instructions
A corporation is not required to complete columns (a)
and (d) if the corporation is not required to complete
these columns on Schedule M-3. See Schedule M-3
instructions for Part II and III.
Columns (b) and (c) must be completed for any tax
year for which the corporation files Form 8916-A.

Line 1
Report differences attributable to cost flow
assumptions, for example, differences between book
and tax LIFO computations.

Line 2
Report differences attributable to section 263A. [For
example, if book inventory costs equal section 471
inventory costs, report differences between section
471 inventory costs and section 263A inventory costs.]
LIFO taxpayers using the simplified production method
or the simplified resale method should report the
amount of additional §263A costs computed after LIFO
computations. LIFO taxpayers not using a simplified
§263A method should report costs attributable to
additional §263A prior to performing LIFO computation.
Differences due to purchasing, storage and handling
costs should generally be reported on line n (to the
extent not already included in lines a through m).

2

Lines 4 and 5

If the taxpayer does not distinguish between
obsolescence and excess inventory reserves and lower
of cost or market write-downs in its general ledger,
report all amounts relating to these reserves on line 4
for excess inventory and obsolescence reserves.

Line 6

Attach a schedule that separately states and
adequately discloses the nature and amount of each
expense reported on this line. See instructions for
Schedule M-3 for a definition of “separately stated and
adequately disclosed.” It is not required that the
supporting detail for Form 8916-A, line 6 be presented
for the eliminations Schedule M-3 or the consolidated
Schedule M-3.

Line 8

Line 8 should equal the amount reported on the
applicable Form 1120 Schedule M-3, Part II, line 17;
Form 1120S Schedule M-3, Part II, line 15; or Form
1065 Schedule M-3, Part II, line 15.
Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal
Revenue laws of the United States. You are required to
give us the information. We need it to ensure that you
are complying with these laws and to allow us to figure
and collect the right amount of tax.
You are not required to provide the information
requested on a form that is subject to the Paperwork
Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or
its instructions must be retained as long as their
contents may become material in the administration of
any Internal Revenue law. Generally, tax returns and
return information are confidential, as required by
section 6103.
The time needed to complete and file this form will
vary depending on individual circumstances. The
estimated average time is:
Recordkeeping
XX hr., XX min.
Learning about the
law or the form
XX hr., XX min.
Preparing, copying,
assembling, and
sending the form to the IRS
XX hr., XX min.
If you have comments concerning the accuracy of
these time estimates or suggestions for making this
form simpler, we would be happy to hear from you.
See the instructions for the tax return with which this
form is filed.