IRS releases draft form 1120-F and schedule M-3 and instructions.

• Author: Sherr, Eileen

IRS Releases Draft form 1120-F and Schedule M-3 and Instructions by Eileen Sherr, CPA, M. Tax., AICPA Technical Manager--Taxation, Washington, DC

The IRS recently released draft versions of revised Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, for 2007 and related schedules, including a new Schedule M-3, Net Income (Loss) Reconciliation for Foreign Corporations with Reportable Assets of $10 Million or More. The new Form 1120-F, Schedule M-3, will be required for taxpayers with $10 million or more in total reportable assets filing that form for tax years ending after December 30, 2007 (see www.irs.gov/businesses/corporations/ artide/0,,id=169814,00.html for the draft form and instructions and related information).

Three other new schedules far Form 1120-F include:

* Schedule H, Deductions Allocated to Effectively Connected Income Under Regulations Section 1.861-8;

* Schedule I, Interest Expense Allocation Under Regulations Section 1.882-5; and

* Schedule P, List of Foreign Partner Interest in Partnerships.

The new form and schedules will provide increased disclosure of large corporations' income and expense...