Schedule Q (Form 1120-IC-DISC), Borrower's Certificate of Compliance With the Rules for Producer's Loans, is an Internal Revenue Service (IRS) schedule on which a borrower certifies that a loan received from an IC-DISC qualifies as a producer's loan. It is attached to Form 1120-IC-DISC and is signed by an officer under penalties of perjury. On FillingPDF you can fill out the form online and download or print the completed PDF; the form and the separate instructions for Form 1120-IC-DISC are published by the IRS at www.irs.gov/form1120icdisc.
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What is Form 1120-IC-DISC (Schedule Q)?
Schedule Q (Form 1120-IC-DISC), Borrower's Certificate of Compliance With the Rules for Producer's Loan, is the IRS schedule in which a borrower certifies, under penalties of perjury, that a loan received from an IC-DISC qualifies as a producer's loan.
The certificate has two tests. A. Limitation Rule says the loan, added to the unpaid balance of the borrower's other qualified producer's loans outstanding when the loan was made, may not exceed a ceiling built from lines 1a, 1b and 1c: the adjusted basis in plant, machinery, equipment and supporting production facilities in the United States, plus property held primarily for sale, lease or rental to customers, plus research and experimental expenditures under section 174, multiplied by the percentage described in item 2. B. Increased Investment Requirement says the loan, added to the unpaid balance of the borrower's producer's loans made during its tax year, may not exceed the increase in the adjusted basis of those assets during the year plus the year's research and experimental expenditures in the United States.
The form's own note explains its role: an IC-DISC may establish that the borrower met the limitation and increased investment requirements of sections 993(d)(2) and (3) by attaching either Schedule Q or a written statement of compliance certified by a certified public accountant. The schedule is not a return: it is an attachment to Form 1120-IC-DISC and carries OMB No. 1545-0123.
Who needs to file Form 1120-IC-DISC (Schedule Q)?
An IC-DISC that has made a producer's loan and files Form 1120-IC-DISC may attach Schedule Q (Form 1120-IC-DISC) to show that the borrower met the limitation and increased investment requirements of sections 993(d)(2) and (3). The borrower supplies the information, and an officer signs the certification, which is written in the first person ("our") and made under penalties of perjury.
Schedule Q is one of two options printed in the form's note. The other is a written statement of compliance of the borrower certified by a certified public accountant. If the IC-DISC uses that statement, Schedule Q is not needed for the same showing.
The form identifies two parties: the IC-DISC, with its employer identification number, and the borrower, with its employer identification number and address. Each loan that the IC-DISC wants to support is certified by the borrower named on the schedule.
When to file Form 1120-IC-DISC (Schedule Q)
Schedule Q (Form 1120-IC-DISC) is attached to Form 1120-IC-DISC, so it is due whenever that return is filed. It has no separate due date printed on it. The schedule is tied to the IC-DISC's tax year, which you enter at the top as "For tax year beginning ... and ending ...", and the borrower's tests refer to the tax year in which the loan was made. For the due date and any extension of Form 1120-IC-DISC, see the separate instructions for that form at www.irs.gov/form1120icdisc.
How to fill out Form 1120-IC-DISC (Schedule Q)
Enter the tax year
At the top, fill in "For tax year beginning" and "ending" with the IC-DISC's tax year covered by the Form 1120-IC-DISC the schedule will accompany.
Identify the IC-DISC
Enter the Name of IC-DISC and its employer identification number in the first name and EIN row.
Identify the borrower
Enter the Name of borrower and the borrower's employer identification number, then the address (number and street) and the city or town, state or province, and ZIP or foreign postal code.
Read the certification
The statement beginning "Under penalties of perjury, I certify that the loan received from the above-mentioned IC-DISC qualifies as a producer's loan" applies to the two tests below, so confirm both before signing.
Complete the Limitation Rule lines
Under A. Limitation Rule, enter the amounts for lines 1a (adjusted basis in U.S. plant, machinery, equipment and supporting production facilities), 1b (property held for sale, lease or rental) and 1c (section 174 research and experimental expenditures). Then enter the item 2 percentage based on the 3 preceding tax years.
