Business Tax Basics_index

8/11/2019 Business Tax Basics_index

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BUSINESS BASICS

1. Getting StartedForms of OrganizationLicenses Required

Permits RequiredInsurance

2. OperatingStart from Scratch

Part Time vs. Full TimeBuying

3. FinancingTypesCosts

Sources

4. Required RecordsBookkeeping Systems (Manual vs. Computer)

Types (Cash, Hybrid, Accrual)Payroll

5. LeverageEmployees: Personnel Requirements, Tasks to perform, Job Description,

Personnel PolicySubcontractors

Joint Ventures

6. MarketingWho is your prospect? (Think Niche) AdvertisingWhere are they? (Lists) PublicityReaching Them Branding

Media: DM, FAX, Voice Broadcast, TV, RadioPackage vs. Products

7. Taxes

EntityPersonal

8. Attitudes/Abilities

9. AssetsPersonal Vehicle

Home vs. OfficeControl/Isolation


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BUSINESS STARTUP CHECKLIST

Reserve the entitys name

Articles of Organization/Incorporation

Order Corporation Kit Stock Certificates, Specimen Minutes, Book and Seal

Organization Minutes

Federal Employers Identification Number

S-Election

State-Employers Corporation Filing, Sales Tax Registration, Employers Withholding

City Business License

State License(s) Contractors, Beverage, Tobacco, Tire

Federal License(s) Heavy Vehicle

Insurance Liability, Vehicle, Umbrella, Bond, Workers Compensation

Employment Commission (VEC)

Bank Account

Business Books

Business Forms Stationery & Envelopes, Business Cards, Invoices, Estimate Forms


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STF FED2615F.1

OMB No. 1545-0074SCHEDULE C(Form 1040)

Profit or Loss From Business(Sole Proprietorship)

u Partnerships, joint ventures, etc., must file Form 1065 or 1065-B.Department of the TreasuryInternal Revenue Service

AttachmentSequence No. 09u Attach to Form 1040 or 1041. u See Instructions for Schedule C (Form 1040).

Name of proprietor Social security number (SSN)

A Principal business or profession, including product or service (seepage C-2 of the instructions) B Enter code from pages C-8, 9, & 10

u

D Employer ID number (EIN), if anyBusiness name. If no separate business name, leave blank.C

Accounting method:

E

F

Yes NoGH

Did you materially participate in the operation of this business during 2005? If No, see page C-3 for l imit on lossesIf you started or acquired this business during 2005, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u

Income

Gross receipts or sales. Caution. If this income was reported to you on Form W-2 and the Statutory

employee box on that form was checked, see page C-3 and check here . . . . . . . . . . . . . . . . u

11

22 Returns and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33 Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44 Cost of goods sold (from line 42 on page 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5Gross profit. Subtract line 4 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

6Other income, including Federal and state gasoline or fuel tax credit or refund (see page C-3) . . . . . . .6

7 Gross income.Add lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u 7

Expenses. Enter expenses for business use of your home only on line 30.

8

21Repairs and maintenance . . . .21

Advertising . . . . . . . . . . . . . . . .8

22Supplies (not included in Part III) . .22 23

9

Taxes and licenses . . . . . . . . .23

10

Travel, meals, and entertainment:24

Car and truck expenses (see

page C-3) . . . . . . . . . . . . . . .

9

24a

11

Travel. . . . . . . . . . . . . . . . . . . . .a

Commissions and fees . . . . .10

12Depletion . . . . . . . . . . . . . . . . .12

Deductible meals and

entertainment (see page C-5)

b

Depreciation and section 179expense deduction (not

included in Part III) (see

page C-4) . . . . . . . . . . . . . .

13

13

14 Employee benefit programs

(other than on line 19) . . . . . 14

2515 Utilities . . . . . . . . . . . . . . . . . . .25Insurance (other than health) .15

26Wages (less employment credits) . .26Interest:16

16aMortgage (paid to banks, etc.) . .a Other expenses (from line48 on

page 2) . . . . . . . . . . . . . . . . . . . . . .

2716bOther . . . . . . . . . . . . . . . . . . . .b

17

Legal and professional

services . . . . . . . . . . . . . . . . . .

18Office expense . . . . . . . . . . . .18

19Pension and profit-sharing plans19

Rent or lease (seepage C-5):20

20aVehicles, machinery, and equipment . .a

b Other business property. . . . . . 20b

Total expenses before expenses for business use of home. Add lines 8 through 27 in columns . . . u28 28

31

31

All investment is at risk.32a

32

Some investment is not

at risk.

32b

Schedule C (Form 1040) 2005For Paperwork Reduction Act Notice, see page C-7 of the instructions.

(1) Cash (2) Accrual (3) Other (specify) u

Business address (including suite or room no.) u

City, town or post office, state, and ZIP code

29

30

Tentative profit (loss). Subtract line 28 from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Expenses for business use of your home. Attach Form 8829 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

30

}

Part I

Part II

27

Net profit or (loss). Subtract line 30 from line 29.

If a prof it , enter on Form 1040, line 12, and also on ScheduleSE, line 2 (statutory employees,

see page C-6). Estates and trusts, enter on Form 1041, line 3.

If a loss, you must go to line 32.

If you have a loss, check the box that describes your investment in this activity (seepage C-6).

