2017 C-corporation tax return. I need some who will check my work and also complete Schedule D and M-3.
1 Inventory at beginning of year . . . . . . . . . . . . . . . . . . . . .
2 Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 Cost of labor . . . . . . . . . . . . . . . . . . . . . . . . . .
4 Additional section 263A costs (attach schedule) . . . . . . . . . . . . . . . .
5 Other costs (attach schedule) . . . . . . . . . . . . . . . . . . . . .
6 Total. Add lines 1 through 5 . . . . . . . . . . . . . . . . . . . . . .
7 Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . .
8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on Form 1120, page 1, line 2 or the appropriate line of your tax return. See instructions . . . . . . . . . . . . . . .
9a Check all methods used for valuing closing inventory:
(i) Cost
(ii) Lower of cost or market
(iii) Other (Specify method used and attach explanation.) ▶
b Check if there was a writedown of subnormal goods . . . . . . . . . . . . . . . . . . . .
c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) . . . .
d If the LIFO inventory method was used for this tax year, enter amount of closing inventory computed
. .
. .
▶
▶
under LIFO . . . . . . . . . . . . . . . . . . . . . . . . . . . 9d
e If property is produced or acquired for resale, do the rules of section 263A apply to the entity? See instructions . . Yes No
f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If “Yes,”
attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes
No
Section references are to the Internal Revenue Code unless otherwise noted.
General Instructions
Purpose of Form
Use Form 1125 -A to calculate and deduct cost of goods sold for certain entities.
Who Must File
Filers of Form 1120, 1120 -C, 1120 -F, 1120S, 1065, or 1065 -B, must complete and attach Form 1125 -A if the applicable entity reports a deduction for cost of goods sold.
Inventories
Generally, inventories are required at the beginning and end of each tax year if the production, purchase, or sale of merchandise is an income -producing factor. See Regulations section 1.471 -1. If inventories are required, you generally must use an accrual method of accounting for sales and purchases of inventory items.
Exception for certain taxpayers. If you are a qualifying taxpayer or a qualifying small business taxpayer (defined below), you can adopt or change your accounting method to account for inventoriable items in the same manner as materials and supplies that are not incidental.
Under this accounting method, inventory costs for raw materials purchased for use in producing finished goods and merchandise purchased for resale are deductible in the year the finished goods or merchandise are sold (but not before the year you paid for the raw materials or merchandise, if you are also using the cash method).
If you acco unt for inventoriable items in the same manner as materials and supplies that are not incidental, you can currently deduct expenditures for direct labor and all indirect costs that would otherwise be included in inventory costs. See the instructions for li nes 2 and 7.
For additional guidance on this method of accounting, see Pub. 538, Accounting Periods and Methods. For guidance on adopting or changing to this method of accounting, see Form 3115, Application for Change in Accounting Method, and its instruct ions.
Qualifying taxpayer. A qualifying taxpayer is a taxpayer that, (a) for each prior tax year ending after December 16, 1998, has average annual gross receipts of $1 million or less for the 3 prior tax years, and (b) its business is not a tax shelter (as defined in section 448(d)(3)). See Rev. Proc. 2001 -10, 2001 -2 I.R.B. 272.
Qualifying small business taxpayer. A qualifying small business taxpayer is a taxpayer that, (a) for each prior tax year
ending on or after December 31, 2000, has average annual g ross receipts of $10 million or less for the 3 prior tax years, (b) whose principal business activity is not an ineligible activity, and (c) whose business is not a tax shelter (as defined in section 448 (d)(3)). See Rev. Proc. 2002 -28, 2002 -18 I.R.B. 815.
Uniform capitalization rules. The uniform capitalization rules of section 263A generally require you to capitalize, or include in inventory, certain costs incurred in connection with the following.
• The production of real property and tangible personal pro perty held in inventory or held for sale in the ordinary course of business.
• Real property or personal property (tangible and intangible) acquired for resale.
• The production of real property and tangible personal property by a corporation for use in its trade or business or in an activity engaged in for profit.
See the discussion on section 263A uniform capitalization rules in the instructions for your tax return before completing Form 1125 -A. Also see Regulations sections 1.263A -1 through 1.263A -3. See Regulations section 1.263A -4 for rules for property produced in a farming business.
For Paperwork Reduction Act Notice, see instructions. Cat. No. 55988R Form 1125 -A (Rev. 10 -2016)
Form 1125 -A
(Rev. October 2016)
Department of the Treasury Internal Revenue Service
Cost of Goods Sold
▶ Attach to Form 1120, 1120 -C, 1120 -F, 1120S, 1065, or 1065 -B. ▶ Information about Form 1125 -A and its instructions is at www.irs.gov/form1125a.
OMB No. 1545 -0123
Name Employer identification number
1 2,125,000
2 4,675,000
3
4
5
6
7 (2,975,000)
8 3,825,000
