1120-C U. S. Income Tax Return for Cooperative Associations

Note: The draft you are looking for begins on the next page.

Caution: DRAFT—NOT FOR FILING
This is an early release draft of an IRS tax form, instructions, or publication,
which the IRS is providing for your information. Do not file draft forms and do
not rely on draft forms, instructions, and publications for filing. We do not
release draft forms until we believe we have incorporated all changes (except
when explicitly stated on this coversheet). However, unexpected issues
occasionally arise, or legislation is passed—in this case, we will post a new draft
of the form to alert users that changes were made to the previously posted draft.
Thus, there are never any changes to the last posted draft of a form and the
final revision of the form. Forms and instructions generally are subject to OMB
approval before they can be officially released, so we post only drafts of them
until they are approved. Drafts of instructions and publications usually have
some changes before their final release.
Early release drafts are at IRS.gov/DraftForms and remain there after the
final release is posted at IRS.gov/LatestForms. All information about all forms,
instructions, and pubs is at IRS.gov/Forms.
Almost every form and publication has a page on IRS.gov with a friendly
shortcut. For example, the Form 1040 page is at IRS.gov/Form1040; the Pub.
501 page is at IRS.gov/Pub501; the Form W-4 page is at IRS.gov/W4; and the
Schedule A (Form 1040/SR) page is at IRS.gov/ScheduleA. If typing in a link
above instead of clicking on it, be sure to type the link into the address bar of
your browser, not a Search box.
If you wish, you can submit comments to the IRS about draft or final forms,
instructions, or publications at IRS.gov/FormsComments. We cannot respond to
all comments due to the high volume we receive and may not be able to
consider many suggestions until the subsequent revision of the product.
If you have comments on reducing paperwork and respondent (filer) burden,
with respect to draft or final forms, please respond to the relevant information
collection through the Federal Register process; for more info, click here.

1120-C

Department of the Treasury
Internal Revenue Service

A Check if:
(1) Consolidated return
(attach Form 851)
(2) Schedule M-3 (Form
1120) attached
(3) Form 1120 filed in
previous tax year

U.S. Income Tax Return for Cooperative Associations

For calendar year 2021 or tax year beginning
▶

Please type or print

Form

, 2021, ending

OMB No. 1545-0123

2021

, 20

Go to www.irs.gov/Form1120C for instructions and the latest information.

Name

B Employer identification number

Number, street, and room or suite no. If a P.O. box, see instructions.

C
(1)

Check if:
Farmers’ tax exempt
cooperative . . .
(2) Nonexempt
cooperative . . .
Amended return

DRAFT AS OF
September 29, 2021
DO NOT FILE
Deductions (See instructions for limitations on deductions.)

Income

D

Check if:

(1)

City or town, state or province, country, and ZIP or foreign postal code

Initial return

(2)

Final return

(3)

Name change

(4)

Gross receipts or sales
b Less returns and allowances
Cost of goods sold (see instructions—attach Form 1125-A) . . . . . . . . .
Gross profit. Subtract line 2 from line 1c . . . . . . . . . . . . . . .
Dividends and inclusions (Schedule C, line 23) . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross rents and royalties . . . . . . . . . . . . . . . . . . . .
Capital gain net income (attach Schedule D (Form 1120)) . . . . . . . . . .
Net gain or (loss) from Form 4797, Part II, line 17 (attach Form 4797) . . . . . .
Other income (see instructions—attach statement) . . . . . . . . . . . .
Total income. Add lines 3 through 9
. . . . . . . . . . . . . . . .
Compensation of officers (attach Form 1125-E) . . . . . . . . . . . . .
Salaries and wages (less employment credits) . . . . . . . . . . . . .
Bad debts . . . . . . . . . . . . . . . . . . . . . . . . .
Rents . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes and licenses . . . . . . . . . . . . . . . . . . . . . .
Interest (see instructions) . . . . . . . . . . . . . . . . . . . .
Charitable contributions . . . . . . . . . . . . . . . . . . . . .
Depreciation not claimed on Form 1125-A or elsewhere on return (attach Form 4562)
Advertising . . . . . . . . . . . . . . . . . . . . . . . . .
Pension, profit-sharing, etc., plans . . . . . . . . . . . . . . . . .
Employee benefit programs
. . . . . . . . . . . . . . . . . . .
Section 199A(g) deduction (see instructions) . . . . . . . . . . . . . .
Other deductions (attach statement) . . . . . . . . . . . . . . . . .
Total deductions. Add lines 11 through 23 . . . . . . . . . . . . . .
Taxable income before adjustments and special deductions. Subtract line
24 from line 10 . . . . . . . . . . . . . . . . . . . .
25a
b Less: deductions and adjustments from Schedule H, line 5 . . . . .
25b
26
Less: a Net operating loss deduction (see instructions) . . . . . .
26a
b Special deductions (Schedule C, line 24) . . . . . . . .
26b