If you checked 32a, enter the loss on Form 1040, line 12, and also on Schedule SE, line 2

(statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3.

If you checked 32b, you must attach Form 6198. Your loss may be limited.

}

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Contract labor (see page C-4)11

2005

24b

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STF FED2615F.2

Page 2Schedule C (Form 1040) 2005

Cost of Goods Sold (see page C-6)

35Inventory at beginning of year. If different from last years closing inventory, attach explanation . . . .

33

36Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34

37Cost of labor. Do not include any amounts paid to yourself . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35

38Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

39Other costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37

40Add lines 35 through 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38

41Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39

Cost of goods sold. Subtract line 41 from line 40. Enter the result here and onpage 1, line 4 . . . . .

40

42

Part IV

Part III

Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses online 9 and are not required to file Form 4562 for this business. See the instructions for line 13 on pageC-4 to find out if you must file Form 4562.

41

When did you place your vehicle in service for business purposes? (month, day, year) u .

42

Of the total number of miles you drove your vehicle during 2005, enter the number of miles you used your vehicle for:

a Business b Commuting (see instructions) c Other

45 Do you (or your spouse) have another vehicle available for personal use?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46 Was your vehicle available for personal use during off-duty hours? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47a Do you have evidence to support your deduction?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b If Yes, is the evidence written? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes No

Other Expenses. List below business expenses not included on lines 826 or line 30.

48 Total other expenses.Enter here and on page 1, line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes No

Yes No

Yes No

48

Part V

Method(s) used tovalue closing inventory: Cost b Other (attach explanation)

Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If

Yes, attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .

Lower of cost or market ca

NoYes

43

44

Schedule C (Form 1040) 2005

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STF FED5085F.1

ISA

Depreciation and Amortization(Including Information on Listed Property)

See separate instructions. Attach to your tax return.

Form4562(Rev. January 2006)

Department of the Treasury

Internal Revenue Service

OMB No. 1545-0172

2005AttachmentSequence No. 67

Name(s) shown on return Business or activity to which this form relates Identifying number

Part I Election To Expense Certain Property Under Section 179Note: If you have any listed property, complete Part V before you complete Part I.

1 Maximum amount. See instructions for a higher limit for certain businesses . . . . . . . . . . . . . . . . . . . . 1 $105,000

2 Total cost of section 179 property placed in service (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . 2

3 Threshold cost of section 179 property before reduction in limitation . . . . . . . . . . . . . . . . . . . . . . . . . 3 $420,000

4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . 4

5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married filingseparately, see instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

(a) Description of property (b) Cost (business use only) (c) Elected cost

6

7 Listed property. Enter the amount from line 29. . . . . . . . . . . . . . . . . . . . . . . 7

8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 . . . . . . . . . . . . . 8

9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

10 Carryover of disallowed deduction from line 13 of your 2004 Form 4562 . . . . . . . . . . . . . . . . . . . . . . 10

11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions) . . . . . . . . . 11

12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 . . . . . . . . . . 1213 Carryover of disallowed deduction to 2006. Add lines 9 and 10, less line 12 13

Note: Do not use Part II or Part III below for listed property. Instead, use Part V.

Part II Special Depreciation Allowance and Other Depreciation (Do not include listed property.) (See instructions.)

14 Special allowancefor certain aircraft, certain property with a long production period, andqualifiedNYLor GO Zoneproperty (other than listedproperty) placed inserviceduringthe taxyear (see instructions) 14

15 Property subject to section 168(f)(1) election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

16 Other depreciation (including ACRS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Part III MACRS Depreciation (Do not include listed property.) (See instructions.)

Section A

17 MACRS deductions for assets placed in service in tax years beginning before 2005 . . . . . . . . . . . . . 17

18 If you are electing to group any assets placed in service during the tax year into one or moregeneral asset accounts, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . j

Section B Assets Placed in Service During 2005 Tax Year Using the General Depreciation System(b) Month and (c) Basis for depreciation

(a) Classificat ion o f property year placed in (business/investment use(d) Recovery

(e) Convention (f) Method (g) Depreciation deductionservice only see instructions)

period

19a 3-year property

b 5-year property

c 7-year property

d 10-year property

e 15-year property

f 20-year property

g 25-year property 25 yrs. S/L

h Residential rental 27.5 yrs. MM S/Lproperty 27.5 yrs. MM S/L

i Nonresidential rental 39 yrs. MM S/L

property MM S/LSection C Assets Placed in Service During 2005 Tax Year Using the Alternative Depreciation System

20a Class life S/L

b 12-year 12 yrs. S/L

c 40-year 40 yrs. MM S/L

Part IV Summary (See instructions.)

21 Listed property. Enter amount from line 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

22 Total.Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (g), and line 21.Enter here and on the appropriate lines of your return. Partnerships and S corporations see instr. . 22

23 For assets shown above and placed in service during the current year,enter the portion of the basis attributable to section 263A costs . . . . . 23

For Paperwork Reduction Act Notice, see separate instructions. Form4562 (2005) (Rev. 1-2006

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STF FED5085F.2

Form 4562 (2005) (Rev. 1-2006) Page 2

Part V Listed Property (Include automobiles, certain other vehicles, cellular telephones, certain computers, and property used foentertainment, recreation, or amusement.)

Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense, complete only 24a, 24bcolumns (a) through (c) of Section A, all of Section B, and Section C if applicable.

Section A Depreciation and Other Information (Caution: See the instructions for limits for passenger automobiles.)

24a Do you have evidence to support the business/investment use claimed? jYesjNo 24b If Yes, is the evidence written? jYesjNo(c)

(e) (i)(a) (b) Business/ (d)

Basis for depreciation(f) (g) (h)

ElectedType of property (list Date placed in investment Cost or other

(business/investmentRecovery Method/ Depreciation

section 179vehicles first) service use basis

use only)period Convention deduction

costpercentage

25 Special allowance for certain aircraft, certain property with a long production period, and qualified NYL or GO Zoneproperty placed in service during the tax year and used more than 50% in a qualified business use (see instructions) . . . 25

26 Property used more than 50% in a qualified business use:

%

%

%

27 Property used 50% or less in a qualified business use:

% S/L -

% S/L -

% S/L -

28 Add amounts in column (h), lines 25 through 27. Enter here and on line 21, page 1 . . . . . . . . . . 28

29 Add amounts in column (i), line 26. Enter here and on line 7, page 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Section B Information on Use of VehiclesComplete this section for vehicles used by a sole proprietor, partner, or other more than 5% owner, or related person.If you provided vehicles to your employees, first answer the questions in Section C to see if you meet an exception to completing this section for those vehicles.

30 Total business/investment miles drivenduring the year (do not include commutingmiles) . . . . . . . . . . . . . . . . . . . . . . . . . . .

31 Total commuting miles driven during the year. . .

32 Total other personal (noncommuting) milesdriven . . . . . . . . . . . . . . . . . . . . . . . . . . .

33 Total miles driven during the year. Addlines 30 through 32 . . . . . . . . . . . . . . . . . . .

34 Was the vehicle available for personal use Yes No Yes No Yes No Yes No Yes No Yes No

during off-duty hours? . . . . . . . . . . . . . . . . .

35 Was the vehicle used primarily by a more

than 5% owner or related person? . . . . . . . . . .36 Is another vehicle available for personal

use? . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section C Questions for Employers Who Provide Vehicles for Use by Their EmployeesAnswer these questions to determine if you meet an exception to completing Section B for vehicles used by employees whoare not morethan 5% owners or related persons (see instructions).

37 Do you maintain a written policy statement that prohibits all personal use of vehicles, including commuting, by your Yes No

employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38 Do you maintain a written policy statement that prohibits personal use of vehicles, except commuting, by youremployees? See the instructions for vehicles used by corporate officers, directors, or 1% or more owners . . . . . . . . .

39 Do you treat all use of vehicles by employees as personal use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40 Do you provide more than five vehicles to your employees, obtain information from your employees about the useof the vehicles, and retain the information received? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41 Do you meet the requirements concerning qualified automobile demonstration use? (See instructions.) . . . . . . . . . .

Note: If your answer to 37, 38, 39, 40, or 41 is Yes, do not complete Section B for the covered vehicles.

Part VI Amortization

(b) (c) (d)(e)

(f)(a)

Date amortization Amortizable CodeAmortization

Amortization forDescription of costs

begins amount sectionperiod or

this yearpercentage

42 Amortization of costs that begins during your 2005 tax year (see instructions):

43 Amortization of costs that began before your 2005 tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

44 Total.Add amounts in column (f). See the instructions for where to report . . . . . . . . . . . . . . . . . . . . . 44

Form4562 (2005) (Rev. 1-2006

(a) (b) (c) (d) (e) (f)

Vehicle 1 Vehicle 2 Vehicle 3 Vehicle 4 Vehicle 5 Vehicle 6

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STF FED2633F.1

OMB No. 1545-0074SCHEDULE SE

Self-Employment Tax(Form 1040)Department of the TreasuryInternal Revenue Service

AttachmentSequence No. 17u Attach to Form 1040. u See Instructions for Schedule SE (Form 1040).

Name of person with self-employment income (as shown on Form 1040) Social security number of personwith self-employment income u

Who Must File Schedule SEYou must file Schedule SE if:

You had net earnings from self-employment from other than church employee income (line 4 of Short Schedule SE or line 4c oLong Schedule SE) of $400 or more, or

Exception. If your only self-employment income was from earnings as a minister, member of a religious order, or Christian Sciencepractitionerandyou filed Form 4361 and receivedIRS approval not to be taxed on those earnings, donot file Schedule SE. Instead,write ExemptForm 4361 on Form 1040, line 58.

Section AShort Schedule SE. Caution. Read above to see if you can use Short Schedule SE.

Net farm profit or (loss)from Schedule F, line 36, and farm partnerships, Schedule K-1 (Form1065), box 14, code A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065),box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9. Ministers andmembers of religious orders, see page SE-1 for amounts to report on this line. See page SE-2

for other income to report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

23Combine lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Net earnings from self-employment. Multiply line 3 by 92.35% (.9235). If less than $400,do not file this schedule; you do not owe self-employment tax . . . . . . . . . . . . . . . . . . . . . u

44

5 Self-employment tax. If the amount on line 4 is:

For Paperwork Reduction Act Notice, see Form 1040 instructions. Schedule SE (Form 1040) 2005

You had church employee income of $108.28 or more. Income from services you performed as a minister or a member of areligious order is not church employee income (seepage SE-1).

