Form Schedule O (Form 1 Schedule O (Form 1 Consent Plan and Apportionment Schedule for a Controlled

13
TLS, have you
transmitted all R
text files for this
cycle update?

Date

I.R.S. SPECIFICATIONS

TO BE REMOVED BEFORE PRINTING

INSTRUCTIONS TO PRINTERS
SCHEDULE O (FORM 1120) PAGE 1 of 4
MARGINS: TOP 13 mm (1⁄ 2 ”), CENTER SIDES.
PAPER: WHITE WRITING, SUB. 20.
FLAT SIZE: 216 mm (81⁄ 2 ”) x 279 mm (11”)
PERFORATE: (NONE)

(December 2006)
Department of the Treasury
Internal Revenue Service

Name

©

Date

Signature

O.K. to print

PRINTS: FACE ONLY
INK: BLACK

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

SCHEDULE O
(Form 1120)

Action

Revised proofs
requested

Consent Plan and Apportionment Schedule
for a Controlled Group

f
o
s
a
6
t
0
f
0
a
2
r
/
D /20
1
1

OMB No. 1545-0123

Attach to Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-L, 1120-PC, 1120-REIT, or 1120-RIC.
© See separate instructions.
Employer identification number

Apportionment Plan Information

Part I

1 Type of controlled group:
a
Parent-subsidiary group
b
Brother-sister group
c
Combined group
d
Life insurance companies only

2 This corporation has been a member of this group:
a
For the entire tax year.
From
, 20
, until
b

, 20

.

3 This corporation consents to:
Adopt an apportionment plan.
a
Amend the current apportionment plan.
b
Terminate the current apportionment plan.
c

4 Check the applicable box, below, concerning the status of the group’s apportionment plan (see instructions).
a
No apportionment plan is in effect and none is being adopted.
An apportionment plan is already in effect. It was adopted for the tax year ending
, 20
, and
b
for all succeeding tax years.
All the members of this group are currently amending a previously adopted plan, which was in effect for the tax year
c
ending
, 20
, and for all succeeding tax years.
All the members of this group are adopting an apportionment plan, effective for the current tax year, which ends on
d
, 20
, and for all succeeding tax years.
The plan was terminated, effective
, 20
, because:
e
This group ceased to remain in existence during the calendar year ending on the December 31st subsequent
(i)
to the adoption of the plan.
A corporation which was a component member of this group on the December 31st of this tax return year is
(ii)
not a component member of this group on the succeeding December 31st.
A corporation which was not a component member of this group on the December 31st of this tax return
(iii)
year is a component member of this group on the succeeding December 31st.
(iv)
All the members of the group have agreed to terminate the previously adopted plan.
5

If all the members of this group are adopting a plan or amending the current plan for a tax year after the due date
(including extensions) of the tax return for this corporation, is there at least one year remaining on the statute of limitations
from the date this corporation filed its amended return for such tax year for assessing any resulting deficiency? See
instructions.

a
(i)
(ii)

b

Yes.
The statute of limitations for this year will expire on
, 20
.
On
, 20
, this corporation entered into an agreement with the
Internal Revenue Service to extend the statute of limitations for purposes of assessment until
, 20
.
No.

For Privacy Act and Paperwork Reduction Act Notice,
see Instructions for Forms 1120 and 1120-A.

Cat. No. 48100N

Schedule O (Form 1120) (12-2006)

13
TLS, have you
transmitted all R
text files for this
cycle update?

Date

I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
Schedule O (FORM 1120) PAGE 2 OF 4
MARGINS; TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") x 279mm (11")
PERFORATE: ON FOLD
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Schedule O (Form 1120) (12-2006)

Page

2

Taxable Income Apportionment (See instructions)
Part II
Caution: Each total in Part II, column (g) for each component member must agree with Form 1120, page 1, line 30 or the comparable line of such member’s
tax return.
Taxable Income Amount Allocated to
Each Bracket
(a)
Group member’s name and
employer identification number
1
2
3
4
5
6
7
8
9

f
o
s
a
6
t
0
f
0
a
2
r
/
D /20
1
1
(b)
Tax year end
(Yr-Mo)