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

c Bal ▶
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . ▶
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . .
. . ▶

1c
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

25c
26c

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true,
correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Signature of officer

Paid
Preparer
Use Only

Date

Print/Type preparer’s name

Firm’s name

Preparer’s signature

▲

▲

Sign
Here

(5)

Address change

1a
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25a

May the IRS discuss this return
with the preparer shown below?
See instructions.
Yes
No

Title
Date

PTIN

Firm’s EIN ▶

▶

Firm’s address ▶

For Paperwork Reduction Act Notice, see separate instructions.

Check
if
self-employed

Phone no.
Cat. No. 47554F

Form 1120-C (2021)

Page 2

Form 1120-C (2021)

Tax, Refundable Credits, and Payments

27
28
29
30a
b
c
e
f
g
h
i
31
32
33
34

Taxable income. Subtract line 26c from line 25c. See instructions . . . . . . . . . . .
Total tax (Schedule J, line 9) . . . . . . . . . . . . . . . . . . . . . . .
Reserved for future use . . . . . . . . . . . . . . . . . . . . . . . . .
2020 overpayment credited to 2021 . . 30a
2021 estimated tax payments . . . . 30b
2021 refund applied for on Form 4466 . 30c (
) d Bal ▶
30d
Tax deposited with Form 7004
. . . . . . . . . . . . . .
30e
Credits: (1) Form 2439
(2) Form 4136
30f
Reserved for future use . . . . . . . . . . . . . . . . .
30g
Section 1383 adjustment (see instructions)
. . . . . . . . . .
30h
Reserved for future use . . . . . . . . . . . . . . . . .
30i
Estimated tax penalty. See instructions. Check if Form 2220 is attached . . . . . . . ▶
Amount owed. If line 30j is smaller than the total of lines 28 and 31, enter amount owed . . .
Overpayment. If line 30j is larger than the total of lines 28 and 31, enter amount overpaid . . .
Enter amount of line 33 you want: Credited to 2022 estimated tax ▶
Refunded ▶

27
28
29

DRAFT AS OF
September 29, 2021
DO NOT FILE
Schedule C
1

2

3

Dividends, Inclusions, and Special Deductions
(see instructions)

(a) Dividends
and inclusions

Dividends from less-than-20%-owned domestic corporations (other than
debt-financed stock) . . . . . . . . . . . . . . . . . .
Dividends from 20%-or-more-owned domestic corporations (other than
debt-financed stock) . . . . . . . . . . . . . . . . . .
Dividends on certain debt-financed stock of domestic and foreign
corporations . . . . . . . . . . . . . . . . . . . . .

4
5
6
7
8

Dividends on certain preferred stock of less-than-20%-owned public utilities
Dividends on certain preferred stock of 20%-or-more-owned public utilities
Dividends from less-than-20%-owned foreign corporations and certain FSCs
Dividends from 20%-or-more-owned foreign corporations and certain FSCs
Dividends from wholly owned foreign subsidiaries . . . . . . . .

9
10

Subtotal. Add lines 1 through 8. See instructions for limitations . . . .
Dividends from domestic corporations received by a small business
investment company operating under the Small Business Investment Act
of 1958 . . . . . . . . . . . . . . . . . . . . . .

11

Dividends from affiliated group members

12
13

Dividends from certain FSCs . . . . . . . . . . . . . . .
Foreign-source portion of dividends received from a specified 10%-owned
foreign corporation (excluding hybrid dividends) (see instructions) . . .
Dividends from foreign corporations not included on line 3, 6, 7, 8, 11, 12,
or 13 (including any hybrid dividends) . . . . . . . . . . . . .

14
15
16a

b
c
17
18
19
20
21
22
23
24

.

.

.

.

.

.

.

.

.

.

.