Deduction for one-half of self-employment tax. Multiply line 5 by50% (.5). Enter the result here and on Form 1040, line 27. . . . . . . . .

$90,000 or less, multiply line 4 by 15.3% (.153). Enter the result here and onForm 1040, line 58.

More than $90,000, multiply line 4 by 2.9% (.029).Then, add $11,160.00 to theresult. Enter the total here and on Form 1040, line 58.

May I Use Short Schedule SE or Must I Use Long Schedule SE?

Did You Receive Wages or Tips in 2005?

Was the total of your wages and tips subject to social securityor railroad retirement tax plus your net earnings fromself-employment more than $90,000?

Did you receive tips subject to social security or Medicare taxthat you did not report to your employer?

Are you using one of the optional methods to figure your netearnings (see page SE-3)?

Are you a minister, member of a religious order, or ChristianScience practitioner who received IRS approvalnot tobe taxedon earnings from these sources, but you owe self-employmenttax on other earnings?

Did you receive church employee income reported on FormW-2 of $108.28 or more?

You May Use Short Schedule SE Below You Must Use Long Schedule SE on page 2

q

Yes

YesNo

q

q

q

No

No

No

No

Yes

Yes

Yes

Yes

q qq

q

No

Note. Even if you had a loss or a small amount of income from self-employment, it may be to your benefit to file Schedule SEanduse either optional method in Part IIof Long Schedule SE (seepage SE-3).

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Page 2Attachment Sequence No. 17Schedule SE (Form 1040) 2005

Name of person with self-employment income (as shown on Form 1040) Social security number of personwith self-employment income u

Section BLong Schedule SE

A If you are a minister, member of a religious order, or Christian Science practit ionerand you filed Form 4361, but youhad $400 or more of othernet earnings from self-employment, check here and continue with Part I . . . . . . . . . . . . . u

Note. If your only income subject to self-employment tax is church employee income, skip lines 1 through 4b. Enter -0- on line4c and go to l ine 5a. Income from services you performed as a minister or a member of a religious orderis not church employee

income. See page SE-1.

Self-Employment Tax

1 Net farm profit or (loss) from Schedule F, line 36, and farm partnerships, Schedule K-1 (Form1065),box 14, code A. Note. Skip this line if you use the farm optional method (seepage SE-4) 1

2 Net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9. Ministers and membersof religious orders, see page SE-1 for amounts to report on this line. See page SE-2 for other income to report. Note. Skip this line if you use the nonfarm optional method (see page SE-4) 2

33 Combine lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4a4a If line 3 is more than zero, multiply line 3 by 92.35% (.9235). Otherwise, enter amount from line 34bIf you elect one or both of the optional methods, enter the total of lines 15 and 17 here . . . . .b

c Combine lines 4a and 4b. If less than $400,stop; you do not owe self-employment tax. Exception.If less than $400 and you had church employee income, enter -0- and continue . . . . . . . . . . . . u 4c

6

90,000.00Maximum amount of combined wages and self-employment earnings subject to social securitytax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2005 . . . . . . . . . . . . . .

5a

7

Total social securitywages and tips (totalof boxes 3 and 7 on Form(s)W-2) and railroad retirement (tier 1) compensation. If $90,000 or more,skip lines 8b through 10, and go to line 11 . . . . . . . . . . . . . . . . . . . 8a

b Unreported tips subject to social security tax (from Form 4137, line 9) 8b

8cc Add lines 8a and 8b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8a

Subtract line 8c from line 7. If zero or less, enter -0- here and on line 10 and go to line 11 . u 99

10 10

Self-employment tax.Add lines 10 and 11. Enter here and on Form 1040, line 58 . . . . . . . . .

Optional Methods To Figure Net Earnings (see page SE-3)

1,600.0014Maximum income for optional methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14Enter the smaller of: two-thirds (2/3) of gross farm income1 (not less than zero) or $1,600. Alsoinclude this amount on line 4b above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

15

16Subtract line 15 from line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Nonfarm Optional Method. You may use this method only if (a) your net nonfarm profits3 were lessthan $1,733 and also less than 72.189% of your gross nonfarm income4 and (b) you had net earningsfrom self-employment of at least $400 in 2 of the prior 3 years.

1717

3 From Sch. C, line 31; Sch. C-EZ, line 3; Sch. K-1 (Form 1065), box 14, code A; andSch. K-1 (Form 1065-B), box 9.

1 From Sch. F, line 11, and Sch. K-1 (Form 1065),box 14, code B.

4 From Sch. C, line 7; Sch. C-EZ, line 1; Sch. K-1 (Form 1065), box 14, code C; and Sch.K-1 (Form 1065-B), box 9.

2 From Sch. F, line 36, and Sch. K-1 (Form 1065),box 14, code A.

Multiply the smallerof line 6 or line 9 by 12.4% (.124) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Multiply line 6 by 2.9% (.029) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Enter yourchurchemployee incomefrom Form W-2. See page SE-1for definition of church employee income . . . . . . . . . . . . . . . . . . . . . . . . .

Multiply line 5a by 92.35% (.9235). If less than $100, enter -0- . . . . . . . . . . . . . . . . . . . . . . . .