Complete the Increased Investment lines
Under B. Increased Investment Requirement, enter the amount for item 1 (the increase in adjusted basis of the 1a and 1b assets during the tax year of the loan) and item 2 (research and experimental expenditures in the United States during that tax year).
Sign, date and print name
An officer signs on the signature line, enters the Date (MM/DD/YYYY) and types or prints the name and title.
Review and download the PDF
Check names, employer identification numbers and amounts against the loan records, then download or print the completed PDF from FillingPDF and attach it to Form 1120-IC-DISC.
How to submit Form 1120-IC-DISC (Schedule Q)
Schedule Q (Form 1120-IC-DISC) is not sent on its own: it is attached to Form 1120-IC-DISC, as the form directs ("Attach to Form 1120-IC-DISC"). It prints no mailing address, portal or appointment rule.
- With the return: include the signed schedule with Form 1120-IC-DISC and submit the package by the channel that applies to that return.
- Where to look: the form points to www.irs.gov/form1120icdisc for information about Form 1120-IC-DISC and its separate instructions, including how and where the return is filed.
Before attaching, check that the IC-DISC and borrower names and employer identification numbers are entered and that an officer has signed and dated the certification. FillingPDF lets you fill out and download the PDF; submission follows the IRS channels that apply to Form 1120-IC-DISC.
Common mistakes to avoid
- Filing Schedule Q (Form 1120-IC-DISC) separately instead of attaching it to Form 1120-IC-DISC, as the form directs.
- Leaving the officer's signature, the date in MM/DD/YYYY format, or the printed name and title blank on a certification made under penalties of perjury.
- Entering the IC-DISC's employer identification number in the borrower's line, or the reverse; the form has a separate name and EIN line for each.
- Forgetting the unpaid balance of the borrower's other qualified producer's loans outstanding when the loan was made, which the Limitation Rule adds to this loan.
- Omitting research and experimental expenditures under section 174 from line 1c, which counts such expenditures in the United States for all preceding tax years beginning after December 31, 1971.
- Using receipts from the wrong period for item 2, which looks at the 3 tax years immediately preceding the tax year in which the loan was made.
- Attaching both Schedule Q and a CPA statement for the same showing, when the note offers them as alternatives (a) or (b).
Frequently asked questions
What is Schedule Q (Form 1120-IC-DISC)?
It is the IRS Borrower's Certificate of Compliance With the Rules for Producer's Loans, attached to Form 1120-IC-DISC. The borrower certifies under penalties of perjury that a loan from the IC-DISC qualifies as a producer's loan under the limitation and increased investment rules.
Do I have to attach Schedule Q (Form 1120-IC-DISC)?
The form's note offers two ways to establish compliance with sections 993(d)(2) and (3): attach Schedule Q, or attach a written statement of compliance of the borrower certified by a certified public accountant. Either one can be used.
Where do I file Schedule Q (Form 1120-IC-DISC)?
Attach it to Form 1120-IC-DISC. The schedule prints no address of its own, so it is submitted with that return. The IRS publishes information and the separate instructions at www.irs.gov/form1120icdisc.
Who signs Schedule Q (Form 1120-IC-DISC)?
An officer signs on the line marked Signature of officer, adds the date in MM/DD/YYYY format, and types or prints a name and title. The certification is made under penalties of perjury and speaks in the first person for the borrower.
What are the two tests on Schedule Q (Form 1120-IC-DISC)?
A. Limitation Rule caps the loan, plus other outstanding qualified producer's loans, at a ceiling based on lines 1a to 1c and the item 2 percentage. B. Increased Investment Requirement caps the loan, plus producer's loans made that year, at the asset basis increase plus that year's research expenditures.
When is Schedule Q (Form 1120-IC-DISC) due?
It has no separate due date: it travels with Form 1120-IC-DISC and is filed when that return is filed. Check the separate instructions for Form 1120-IC-DISC at www.irs.gov/form1120icdisc for the return's deadline.
Can I fill out Schedule Q (Form 1120-IC-DISC) online?
Yes. You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not file the schedule with the IRS; you attach it to Form 1120-IC-DISC and submit through the IRS channels.
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