PCs are taxed by the corporate tax structure. This is a two-level tax system as PCs' profits are taxed at the company level and again at the shareholders' level. The IRS levies a 35 percent flat tax rate on PCs profits and then they're distributed to shareholders in the form of dividends.

Generally, the taxation of PCs and PLLCs is the same as standard corporations and limited liability companies (LLCs). PCs are taxed like C corporations (unless they make the S corporation election).

C corporations: C corps are separately taxable entities. They file a corporate tax return (Form 1120) and pay taxes at the corporate level. They also face the possibility of double taxation if corporate income is distributed to business owners as dividends, which are considered personal taxable income.

Schedule O (Form 1120), Consent Plan and Apportionment Schedule for a Controlled Group. A corporation that is a component member of a controlled group must use Schedule O (Form 1120) to report the apportionment of taxable income, income tax, and certain tax benefits between all component members of the group.

Purpose of Form Use Form 1120-PC, to report the income, gains, losses, deductions, and credits, and to figure the income tax liability of insurance companies, other than life insurance companies.

Every domestic nonlife insurance company and every foreign corporation that would qualify as a nonlife insurance company subject to taxation under section 831, if it were a U.S. corporation, must file Form 1120-PC.

More In File If the corporation's principal business, office, or agency is located in:Use the following IRS center address:the United StatesDepartment of the Treasury Internal Revenue Service Ogden, UT 84201-00121 more row • Jul 25, 2022