Net earnings from self-employment.Add lines 4c and 5b . . . . . . . . . . . . . . . . . . . . . . . . . .

5a

5bb

6

7

11

1211

Farm Optional Method. You may use this method only if (a) your gross farm income1 was not morethan $2,400 or (b) your net farm profits2 were less than $1,733.

Enter the smaller of: two-thirds (2/3) of gross nonfarm income4 (not less than zero) or the amounton line 16. Also include this amount on line 4b above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part I

Part II

Caution. You may use this method no more than five times.

Deduction for one-half of self-employment tax. Multiply line 12 by50% (.5).Enter the result here and on Form 1040, line 27 . . . . . . . . 13

13

Schedule SE (Form 1040) 2005

12


11/64

STF FED5267F.1

Sales of Business Property(Also Involuntary Conversions and Recapture Amounts

Under Sections 179 and 280F(b)(2))Attach to your tax return. See separate instructions.

Form4797Department of the TreasuryInternal Revenue Service (99)

OMB No. 1545-0184

2005AttachmentSequence No. 27

For Paperwork Reduction Act Notice, see separate instructions. Form4797 (2005

ISA

Name(s) shown on return Identifying number

1 Enter the gross proceeds from sales or exchanges reported to you for 2005 on Form(s) 1099-B or 1099-S (or substitute

statement) that you are including on line 2, 10, or 20 (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Part I Sales or Exchanges of Property Used in Trade or Business and Involuntary Conversions From Other

Than Casualty or Theft Most Property Held More Than 1 Year (see instructions)(e) Depreciation (f) Cost or other

(a) Description (b) Date acquired (c) Date sold (d) Gross allowed or basis, plus(g) Gain or (loss)

of property (mo., day, yr.) (mo., day, yr.) sales price allowable since improvements andSubtract (f) from the

acquisition expense of salesum of (d) and (e)

2

3 Gain, if any, from Form 4684, line 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

4 Section 1231 gain from installment sales from Form 6252, line 26 or 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

5 Section 1231 gain or (loss) from like-kind exchanges from Form 8824 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

6 Gain, if any, from line 32, from other than casualty or theft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

7 Combine lines 2 through 6. Enter the gain or (loss) here and on the appropriate line as follows: . . . . . . . . . . . . . . . . . . . 7

Partnerships (except electing large partnerships) and S corporations. Report the gain or (loss) following the

instructions for Form 1065, Schedule K, line 10, or Form 1120S, Schedule K, line 9. Skip lines 8, 9, 11, and 12 below.

Individuals, partners, S corporation shareholders, and all others. If line 7 is zero or a loss, enter the amount from

line 7 on line 11 below and skip lines 8 and 9. If line 7 is a gain and you did not have any prior year section 1231

losses, or they were recaptured in an earlier year, enter the gain from line 7 as a long-term capital gain on the

Schedule D filed with your return and skip lines 8, 9, 11, and 12 below.

8 Nonrecaptured net section 1231 losses from prior years (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

9 Subtract line 8 from line 7. If zero or less, enter -0-. If line 9 is zero, enter the gain from line 7 on line 12 below. If line 9

is more than zero, enter the amount from line 8 on line 12 below and enter the gain from line 9 as a long-term capital

gain on the Schedule D filed with your return (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Part II Ordinary Gains and Losses (see instructions)

10 Ordinary gains and losses not included on lines 11 through 16 (include property held 1 year or less):

11 Loss, if any, from line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (

12 Gain, if any, from line 7 or amount from line 8, if applicable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

13 Gain, if any, from line 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

14 Net gain or (loss) from Form 4684, lines 34 and 41a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

15 Ordinary gain from installment sales from Form 6252, line 25 or 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

16 Ordinary gain or (loss) from like-kind exchanges from Form 8824 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

17 Combine lines 10 through 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

18 For all except individual returns, enter the amount from line 17 on the appropriate line of your return and skip lines a

and b below. For individual returns, complete lines a and b below:a If the loss on line 11 includes a loss from Form 4684, line 38, column (b)(ii), enter that part of the loss here. Enter the

part of the loss from income-producing property on Schedule A (Form 1040), line 27, and the part of the loss from

property used as an employee on Schedule A (Form 1040) line 22. Identify as from Form 4797, line 18a. See

instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18a

b Redetermine the gain or (loss) on line 17 excluding the loss, if any, on line 18a. Enter here and on Form 1040,

line 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18b

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12/64


13/64

STF FED3903F.1

Payments: a2004 overpayment credited to 2005 .

OMB No. 1545-0123U.S. Corporation Income Tax Return1120FormFor calendar year 2005 or tax year beginning , 2005, ending , 20Department of the Treasury

Internal Revenue Service u See separate instructions.

B Employer identification numberNameCheck if:

Use IRSlabel.Otherwise,print ortype.

Consolidated return(attach Form 851) . . .

A

Number, street, and room or suite no. If a P.O. box, see instructions. C Date incorporatedPersonal holding co.(attach Sch. PH) . . .

2

Personal service corp.(see instructions) . . . .

3

City or town, state, and ZIP code D Total assets (see instructions)

$E

1c1a Gross receipts orsales b Less returns and allowances cBalu

2Cost of goods sold (Schedule A, line 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23Gross profit. Subtract line 2 from line 1c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34Dividends (Schedule C, line 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56Gross rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .67I

ncome

7 Gross royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .88 Capital gain net income (attach Schedule D (Form 1120)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99 Net gain or (loss) from Form 4797, Part II, line 17 (attach Form 4797) . . . . . . . . . . . . . . . . . . . . . . .