Reserved for future use . . . . . . . . . . . . . . . . .
Subpart F inclusions derived from the sale by a controlled foreign
corporation (CFC) of the stock of a lower-tier foreign corporation treated as
a dividend (attach Form(s) 5471) (see instructions) . . . . . . . .
Subpart F inclusions derived from hybrid dividends of tiered corporations
(attach Form(s) 5471) (see instructions) . . . . . . . . . . . .
Other inclusions from CFCs under subpart F not included on line 16a, 16b,
or 17 (attach Form(s) 5471) (see instructions) . . . . . . . . . .

30j
31
32
33
34

(b) %

(c) Special deductions
((a) × (b))

50

65
See
instructions

23.3
26.7
50
65
100
See
instructions

100
100
See
instructions
100

100

Global Intangible Low-Taxed Income (GILTI) (attach Form(s) 5471 and Form 8992)
Gross-up for foreign taxes deemed paid (see instructions) . . . . . .
IC-DISC and former DISC dividends not included on line 1, 2, or 3 . . .
Other dividends . . . . . . . . . . . . . . . . . . . .
Deduction for dividends paid on certain preferred stock of public utilities .
Section 250 deduction (attach Form 8993) . . . . . . . . . . .
Total dividends and inclusions. Add column (a), lines 9 through 20. Enter
here and on page 1, line 4 . . . . . . . . . . . . . . . ▶
Total special deductions. Add column (c), lines 9 through 13, 16, 21, and 22. Enter here and on page 1,
▶
line 26b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form 1120-C (2021)

Page 3

Form 1120-C (2021)

Schedule G

Allocation of Patronage and Nonpatronage Income and Deductions
Note: Before completing Schedule G, see Schedule K, Question 14.
(a) Patronage

1
2
3
4
5
6a
b
c
7

(b) Nonpatronage

1
2
3
4
5
6a
6b
6c

Gross receipts or sales . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . .
Gross profit. Subtract line 2 from line 1 . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . .
Total income. Combine lines 3 and 4 . . . . . . . . . . . . . . .
Section 199A(g) deduction (see instructions) . . . . . . . . . . . . .
Other deductions . . . . . . . . . . . . . . . . . . . . . .
Total deductions. Add lines 6a and 6b . . . . . . . . . . . . . . .
Taxable income before section 1382, NOL, and special deductions. Subtract line 6c
from line 5 . . . . . . . . . . . . . . . . . . . . . . . .
Deductions and adjustments under section 1382 from Schedule H, line 5 (see
instructions) . . . . . . . . . . . . . . . . . . . . . . . .

DRAFT AS OF
September 29, 2021
DO NOT FILE
8

9a
b
10
11
12
13

Deductions and Adjustments Under Section 1382 (see instructions)

Dividends paid on capital stock (section 521 cooperatives only) . . . . .
Nonpatronage income allocated to patrons (section 521 cooperatives only) .
Patronage dividends:
a Money . . . . . . . . . . . . . . . . . . . . . . . .
b Qualified written notices of allocation . . . . . . . . . . . . . .
c Other property (except nonqualified written notices of allocation) . . . .
d Money or other property (except written notices of allocation) in redemption
notices of allocation . . . . . . . . . . . . . . . . . . .

4
5

8
9a
9b
10
11
12
13

Net operating loss deduction (attach statement) . . . . . . . . . . . .
Special deductions (see instructions) . . . . . . . . . . . . . . . .
Taxable income. Subtract the total of lines 8, 9a, and 9b from line 7 . . . . .
Combined taxable income. Combine columns (a) and (b) of line 10. See instructions
Unused patronage loss (see instructions) . . . . . . . . . . . . . .
Unused nonpatronage loss (see instructions) . . . . . . . . . . . . .

Schedule H
1
2
3

7

.
.

.
.

.
.

.
.

.
.

.
.

.
.
.
of
.

. . . . . . .
. . . . . . .
. . . . . . .
nonqualified written
. . . . . . .

Section 199A(g) deduction allocated to patrons (see instructions) . . . . . . . . . .
Total. Combine lines 1 through 4. Enter here and on page 1, line 25b, and Schedule G, line 8 .

Schedule J

.
.

.
.

.
.

.
.