(c)
15%

(d)
25%

(e)
34%

(f)
35%

(g)
Total (add columns
(c) through (f))

10

Total
Schedule O (Form 1120) (12-2006)

13
TLS, have you
transmitted all R
text files for this
cycle update?

Date

I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
Schedule O (FORM 1120) PAGE 3 OF 4
MARGINS; TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") x 279mm (11")
PERFORATE: ON FOLD
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Schedule O (Form 1120) (12-2006)

Part III

Page

3

Income Tax Apportionment (See instructions)
Income Tax Apportionment
(a)
Group member’s name

1
2
3
4
5
6
7
8
9

(b)
15%

(c)
25%

(d)
34%

(e)
35%

(f)
5%

f
o
s
a
6
t
0
f
0
a
2
r
/
D /20
1
1

(g)
3%

(h)
Total income tax
(combine lines
(b) through (g))

10

Total
Schedule O (Form 1120) (12-2006)

13
TLS, have you
transmitted all R
text files for this
cycle update?

Date

I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
Schedule O (FORM 1120) PAGE 4 OF 4
MARGINS; TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD TO HEAD
PAPER: WHITE WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") x 279mm (11")
PERFORATE: ON FOLD
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Schedule O (Form 1120) (12-2006)

Part IV

Page

4

Other Apportionments (See instructions)
Other Apportionments
(a)
Group member’s name

1
2
3
4
5
6
7
8
9
10

(b) Accumulated
earnings credit

(c) AMT
exemption
amount

(d) Phaseout of
AMT exemption
amount

f
o
s
a
6
t
0
f
0
a
2
r
/
D /20
1
1

(e) Penalty for failure
to pay estimated tax

(f)
Other

Total
Schedule O (Form 1120) (12-2006)

PAGER/SGML
Page 1 of 3

Userid: DEWILL00 DTD INSTR04
Leading adjust: 0%
Fileid: I1120SO.SGM (27-Nov-2006)

Instructions for Schedule O (Form 1120)

❏

Draft
(Init. & date)

❏

Ok to Print

14:47 - 27-NOV-2006

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Instructions for Schedule O
(Form 1120)

Department of the Treasury
Internal Revenue Service

(December 2006)
Consent Plan and Apportionment Schedule for a Controlled Group
Section references are to the Internal
Revenue Code unless otherwise noted.

Definitions

General Instructions

Types of controlled groups

Purpose of Schedule
Use Schedule O to show the
apportionment of taxable income,
income tax, and certain tax benefit
items between the members of a
controlled group.
Schedule O is filed by a
corporation with its income tax return,
amended return, or claim for refund, if
appropriate, for each tax year that it is
a component member of the
controlled group. Schedule O serves
to indicate that all members of the
controlled group:
• Are not adopting an apportionment
plan,
• Already have an apportionment
plan in effect,
• Are amending a previously adopted
apportionment plan,
• Are adopting an apportionment
plan, or
• Are terminating the existing
apportionment plan.
By filing this schedule, the
corporation consents to the adoption
or amendment of an apportion plan
by the controlled group and to the
allocation by the members of the
controlled group of certain tax benefit
items.
The apportionment plan (including
an amended plan) remains in effect
until it is terminated.

Who Must File
Schedule O must be filed by a
corporation with its income tax return,
amended return, or claim for refund (if
appropriate) for each tax year that it
is a member of the controlled group,
even if no apportionment plan in
effect. The common parent of a
consolidated group can file one
Schedule O for all the members of
the consolidated group with that
Schedule O containing the required
information for each member.

