Note:

The TC 971 AC 114 will reflect an amount of 0 for Forms 1120-S and 1065 because no IRC 965 tax is assessed on the returns.

For returns with an IRC 965(i) election made on Form 1041 (MFT 05), the IRC 965(i) deferral is for both the assessment and payment of the IRC 965 tax amount. In the case of an IRC 965(i) election on Form 1041, there will be a TC 971 AC 114 for zero input on the module for the year of inclusion. The 965(i) election deferral will remain intact until a triggering event occurs at which time the tax is assessed. A TC 971 AC 165 should be input on the 965(i) inclusion year tax module and on every Form 1041 tax year module thereafter until the year of the triggering event when the IRC 965 liability is assessed. The TC 971 AC 165 is input as a way on monitoring these accounts since the tax has not been charged.