10 Other income (see instructionsattach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Total income.Add lines 3 through 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .u11 11

12Compensation of officers (Schedule E, line 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

13Salariesand wages (lessemployment credits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1314Repairs and maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1415Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .1516Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1617Taxesand licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1718Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1819Charitable contributions (see instructions for 10% limitation). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

20aDepreciation (attach Form 4562) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20a20c20bLess depreciation claimed on Schedule A and elsewhere on return . . . . . .b21Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2122Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2223Pension, profit-sharing, etc., plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2324Employeebenefit programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

25

Other deductions (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2627Total deductions.Add lines 12 through 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .u2728Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 1128

29aLess: a Net operating loss deduction (see instructions) . . . . . . . . . . . .29Deductions(Se

einstructionsforlimitationsondeductio

ns.)

Special deductions (Schedule C, line 20) . . . . . . . . . . . . . . . . . 29c29b

30Taxable income. Subtract line 29c from line 28 (seeinstructions if ScheduleC, line 12, was completed)3031Total tax (Schedule J, line 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

32a3232b2005 estimated tax payments . . . . . .b

( ) d Bal u 32d32cLess 2005refund applied for on Form 4466c

32eTax deposited with Form 7004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .e32fCredits:f

33Estimated tax penalty (see instructions). Check if Form 2220 is attached . . . . . . . . . . . . . . u33TaxandPayments

34Tax due. If line 32g is smaller than the total of lines 31 and 33, enter amount owed . . . . . . . . . . . .3435Overpayment. If l ine 32g is larger than the total of lines 31 and 33, enter amount overpaid . . . . . . .35

Enteramount of line 35you want:Credited to 2006 estimated tax u36 36

1

Refunded u

b

(1) Initial return (2) Final return (3) Name change (4) Address change

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is truecorrect, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

SignHere

TitleDateSignature of officer

Date Preparers SSN or PTINPreparerssignature

Check ifself-employed

Paid

Preparers

Use OnlyFirms name (oryours if self-employed),address, and ZIP code

EIN

Phone no.

Form 1120 (2005

May the IRS discuss this return

with the preparer shown below

(see instructions)? Yes Nou

u

u

u

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

Schedule M-3 required(attach Sch. M-3) . . . .

4

Check if:

2005

26Domestic production activities deduction (attach Form 8903) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

32g(1) Form 2439 (2) Form 4136

ISA

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14/64

STF FED3903F.2

Page 2Form 1120 (2005)

Cost of Goods Sold (see instructions)

1Inventory at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23Cost of labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34Additional section 263A costs (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45Other costs (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Total.Add lines 1 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

8Cost of goods sold. Subtract line7 from line 6. Enterhere and on page 1, line 2 . . . . . . . . . . . . .8

Check all methods used for valuing closing inventory:9a

Cost

Lower of cost or market

Other (Specify method used and attach explanation.) u

Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) . . . . . . . . . . . . . . uc

If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing

inventory computed under LIFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d9d

If property is produced or acquired for resale, d o the rules of section 263A apply to the corporation? . . . . . . . . . . . NoYese

Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If Yes,attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

fNoYes

(c) Special deductions(a) 5(b)

(a) Dividendsreceived

Dividends and Special Deductions (see instructions)(b) %

1 Dividends from less-than-20%-owned domestic corporations (other than

debt-financed stock) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

2 Dividends from 20%-or-more-owned domestic corporations (other than debt-financed

stock) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80see

instructions3 Dividends on debt-financed stock of domestic and foreign corporations . . . . . . . . .42Dividends on certain preferred stock of less-than-20%-owned public utilities . . . . .448Dividends on certain preferred stock of 20%-or-more-owned public utilities . . . . . .5

6 Dividends from less-than-20%-owned foreign corporations and certain FSCs . . . . . 70

7 Dividends from 20%-or-more-owned foreign corporations and certain FSCs . . . . . 80100Dividends from wholly owned foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .8

9 Total.Add lines 1 through 8. See instructions for limitation . . . . . . . . . . . . . . . . . .

10 Dividends from domestic corporations received by a small business investment

company operating under the Small Business Investment Act of 1958 . . . . . . . . . . 100100Dividends from affiliated group members and certain FSCs. . . . . . . . . . . . . . . . . . . . . . .11

Dividends from controlled foreign corporations (attach Form 8895) . . . . . . . . . . . . . . .12

13 Dividends from foreign corporations not included on lines 3, 6, 7, 8, 11, or 12 . . . .

14 Income from controlled foreign corporations under subpart F (attach Form(s) 5471)

15 Foreign dividend gross-up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16 IC-DISC and former DISC dividends not included on lines 1, 2, or 3 . . . . . . . . . . . . .

17 Other dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 Deduction for dividends paid on certain preferred stock of public utilities . . . . . . . .

