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Form 1120-FSP: 1120-FSC (Schedule P)
IRS Form 1120-FSC is used to report transfer prices or commissions for a Foreign Supplier Company (FSC). The form requires calculating the FSC profit using methods like multiplying by 1.83% of foreign trading gross receipts.
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IRS Form 1120-FSP - 1120-FSC (Schedule P)
IRS Form 1120-FSC is used to report transfer prices or commissions for a Foreign Supplier Company (FSC). The form requires calculating the FSC profit using methods like multiplying by 1.83% of foreign trading gross receipts.
Risk Radar
Scan points- 1If electing a grouping basis in Section B, aggregate reporting is not permitted.
- 2Failing to attach an explanation if Part II Line 20 spans more than one line on Form 1120-FSC.
- 3Failing to attach an explanation if Part III Line 23 spans more than one line on Form 1120-FSC.
- 4If electing a grouping basis, confirming that aggregate reporting is not permitted in Section B.
- 5Confirming the small FSC status requires foreign trading gross receipts of $5 million or less for the tax year.
Plain English
This form helps report the pricing and commissions received when a company sells goods or services through an affiliated entity operating overseas. It ensures that transfers of funds are reported correctly to the IRS, particularly concerning foreign trade activities conducted by related suppliers.
Submission Date
- Filing date: 2017-09-16 08:04:01
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when reporting a transfer price or commission for a Foreign Supplier Company (FSC).
- Do not use it when filing information unrelated to an FSC's transfer price or commission.
- Check Form 1120-FSC instead when the purpose is related to the foreign supplier company.
Deadline or filing window
Not stated in the official source.
Checklist
What you need before filling it out
Product or product line
The specific description for reporting · Form 1120-FSC, Part I
Basis of reporting (Transaction-by-transaction)
Supporting schedule detailing all transactions if separate filing is chosen · Instructions on page 2 and related schedules
Transfer Price or Commission amount
Specific dollar amounts calculated for the tax year's sales/services · Form 1120-FSC, Part II (Line 20) and Part III (Line 23)
Gross receipts of related supplier and FSC or controlled group
Total foreign and domestic sales amounts for the product line/period · Form 1120-FSC, Part I (Line 7)
Cost of goods sold attributable to property sold
Costs related directly to the physical goods sold by the supplier or FSC · Form 1120-FSC, Part I (line 8a)
Before you submit
- 1Attach Schedule P to Form 1120-FSC.
- 2Determine if foreign trading gross receipts exist from the resale of export property or disposition of services for which the FSC acted as commission agent.
- 3If using a tabular schedule, ensure it is in spreadsheet or similar format and lists the taxpayer’s name and EIN on each numbered page.
- 4Check box 1b to indicate that aggregate reporting of transactions is selected.
- 5Check box 1c to report all transactions using a tabular schedule rather than aggregating.
- 6If electing group of transactions, check box 2 of item B and attach a corresponding tabular schedule.
- 7Complete the Schedule P with only the taxpayer’s name and EIN at the top when utilizing an alternate format (tabular or aggregate).
- 8Ensure that if grouping redeterminations are made, they are completed no later than 1 year after the due date of the FSC’s timely filed Form 1120-FSC.
How to file this form
- 1Determine whether to report transactions by 'Transaction-by-transaction,' 'Group of transactions,' or using the tabular schedule option, and complete the necessary boxes on Form 1120-FSC.
- 2Calculate gross receipts of related supplier and FSC or controlled group (Line 7), and subtract all applicable costs and expenses to determine the reported profit.
- 3If electing to use a grouping basis for transactions, complete one Schedule P with only the taxpayer’s name and EIN entered, and attach a tabular schedule reporting information as if a separate Schedule P were filed for each group of transactions.
- 4Attach the completed Schedule P to Form 1120-FSC, ensuring that all supplemental schedules (like the supporting schedule for aggregate reports) are properly attached.
Known limitations
- 1If the transaction is with an unrelated supplier, the FSC bases its profit on the arm’s-length price.
- 2The form is not required if the related supplier chooses to use either the 23% or 1.83% methods for transfer pricing.
- 3If a grouping basis is elected by the related supplier, aggregate reporting of transactions is prohibited.
- 4A small FSC electing under section 922(b) with foreign trading gross receipts of $5 million or less may file a separate Schedule P for each group of transactions instead of using a tabular schedule.
Field map
Compact field-by-field guide
Entity Info
2 items
Full legal name of the corporation and its Employer Identification Number.
Current mailing address and date of incorporation.
Income
3 items
Total revenue from business operations before deducting costs.
Direct costs attributable to producing goods sold by the corporation.
Gross receipts minus cost of goods sold and returns/allowances.
