Table of Contents
On page 1, enter the name and employer identification number (EIN) of the component member filing this Schedule O.
In Part II, column (a), line 1, enter the name and EIN. In column (b), enter the ending date of the tax year (Yr-Mo) of the member filing this Schedule O. In Parts III and IV, column (a), line 1, enter only the name of the member filing this Schedule O. For Parts II, III, and IV, enter the corresponding information for each of the other members of the controlled group in column (a) on lines 2 through 10, in the same manner as the member filing this Schedule O. If more space is needed, attach additional sheets. If several component members are also members of a single consolidated group, then with respect to those members provide only the information of the common parent of the consolidated group in Parts II, III, and IV, column (a).
If one or more component members are also members of a consolidated group, the parent of such consolidated group may file only one form Schedule O on behalf of all such members. Such form must contain the required information for each such member. See Temporary Regulations section 1.1561-3T(a)(2).
For a brother-sister controlled group, check box 1b whether that group is a brother-sister group for purposes of applying only the 50% test, or for purposes of applying both the 80% and 50% test.
If all the members consent to amend an apportionment plan, check box 3b. By checking box 3b this corporation is consenting to the amendment of an apportionment plan and is also representing that the other members of the group are consenting to the amendment of that plan. However, to amend a plan both of the following conditions must be satisfied.
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The controlled group already has an apportionment plan in effect, and
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There has been no change in the component-member composition of the group from the previous taxable year.
If the component members of a group are either adopting a new apportionment plan or amending an existing apportionment plan that involves prior tax years of those component members, at least one year must remain on each of the statutes of limitations for assessing a tax deficiency against any of the component members of the group a for such prior tax years. See the instructions for line 5 below.
If all the members consent to terminate (or are deemed to have consented to the termination of) an apportionment plan:
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Check box 3c, if the remaining members choose not to adopt (or are not able to adopt) a new apportionment plan, or
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Check box 3d, if the remaining members choose to adopt a new apportionment plan.
With regard to box 3c, the remaining members will not be able to adopt a new apportionment plan if, for example, such component members have left the group.
Corporations X, Y, and Z are members of a controlled group and each has a calendar tax year. On August 31, 2008, X is sold to an unrelated party. Even though X will not be a member of the group on its December 31, 2008, testing date, it is treated as an additional member of the group on that date. Consequently, for 2008 the XYZ controlled group must apportion the tax benefit items according to the terms of its apportionment plan. Therefore, X, Y, and Z would each check box 3c on its 2008 Schedule O.
If box 3c or 3d is checked, complete Parts II, III, and IV under the following circumstances.
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If a corporation who is joining or leaving the group still qualifies as a component member (including as an additional member) for its tax year, complete Parts II, III, and IV according to the terms of any applicable apportionment plan, or
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If a corporation who is joining or leaving the group will not qualify as a component member (including as an additional member) for its tax year then, following the corporation's name in column (a), enter the notation “(E)” for excluded member. In Part II, column (b), enter the ending date of the tax year (Yr-Mo) and enter “0” in the remaining columns, as are applicable. The remaining component members of the group will apportion the various tax items according to terms of any newly adopted apportionment plan, in the event a new apportionment plan is adopted by those remaining members.
Note.
Do not check more than one box on line 3. If a corporation does not adopt an apportionment plan, amend a previous apportionment plan, or terminate an existing apportionment plan, skip line 3 and go to line 4.
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Check box 4a, if the controlled group does not have an apportionment plan in effect and is not adopting one.
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Check box 4b, if the controlled group already has an apportionment plan in effect and is not amending or terminating this plan.
If a corporation does not know the combined taxable income of the members of its group (for example, because the members are on substantially different tax years), it can avoid underpayment of tax by applying the maximum tax rate of 35% to the entire amount of its taxable income. If the corporation later determines its tax liability is less, it may file a claim for refund of overpayment.
A corporation choosing to compute its tax liability by applying the maximum 35% rate to the entire amount of its taxable income should check box 6a. Further, a corporation checking box 6a does not have to provide taxable income or tax apportionment information with respect to the other members of the group. Instead, only provide the identifying information (for example, name, EIN, and ending date of the tax year), for these other members. Enter zero in the other columns for these members.
The controlled group may elect to apportion their additional tax liability under the FIFO method, rather than the proportionate method. To make this election, each member of the group must check box 6b. See The FIFO method on page 6 and The proportionate method on page 5.
If the members do not check box 6b, they will be required to apportion their additional tax liability using the proportionate method of allocation.
Enter each member's share of the taxable income used from each tax bracket, as is applicable. The component members of a controlled group, collectively, are entitled to one $50,000, one $25,000 and one $9,925,000 taxable income bracket amount (in that order) for columns (c), (d), and (e).
Note.
If a corporation has a loss, enter zero in columns (c) through (g).
Note.
Do not include on Schedule O an apportionment among the component members of any deduction for certain depreciable property for which a section 179 expense election has been made. Report this apportionment as required under section 179. See Regulations section 1.179-2(b)(7).
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