Parent-subsidiary group. A
parent-subsidiary group is one or
more chains of corporations
connected through stock ownership
with a common parent corporation if:
• Stock possessing at least 80% of
the total combined voting power of all
classes of stock entitled to vote or at
least 80% of the total value of shares
of all classes of stock of each of the
corporations, except the common
parent corporation, is directly or
indirectly owned by one or more of
the other corporations; and
• The common parent corporation
directly or indirectly owns stock
possessing at least 80% of the total
combined voting power of all classes
of stock entitled to vote or at least
80% of the total value of shares of all
classes of stock of at least one of the
other corporations, excluding, in
computing such voting power or
value, stock owned directly by such
other corporations.
For purposes of determining
whether a corporation is a member of
a parent-subsidiary controlled group
of corporations, within the meaning of
section 1563(a)(1), stock owned by a
corporation means:
• Stock owned directly by the
corporation, and
• Stock owned with the application of
section 1563(e)(1), (2), and (3).
Brother-sister group. A
brother-sister group is two or more
corporations if the same five or fewer
persons who are individuals, estates,
or trusts directly or indirectly own
stock possessing:
1. At least 80% of the total
combined voting power of all classes
of stock entitled to vote or at least
80% of the total value of shares of all
classes of the stock of each
corporation, and
2. More than 50% of the total
combined voting power of all classes
of stock entitled to vote or more than
50% of the total value of shares of all
classes of stock of each corporation,
Cat. No. 48211V

taking into account the stock
ownership of each such person only
to the extent such stock ownership is
identical with respect to each such
corporation.
The definition of brother-sister
group does not include (1) above, for
purposes of determining and
allocating the following.
• Taxable income brackets,
• Accumulated earnings credit,
• Alternative minimum tax exemption
amount,
• Phaseout of the alternative
minimum tax exemption amount, or
• The additional tax.
For purposes of determining
whether a corporation is a member of
a brother-sister controlled group of
corporations, within the meaning of
section 1563(a)(2), stock owned by a
person who is an individual, estate, or
trust means:
• Stock owned directly by such
person, and
• Stock owned with the application of
section 1563(e).
Combined group. A combined
group is three or more corporations
each of which is a member of a
parent-subsidiary group or a
brother-sister group, and one of
which is:
• A common parent corporation
included in a group of corporations in
a parent-subsidiary group, and also
• Included in a group of corporations
in a brother-sister group.
Life insurance companies. Two
or more insurance companies subject
to tax under section 801 which are
members of a parent-subsidiary,
brother-sister, or combined group of a
controlled group of corporations, will
be treated as a controlled group of
corporations separate from any other
corporations which are members of
the controlled group of corporations
as a parent-subsidiary, brother-sister,
or combined group. However, the
preceding sentence does not apply to
any life insurance company that is a
member (whether eligible or
ineligible) of a life-nonlife affiliated
group for which a section 1504(c)(2)

Page 2 of 3

Instructions for Schedule O (Form 1120)

14:47 - 27-NOV-2006

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

election is effective. Instead, such life
insurance company will be treated as
a member of the life-nonlife controlled
group (a deemed parent-subsidiary
controlled group).

Component member
A corporation is a component
member of a controlled group of
corporations on a December 31 of
any tax year (and with respect to the
tax year which includes such
December 31) if the corporation:
• Is a member of such controlled
group of corporations on the
December 31 included in the year
and is not treated as an excluded
member defined below, or
• Is not a member of the controlled
group of corporations on the
December 31 included in such year
but is treated as an additional
member as defined below.

Excluded members
A corporation which is a member of a
controlled group of corporations on
December 31 of any tax year will be
treated as an excluded member of
such group for the tax year including
such December 31 if such
corporation is:
• A member of such group for less
than one-half the number of days in
such tax year which precede such
December 31,
• Exempt from tax under section
501(a) (except a corporation which is
subject to tax on its unrelated
business taxable income under
section 511) for such tax year,
• A foreign corporation subject to tax
under section 881 for such tax year,
• An insurance company subject to
tax under section 801 (other than an
insurance company which is a
member of a controlled group
described above under Types of
controlled groups),
• A franchised corporation, as
defined in section 1563(f)(4), or
• An S corporation as defined in
section 1361.
In determining how many days a
corporation has been a member of a
controlled group, the group must take
into account the day it is sold or
liquidated, but does not take into
account either: (a) the day such
corporation is acquired or created, or
(b) the December 31 of such
corporation’s tax year.