3a
3b
3c
3d
4 (
5

)

Tax Computation (see instructions)

1

Check if the cooperative is a member of a controlled group (attach Schedule O (Form 1120)).
See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶

2
3
4
5a
b
c
d
e
6
7
8

Income tax (see instructions) . . . . . . . . . . . . . .
Base erosion minimum tax amount (attach Form 8991) . . . . . .
Add lines 2 and 3 . . . . . . . . . . . . . . . . . .
Foreign tax credit (attach Form 1118)
. . . . . . . . . . .
Credit from Form 8834 (see instructions) . . . . . . . . . .
General business credit (attach Form 3800)
. . . . . . . . .
Credit for prior year minimum tax (attach Form 8827) . . . . . .
Bond credits from Form 8912 (attach Form 8912)
. . . . . . .
Total credits. Add lines 5a through 5e . . . . . . . . . . .
Subtract line 6 from line 4 . . . . . . . . . . . . . . .
Other taxes. Check if from:
Form 4255
Form 8611
Form 8902
Total tax. Add lines 7 and 8. Enter here and on page 2, line 28 . . .

9

1
2

.
.
.
.
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.
.

.

.

.
.
.

. . . . . . .
. . . . . . .
. . . . . . .
5a
5b
5c
5d
5e
. . . . . . . .
. . . . . . . .
Other (attach statement)
.

.

.

.

.

.

.

.

2
3
4

6
7
8
9
Form 1120-C (2021)

Page 4

Form 1120-C (2021)

Schedule K
1
a
b
c
2
a
b
c
d
3

Other Information (see instructions)

Check accounting method:
Cash
Accrual
Other (specify) ▶
See the instructions and enter the:
Business activity code no. ▶
Business activity ▶
Product or service ▶
Date of incorporation ▶
Check the accounting method used to compute
distributable patronage:

Yes No

Yes No

If checked, the cooperative may have to file Form
8281, Information Return for Publicly Offered
Original Issue Discount Instruments.
Enter the amount of tax-exempt income received or
accrued during the tax year (for example, interest or
extraterritorial income) ▶ $
11a Enter the number of foreign patrons at the end of
the tax year ▶
b Enter the total amount of patronage distributions
described in (or deducted under) IRC 1382(b) paid
or allocated to foreign patrons ▶

10

DRAFT AS OF
September 29, 2021
DO NOT FILE
a
b
c

4

5

6

7
8

Book
Tax
Other (specify) ▶
At the end of the tax year, did the cooperative
own, directly or indirectly, 50% or more of the
voting stock of a domestic corporation? (For
rules of attribution, see section 267(c).) . . .

If “Yes,” attach a statement showing: (a) name
and employer identification number (EIN), (b)
percentage owned, and (c) taxable income or
(loss) before NOL and special deductions of
such corporation for the tax year ending with or
within your tax year.
Is the cooperative a subsidiary in an affiliated
group or a parent–subsidiary controlled group?
If “Yes,” enter name and EIN of the parent
corporation ▶

At the end of the tax year, did any individual,
partnership, corporation, estate, or trust own,
directly or indirectly, 50% or more of the
cooperative’s voting stock? (For rules of
attribution, see section 267(c).) . . . . . .
If “Yes,” attach a statement showing name and
identifying number. Do not include any
information already entered in 5 above. Enter
percentage owned ▶
Enter the cooperative’s total assets. See
instructions ▶ $
At any time during the tax year, did one foreign
person own, directly or indirectly, at least 25%
of (a) the total voting power of all classes of
stock of the cooperative entitled to vote, or (b)
the total value of all classes of stock of the
cooperative? . . . . . . . . . . . .
If “Yes,” enter: (a) Percentage owned ▶
and (b) Owner’s country ▶
c The cooperative may have to file Form 5472,
Information Return of a 25% Foreign-Owned
U.S. Corporation or a Foreign Corporation
Engaged in a U.S. Trade or Business. Enter
number of Forms 5472 attached ▶

9

Check this box if the cooperative issued
publicly offered debt instruments with original
issue discount . . . . . . . . . ▶

12

If the cooperative has an NOL for the tax year and
is electing to forego the carryback period, check
here. See instructions . . . . . . . ▶

If filing a consolidated return, the statement required by
Regulations section 1.1502-21(b)(3) must be attached
or the election will not be valid.

Enter the available NOL carryover from prior tax
years. Do not reduce it by any deduction on page 1,
line 26a.
Patronage ▶ $
Nonpatronage ▶ $
Are the cooperative’s total receipts (page 1, line 1a
plus lines 4 through 9) for the tax year and its total
assets at the end of the tax year less than $250,000?