Deductions
1 items
Sum of all business expenses including compensation, rent, interest, taxes, and depreciation.
Tax
2 items
Total income minus total deductions.
Tax calculated on taxable income using the applicable corporate tax rate, minus any credits.
Signatures
1 items
An authorized corporate officer must sign and date the return.
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Fillable formOpen in Editor->The current edition is Rev. September 2017, and filers should visit www.irs.gov/Form1120FSC for the latest information.
What changed or needs a fresh check
- Edition date — confirm the form is Rev. September 2017.
- Fee — Not stated in the official source
- Mailing address — Not stated in the official source
- Signature — Confirmation of filing or signing requirements are not detailed in the provided excerpts.
Quick Facts
Downloads
After you file
- 1Keep the supporting schedule that contains all information reported, even if it was not filed with Schedule P.
- 2The attached tabular schedule must be formatted in columns corresponding to items A, C, and each line item in Parts I, II, and III of Schedule P.
- 3If grouping redeterminations are made, they must be completed no later than 1 year after the due date of the FSC’s timely filed Form 1120-FSC.
- 4The form requires attaching Schedule P to Form 1120-FSC.
Sources
- SRCInstructions p.1 — The form requires attaching Schedule P to Form 1120-FSC.
- SRCInstructions p.1 — The OMB Number for this form is 1545-0123.
- SRCInstructions p.1 — The title of the document is Schedule P (Form 1120-FSC) (Rev. September 2017).
- SRCInstructions p.2 — Do not complete Schedule P if section 482 method of transfer pricing is used and both the 23% and 1.83% methods do not apply or related supplier does not choose to use them.
- SRCInstructions p.2 — If transactions are incomplete at year-end, the transfer price must be the supplier’s cost of goods sold for property bought from a related supplier.
- SRCInstructions p.2 — A product or product line can be entered using the principal product based on NAICS or a recognized industry or trade use.
- SRCInstructions p.2 — If grouping of transactions is elected, aggregate reporting is not permitted.
- SRCInstructions p.2 — If the FSC has foreign trading gross receipts of $5 million or less for the tax year and elects to be a small FSC under section 922(b), it may file a separate Schedule P for each group of transactions.
Common confusion points
How do I report the 'Product or product line' in item A?
Enter the principal product based on the North American Industry Classification System (NAICS) or a recognized industry or trade use.
→ Use either the NAICS code or a general industry/trade name.
Can I group transactions and still aggregate them?
No, if grouping of transactions is elected, aggregate reporting is not permitted.
→ If you choose to group by product line, you must use a tabular schedule format.
What are the filing requirements for a small FSC?
A small FSC may file a separate Schedule P for each group of transactions instead of using a tabular schedule.
→ Confirm the foreign trading gross receipts are $5 million or less and that you elected to be a small FSC under section 922(b).
What must I include if I use a tabular schedule?
The attached tabular schedule must list the taxpayer’s name and EIN on each numbered page, and the columns must correspond to items A, C, and every line item in Parts I, II, and III of Schedule P.
→ Ensure all required totals are shown in each column.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Grouping redeterminations must be completed within one year after the due date of Form 1120-FSC.
Questions about IRS Form 1120-FSP
What is IRS Form 1120-FSP used for?
This form helps report the pricing and commissions received when a company sells goods or services through an affiliated entity operating overseas. It ensures that transfers of funds are reported correctly to the IRS, particularly concerning foreign trade activities conducted by related suppliers.
Who must file IRS Form 1120-FSP?
The Foreign Supplier Company (FSC) files Form 1120-FSC when reporting transfer prices or commissions related to its operations.
What information does IRS Form 1120-FSP require?
The form collects details on the FSC’s name and EIN, the basis of reporting in Section B, calculated profit using lines 15, 16, or 17, transfer price from related suppliers (Part II, Line 20), and commissions (Part III, Line 23).
Where do I file IRS Form 1120-FSP?
The form can be accessed for the latest information at www.irs.gov/Form1120FSC.
How do I complete IRS Form 1120-FSP?
The filer must determine the basis of reporting in Section B before calculating the profit on line 17 using methods like multiplying by 1.83% or 46%. Finally, Part II and Part III require entering amounts from related suppliers; an explanation must be attached if these amounts span more than one line.
What happens if IRS Form 1120-FSP is filed incorrectly?
Failure to follow specific methods may subject the transfer price for a sale by the related supplier to section 482 and its regulations.
How do I report the 'Product or product line' in item A?
Enter the principal product based on the North American Industry Classification System (NAICS) or a recognized industry or trade use. Use either the NAICS code or a general industry/trade name.
Can I group transactions and still aggregate them?
No, if grouping of transactions is elected, aggregate reporting is not permitted. If you choose to group by product line, you must use a tabular schedule format.
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