Additional members
A corporation (other than an S
corporation) which (a) was a member
of a controlled group of corporations
at any time during a calendar year,

(b) is not a member of such group on
December 31 of such calendar year,
and (c) is not described, with respect
to such group, in section
1563(b)(2)(B),(C),(D), or (E), will be
treated as an additional member of
such group on December 31 for its
tax year including such December 31
if it was a member of such group for
one-half (or more) of the number of
days in such tax year which precede
such December 31.

Overlapping groups
If a corporation is a component
member of more than one controlled
group of corporations with respect to
any tax year, that corporation will be
treated as a component member of
only one controlled group. The
determination as to the group of
which such corporation is a
component member shall be made
under regulations prescribed by the
Secretary.

Excluded stock
The term “stock” does not include:
• Nonvoting stock which is limited
and preferred as to dividends,
• Treasury stock, and
• Stock which is treated as “excluded
stock” under section 1563(c)(2)(A) in
the case of a parent-subsidiary
controlled group or section
1563(c)(2)(B) in the case of a
brother-sister controlled group.

Unequal apportionment plan
Members of a controlled group can
elect an unequal apportionment plan
and divide the taxable income
brackets as they want. If any
members are also members of a
consolidated group, the consolidated
group will be treated as one
component member of the controlled
group for purposes of apportionment.
There is no need for consistency
among taxable income brackets. The
controlled group may apportion all,
some, or none of the taxable income
bracket amounts between its
members. However, the total amount
for all members cannot be more than
the total amount in each taxable
income bracket.

They do not elect an apportionment
plan. Therefore, each corporation is
entitled to:
• $25,000 (one-half of $50,000) on
Part II, Column (c),
• $12,500 (one-half of $25,000) on
Part II, Column (d), and
• $4,962,500 (one-half of
$9,925,000) on Part II, Column (e).

General Instructions for
Parts I, II, III, and IV
Component members of a
consolidated group. If several of
these component members are also
members of a consolidated group,
then with respect to those members
provide only the name, EIN (and if
necessary the tax year) of the
common parent of the group (and not
of the other members of that
consolidated group). Indicate that this
corporation is the parent of a group
and the number of members of that
consolidated group, not including the
parent.
No apportionment plan adopted
or in effect. If the component
members do not adopt an
apportionment plan or have an
apportionment plan in effect, they
must apportion all amounts equally
among themselves. For purposes of
the preceding sentence, if any
component members of a controlled
group of corporations are also
members of a consolidated group,
such members will be treated as
separate component members of the
controlled group.

Specific Instructions
Part I. Apportionment
Plan Information

Equal apportionment plan

Line 1. Type of controlled group. A
member of a controlled group must
check the applicable box to indicate
the type of group. The term
“controlled group” means any
parent-subsidiary group,
brother-sister group, or combined
group. See Definitions above.

If no apportionment plan is adopted
(or in effect), members of a controlled
group must divide the amount in each
taxable income bracket equally
among themselves (regardless of
whether any member is a member of
a consolidated group). For example,
Controlled Group AB consists of
Corporation A and Corporation B.