Total dividends.Add lines 1 through 17. Enter here and on page 1, line 4 . . . . . . u19Total specialdeductions.Add lines 9, 10, 11, 12, and 18. Enter here and on page 1, line 29b . . . . . . . . . . . . . . u20

Compensation of Officers (see instructions for page 1, line 12)Note: Complete Schedule E only if total receipts (line 1a plus lines 4 through 10 on page 1) are $500,000 or more.Percent of corporation

stock owned(c)Percent of

t ime devoted tobusiness

(f)Amount of compensation(b) Social security number(a)Name of officer(e)Preferred(d) Common

%%%1

%%%

%%%

%%%

%%%

Total compensation of officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Compensation of officers claimed on Schedule A and elsewhereon return . . . . . . . . . . . . . . . . . . . . . .3Subtract line 3 from line 2. Enter the result here and on page 1, line 12. . . . . . . . . . . . . . . . . . . . . . . .4

5

Check if there was a writedown of subnormal goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ub

(i)

(ii)

(iii)

Form 1120 (2005

Schedule A

Schedule C

Schedule E

85

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15/64

STF FED3903F.3

Page 3Form 1120 (2005)

Tax Computation (see instructions)

Check if the corporation is a member of a controlled group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u1

If the box on line 1 is checked, enter the corporations share of the $50,000, $25,000, and $9,925,000 taxable

income brackets (in that order):

2a

$$

Enter the corporations share of:b

Income tax. Check if a qualified personal service corporation (see instructions) . . . . . . . . . . . . . . . . . . u3 3

6aForeign tax credit (attach Form 1118) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6a6bPossessions tax credit (attach Form 5735) . . . . . . . . . . . . . . . . . . . . . . . . . . . .b6cc Form 8834

d

6d

6fCredit for prior year minimum tax (attach Form 8827) . . . . . . . . . . . . . . . . . . . .e

Total credits.Add lines 6a through 6f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78Subtract line 7 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .89Personal holding company tax (attach Schedule PH (Form 1120)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

10Other taxes. Check if from:10

Alternative minimum tax (attach Form 4626) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 4

Add lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .5 5

NoYesNoYes

See the instructions and enter the:

Business activity code no. u

Business activity u

Product or service u

At the end of the tax year, did the corporation own,directly orindirectly, 50% or more of the voting stock ofa domestic corporat ion? (For rules of attribution, see

section 267(c).) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .If Yes, attach a schedule showing: (a) name andemployer identification number (EIN),(b) percentageowned, and(c) taxable income or (loss)before NOL andspecial deductions of such corporation for the tax yearending with orwithin your tax year.

Duringthis tax year,did the corporation pay dividends (otherthan stock dividends and distributions in exchange for stock)in excess of the corporations current and accumulatedearnings and profits? (See sections 301 and 316.) . . . . .

Is the corporation a subsidiary in an affiliated group oraparent-subsidiary controlled group? . . . . . . . . . . . . . .

If Yes, file Form 5452, Corporate Report of Nondividend Distributions.

Check accounting method: a Cash

b Accrual Other (specify) uc

Check this box if the corporation issued publicly offereddebt instruments with original issue discount . . . u

If checked, the corporation may have to fileForm 8281,Information Return for Publicly Offered Original IssueDiscount Instruments.

Enter the amount of tax-exempt interest received or accrued during the tax year u $

Other Information (see instructions)

1

2

4

6

7

8

a

b

c

At any time during the tax year, did one foreign personown, directly or indirectly, at least 25% of(a) the totalvoting power of all classes of stock of the corporationentitled to vote or(b) the total value of all classesof stockof the corporation? . . . . . . . . . . . . . . . . . . . . . . . . . .

Enter the number of shareholders at the end of the taxyear (if 100 or fewer) u

9

Schedule J

The corporation may have to fileForm 5472, InformationReturn of a 25% Foreign-Owned U.S. Corporation or aForeign Corporation Engaged in a U.S. Trade or Business.

Enter number of Forms 5472 attached u

11

3

7

If the corporation has an NOL for the tax year and iselecting to forego the carryback period, check hereu

If Yes, attach a schedule showing name andidentifyingnumber. (Do not include any information already enteredin 4 above.) Enter percentage owned u

c

Form 3800

Form 8907, line 23 . . . . . . . . . . . .

If Yes, enter name and EIN of the parentcorporation u

5 At the end of the tax year, did any individual, partnership,corporation, estate, or trust own, directly or indirectly,50% or more of the corporations voting stock? (For rulesof attribution, see section 267(c).) . . . . . . . . . . . . . . .

10

(1) (2)

12 Enter the available NOL carryover from prior tax years(Do not reduce it by any deduction on line29a.) u $

Credits from:

$(3)

$

$

(1)Additional 5% tax (not more than $11,750)

(2)Additional 3% tax (not more than $100,000)

Form 4255 Form 8611

Important: Members of a controlled group, see instructions.

Schedule K

Bond credits from:

Total tax.Add lines 8 through 10. Enter here and on page 1, line 31 . . . . . . . . . . . . . . . . . . . . . . . . . . .11 11

Form 1120 (2005

f

6e

Note: If the corporation, at any time during the tax year, had assets or operated a business in a foreign country or U.S. possession,it may berequired to attach Schedule N (Form 1120), Foreign Operations of U.S. Corporations, to this return. See Schedule N for details.

Ifthis is a consolidated return, answer here for the parentcorporation and onForm 851, Affiliations Schedule, foreach subsidiary.