13

14

If “Yes,” the cooperative is not required to complete
Schedule G, L, M-1, or M-2. Instead, enter the total
amount of cash distributions and the book value of
property distributions (other than cash) made during
the tax year. ▶ $
Enter the amount of outstanding nonqualified
notices of allocation (attach statement) ▶

15
16

Does the cooperative have gross receipts of at least
$500 million in any of the 3 preceding tax years? (see
section 59A(e)(2) and (3)) . . . . . . . . .
If “Yes,” complete and attach Form 8991.

17

Did the cooperative have an election under section
163(j) for any real property trade or business or any
farming business in effect during the tax year? (see
instructions) . . . . . . . . . . . . .
Does the cooperative satisfy one or more of the
following? See instructions . . . . . . . .

18
a

The cooperative owns a pass-through entity with
current, or prior year carryover, excess business
interest expense.

b The cooperative’s aggregate average annual gross
receipts (determined under section 448(c)) for the 3
tax years preceding the current tax year are more
than $26 million and the cooperative has business
interest expense.
c The cooperative is a tax shelter and the cooperative
has business interest expense.
If “Yes” to any, complete and attach Form 8990.

Form 1120-C (2021)

Page 5

Form 1120-C (2021)

Schedule L

Balance Sheets per Books
Assets

Beginning of tax year
(a)

1
2a
b
3
4
5
6
7
8a
b
9a
b
10
11a
b
12
13

Cash . . . . . . . . . . .
Trade notes and accounts receivable .
Less allowance for bad debts . . .
Inventories . . . . . . . . .
Other current assets (attach statement)
Investments (see instructions) . . .
Loans to shareholders
. . . . .
Mortgage and real estate loans
. .
Buildings and other depreciable assets
Less accumulated depreciation . .
Depletable assets . . . . . . .
Less accumulated depletion
. . .
Land (net of amortization) . . . .
Intangible assets (amortizable only) .
Less accumulated amortization
. .
Other assets (attach statement) . .
Total assets . . . . . . . . .

14
15
16
17
18
19
20

Accounts payable . . . . . . . . . . . .
Mortgages, notes, bonds payable in less than 1 year
Other current liabilities (attach statement) . . . .
Loans from shareholders . . . . . . . . . .
Mortgages, notes, bonds payable in 1 year or more .
Other liabilities (attach statement) . . . . . . .
Capital stock:
a Preferred stock . . . . . .
b Common stock . . . . . .
Additional paid-in capital . . . . . . . . . .
Patronage dividends allocated in noncash form . .
Per-unit retains allocated in noncash form . . . .
Retained earnings—Appropriated (attach statement)
Retained earnings—Unappropriated . . . . . .
Adjustments to shareholders’ equity (attach statement)
Less cost of treasury stock . . . . . . . . .
Total liabilities and capital . . . . . . . . .

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

(

End of tax year

(b)

(c)

)

(

(d)

)

DRAFT AS OF
September 29, 2021
DO NOT FILE
(

)

(

)

(

)

(

)

(

)

(

)

Liabilities and Capital

21
22
23
24
25
26
27
28

Schedule M-1
1
2
3
4

(

Net income (loss) per books . . . .
Federal income tax per books . . .
Excess of capital losses over capital gains
Income subject to tax not recorded on
books this year (itemize):

7

Income recorded on books this year
not included in this tax return (itemize):
Tax-exempt interest $

8

Deductions in this tax return not charged
against book income this year (itemize):
a Depreciation . . . . $
b Charitable contributions $

Expenses recorded on books this year
not deducted in this return (itemize):
$
a Depreciation . . .
b Charitable contributions $
c Travel and entertainment $
Add lines 1 through 5 .

Schedule M-2
1
2
3

4

(

)

Reconciliation of Income (Loss) per Books With Income per Return
Note: The cooperative may be required to file Schedule M-3. See instructions.

5

6

)

.

.

.

.

.

9
10

Add lines 7 and 8 . . . . . . .
Income (page 1, line 25a)—line 6 less line 9

Analysis of Unappropriated Retained Earnings per Books (Schedule L, Line 25)

Balance at beginning of year
Net income (loss) per books .
Other increases (itemize):

Add lines 1, 2, and 3 .

.

.

.
.

.

.
.

.

.
.

.

5

6
7
8

a Cash . . . . .
b Stock . . . . .
c Property . . . .
Other decreases (itemize):
Add lines 5 and 6 . . . . . . .
Balance at end of year (line 4 less line 7)
Distributions:

Form 1120-C (2021)