Note. The corporation is required
to provide information regarding
status of the group’s apportionment
plan. In connection with the
information provided, the corporation
may be required to indicate whether
all of the component members of the
controlled group are adopting,
amending, or terminating an

-2-

Page 3 of 3

Instructions for Schedule O (Form 1120)

14:47 - 27-NOV-2006

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

apportionment plan. If all the
members of a controlled group
complete a written agreement setting
forth the terms of the adopted or
amended apportionment plan (or an
agreement to terminate the previously
adopted plan), each member of the
group may rely on this agreement as
a basis for its answers to line 4. The
agreement must be signed by an
authorized person on behalf of each
component member of the controlled
group. Each member must retain as
part of its records either the original
or a copy of such agreement. The
agreement should contain the group’s
apportionment methodology (e.g.,
percentages) for each tax benefit
item.
Line 4. Status of apportionment
plan. A member of a controlled
group must check the applicable box
to indicate the status of the group’s
apportionment plan. If the group is
adopting an apportionment plan or
amending the current apportionment
plan for a prior tax year, there must
be at least one year remaining on the
statute of limitations for each member
of the group for assessing any
resulting deficiency. For more details,
see the instructions for line 5, below.
Line 5. Statute of limitations. An
apportionment plan may not be
adopted for a particular tax year
unless:
1. There is at least one year
remaining in the statutory period
(including any extensions thereof) for
the assessment of a deficiency
against the corporation, the tax
liability of which would be increased
by the adoption of such plan, or
2. If there is less than one year
remaining with respect to the
corporation, it has entered into an
agreement with the Service extending
the statutory period for the limited
purpose of assessing any deficiency
against that corporation attributable to
the adoption of the apportionment
plan.

Part II. Taxable Income
Apportionment
Columns (c) through (f). Enter
the member’s share of each taxable
income bracket as applicable.
Members of a controlled group are
entitled to one $50,000, one $25,000,
and one $9,925,000 taxable income
bracket amount (in that order) on
columns (c), (d), and (e). See Equal
apportionment plan and Unequal
apportionment plan above.
Column (c). Enter taxable income
(Form 1120, page 1, line 30, or the
comparable line of the corporation’s
income tax return) or the
corporation’s share of the $50,000
taxable income bracket, whichever is
less.
Column (d). Enter taxable income
(Form 1120, page 1, line 30, or the
comparable line of the corporation’s
income tax return) less the
corporation1s share of column (c) or
the corporation’s share of the
$25,000 taxable income bracket,
whichever is less.
Column (e). Enter taxable income
(Form 1120, page 1, line 30, or the
comparable line of the corporation’s
income tax return) less the
corporation’s share of columns (c)
and (d) or the corporation’s share of
the $9,925,000 taxable income
bracket, whichever is less.
Column (f). Enter taxable income
(Form 1120, page 1, line 30, or the
comparable line of the corporation’s
income tax return) less the
corporation’s share of columns (c)
through (e).

Part III. Income Tax
Apportionment
Columns (f) and (g). Members of
a controlled group are treated as one
group to figure the applicability of the

-3-

additional 5% tax and the additional
3% tax. If an additional tax applies,
each member will pay that tax based
on the part of the amount used in
each taxable income bracket to
reduce that member’s tax. See
section 1561(a).
Column (f). If the taxable income
of the controlled group exceeds
$100,000, enter this member’s share
of the smaller of: 5% of the taxable
income in excess of $100,000, or
$11,750.
Column (g). If the taxable income
of the controlled group exceeds $15
million, enter this member’s share of
the smaller of: 3% of the taxable
income in excess of $15 million, or
$100,000.

Part IV. Other
Apportionments
Column (b), Accumulated
Earnings Credit. The component
members of a controlled group of
corporations may allocate the amount
of the accumulated earnings
unequally if they adopt an
apportionment plan or have an
apportionment plan in effect.
If any component member of the
controlled group is a corporation
described in section 535(c)(2)(B), the
amount to be apportioned among the
component members is $150,000
(rather than $250,000).
Columns (c) and (d), AMT
Exemption Amount and Phase of
AMT Exemption Amount. In
applying section 55(d)(3), the
alternative minimum taxable income
of all component members shall be
taken into account and any decrease
in the exemption amount shall be
allocated to the component members
of the group in the same manner as
the exemption amount was allocated
to the members.