Form 8916

What is IRS Form 8916?

The Internal Revenue Service (IRS) Form 8916 is a document used primarily by corporations for the purpose of adjusting or reconciling financial accounting net income (loss) per income statement of the corporation's taxable income. This form is also known as "Adjustments to Financial Accounting Net Income (Loss) per Income Statement of Inclusion Corporations". As such, IRS Form 8916 plays a vital role in ensuring transparency and accuracy in the reporting of a corporation's income and taxation.

Who needs to use tax form 8916?

If you're wondering whether you need to use tax form 8916, the answer lies within the nature of your business. Generally, corporations, including S corporations, that keep their books and records on the basis of an accounting period are required to fill out Form 8916. These corporations are typically those who have an inclusion year, defined by the IRS as the tax year of an applicable financial statement or a tax year specified by the Secretary.

How to Fill Out IRS Form 8916

Completing IRS form 8916 requires a meticulous review of your financial accounting net income or loss. It involves several steps, starting with reporting the net income or loss as per the corporation's financial accounting records.

This amount is then adjusted for various items, such as tax-exempt interest, federal income tax, and excess of capital losses over capital gains, among other things. The sum of these adjustments gives the "Reconciliation total."

The next steps involve the deduction of dividends received, interest income attributable to certain notional principal contracts, and income attributable to certain reverse hybrid entities, which results in the calculation of the corporation's taxable income.

Finally, remember to attach IRS form 8916 to your corporate income tax return. Ensure to check for any changes in the IRS regulations or requirements regarding Form 8916, as these can change from year to year.