Header and items A to C
The Form 1120-FSC line and schedule the amount is reported on, the name and EIN, the product or product line, the basis of reporting, and the principal business activity code.
1120-FSC Sch. P
Transfer Price or Commission
- Agency
- IRS
- Revision
- Rev. September 2017
- Fillable fields
- 74
- Pages
- 3
- Official source
- IRS form page
- Checked
- October 21, 2026
Schedule P (Form 1120-FSC): Transfer Price or Commission
Schedule P (Form 1120-FSC), Transfer Price or Commission, is a schedule attached to Form 1120-FSC, the return of a foreign sales corporation (FSC). The schedule says it is used to figure an allowable transfer price to charge the FSC, or an allowable commission to pay to the FSC, under the administrative pricing rules. The transfer price or commission is used to allocate foreign trading gross receipts from the sale of export property or from certain services between the FSC and its related supplier.
The schedule has three parts. Part I figures the FSC's profit using combined taxable income, then either the 23% of combined taxable income method or the 1.83% of foreign trading gross receipts method. Part II turns that profit into a transfer price from the related supplier. Part III turns it into a commission from the related supplier.
The instructions are printed on pages 2 and 3 of the schedule itself. You can fill out Schedule P (Form 1120-FSC) free in your browser on this page and download the result without an account.
What's on Schedule P (Form 1120-FSC)
Part I, Section A: combined taxable income
Full costing on lines 1 to 3 and marginal costing on lines 4 to 12, including the overall profit percentage on line 10.
Part I, Section B: 23% method
Line 13 multiplies combined taxable income by 23% (0.23). Line 14 is the FSC profit under this method.
Part I, Section C: 1.83% method
Line 15 multiplies line 1 by 1.83% (0.0183), line 16 multiplies combined taxable income by 46% (0.46), and line 17 is the FSC profit.
Part II: transfer price
Lines 18 to 20 figure the transfer price from the related supplier to the FSC.
Part III: commission
Lines 21 to 23 figure the FSC commission from the related supplier.
How to fill out Schedule P (Form 1120-FSC)
- 1
Items A and C
Enter the product or product line, based on the principal product under the North American Industry Classification System (NAICS) or a recognized industry or trade use. In item C, enter the six-digit principal business activity code from the last page of the Instructions for Form 1120-FSC, if applicable.
- 2
Item B
Check box 1a, 1b or 1c for transaction-by-transaction reporting, or box 2 when the related supplier elects to group transactions. For 1b, 1c and 2, the schedule says to enter only the name and EIN on Schedule P and attach a tabular schedule.
- 3
Section A
Under full costing, line 3 is line 1 minus line 2d. Under marginal costing, line 12 is the smaller of line 6 or line 11. If the result on line 6 or line 9 is zero or less, the form says to skip ahead and enter -0- on line 12.
- 4
Sections B and C
Line 13 is line 3 or line 12, as elected by the related supplier, times 23%. Line 17 is the smallest of line 3, line 15 or line 16. The instructions say that if there is a combined loss, the FSC may not earn a profit under either method.
- 5
Part II or Part III
For a transfer price, line 20 is line 18 minus line 19c. For a commission, line 23 is line 21 plus line 22. If the amount is entered on more than one line of Form 1120-FSC, the instructions say to attach an explanation of the portion for each line.
Why fill Form 1120-FSC Sch. P on indox
You get the real form, filled in a browser tab, with nothing standing between you and the finished PDF.
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Attaching it and tabular schedules
Where it goes
The schedule says to attach Schedule P to Form 1120-FSC. For the Paperwork Reduction Act Notice it refers to the Instructions for Form 1120-FSC.
Tabular schedule format
A tabular schedule is in spreadsheet or similar format, lists the taxpayer's name and EIN on each numbered page, has columns for items A, C and each line in Parts I, II and III, and shows totals in each column.
Supporting schedule
For aggregate reporting, the FSC and its related supplier keep a supporting schedule with all the information a separate Schedule P for each transaction would show. The instructions say it should not be filed with Schedule P.
Grouping redeterminations
Once a grouping election is made, the instructions say redeterminations are permitted no later than 1 year after the due date of the FSC's timely filed (including extensions) Form 1120-FSC.
Related forms
Who completes Schedule P (Form 1120-FSC)?
The schedule is completed for a foreign sales corporation and attached to its Form 1120-FSC. It is not an individual's form.
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Questions about Form 1120-FSC Sch. P
What is Schedule P (Form 1120-FSC) used for?
The schedule says it is used to figure an allowable transfer price to charge the FSC, or an allowable commission to pay to the FSC, under the administrative pricing rules.
What is a related supplier?
Under Regulations section 1.482-1(a), as quoted on the schedule, an entity owned or controlled directly or indirectly by the same interests as the FSC.
Which pricing methods does it use?
The 23% of combined taxable income method in Section B and the 1.83% of foreign trading gross receipts method in Section C of Part I.
When is Schedule P not completed?
The schedule lists three situations: the section 482 method is used, the arm's-length pricing method is used, or transactions are incomplete at the end of the year.
Can transactions be grouped?
Yes. The related supplier may elect to group transactions by product or product line. The election covers all transactions for that product or product line during the tax year, and sale and lease transactions are not grouped together.
Is a separate Schedule P filed for each transaction?
The instructions say FSCs should not file a separate Schedule P for each transaction or group of transactions, except for certain small FSCs electing to group transactions.