If Yes, enter: (a) Percentage owned u

General business credit. Check box(es)and indicate which forms are attached:

Form(s) (specify) u

and (b) Owners country u

If the corporation is filing a consolidated return, the statementrequired by Temporary Regulations section 1.1502-21T(b)(3)

must be attached or the election will not be valid.

Form 8697

Form 8866 Other (attach schedule) . . .

Are the corporations total receipts (line 1a plus lines 4through 10 on page 1) for the tax yearand its total assetsat the end of the tax year less than $250,000? . . . . . .

If Yes, the corporation is not required to completeSchedules L, M-1, and M-2 on page 4. Instead, enter thetotal amount of cash distributions and the book value ofproperty distributions (other than cash) made during thetax year. u $

13

Form 8902

Form 8860 Form 8912 . . . . . . . . . . . . . . . . . . . . .

0.00

0.00

0.00

0.00


16/64

STF FED3903F.4

Schedule M-2

Schedule M-1

Schedule L

Page 4Form 1120 (2005)

End of tax yearBeginning of tax yearBalance Sheets per Books(d)(c)(b)(a)Assets

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Trade notes and accounts receivable . . . . .2a( )Less allowance for bad debts . . . . . . . . . . .b

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . .3

U.S. government obligations . . . . . . . . . . . .4

Tax-exempt securities (seeinstructions) . . .5

Other current assets (attach schedule) . . . .6

Loans to shareholders . . . . . . . . . . . . . . . .7

Mortgage and real estate loans . . . . . . . . .8

Other investments (attach schedule) . . . . . .9

Buildings and other depreciable assets . . . .10a

Less accumulated depreciation. . . . . . . . . .b

Depletable assets . . . . . . . . . . . . . . . . . . . .11a

Less accumulated depletion . . . . . . . . . . . .b

Land (net of any amortization) . . . . . . . . . .12

Intangible assets (amortizable only) . . . . . .13a

Less accumulated amortization. . . . . . . . . .bOther assets (attach schedule). . . . . . . . . .14

Total assets . . . . . . . . . . . . . . . . . . . . . . . .15

Liabilities and Shareholders Equity

Accounts payable . . . . . . . . . . . . . . . . . . . .16

Mortgages, notes, bonds payable in less than 1 year17

Other current liabilities (attach schedule) . .18

Loans from shareholders . . . . . . . . . . . . . .19

Mortgages, notes, bonds payable in 1 yearor more20

Other liabilities (attach schedule) . . . . . . . .21

Capital stock: a Preferred stock . . . . . . .22

b Common stock . . . . . . .

Additional paid-in capital . . . . . . . . . . . . . .23

RetainedearningsAppropriated (attach schedule)24

Retained earningsUnappropriated . . . . . .25

Less cost of treasury stock . . . . . . . . . . . .27

Total liabilities and shareholders equity . . .28

Reconciliation of Income (Loss) per Books With Income per Return(see instructions)

Net income (loss)per books . . . . . . . . . . . .1 Income recorded on books this year not

included on this return (itemize):

7

Federal income tax per books . . . . . . . . . .2Tax-exempt interest $Excess of capital losses over capital gains .3

Income subject to tax not recorded on books

this year (itemize):

4

Deductions on this return not charged

against book income this year (itemize):

8

Expenses recorded on books this year not

deducted on this return (itemize):

5Depreciation . . . . . . . . . .a

Charitable contributionsbDepreciationaCharitable contributions $b

c Travel and entertainment $

Add lines 7 and 8 . . . . . . . . . . . . . . . .910 Income (page 1, line28)line 6 less line 96 Add lines 1 through 5 . . . . . . . . . . . . . . . . . .

Analysis of Unappropriated Retained Earnings per Books (Line 25, Schedule L)

Balance at beginning of year . . . . . . . . . . .1 Distributions: a Cash . . . . . . . . . . .5

Net income (loss)per books . . . . . . . . . . . .2 b Stock . . . . . . . . . .

Other increases (itemize):3 c Property . . . . . . . .Other decreases (itemize):6

Add lines 5 and 6 . . . . . . . . . . . . . . . .7

4 8Add lines 1, 2, and 3 . . . . . . . . . . . . . . . . . . Balance at end of year(line 4 less line7)

( )

$

$

( )

( )

( )

( )

( )

( )

( )

( )Adjustments to shareholders equity (attach schedule)26

Form1120 (2005

$

Note: The corporation is not required to complete Schedules L, M-1, and M-2 if Question 13 on Schedule K is answered Yes.


17/64


18/64

STF FED4219F.1

OMB No. 1545-0130U.S. Income Tax Return for an S Corporation1120SForm

For calendar year 2005, or tax year beginning , 2005, ending , 20

Department of the TreasuryInternal Revenue Service u See separate instructions.

Effective date of Selection

A Employer identification numberCNameUse theIRSlabel.Other-wise,

print ortype.

Date incorporatedDNumber, street, and room or suite no. If a P.O. box, see instructions.

Business code

number (seeinstructions)

B

Total assets (seeinstructions)ECity or town, state, and ZIP code

$

Amended returnAddress changeFinal returnInitial returnCheck applicable boxes:FG Enter number of shareholders in the corporation at end of the tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u

Caution. Includeonly trade or business income and expenses on lines 1a through 21. See the instructions for more information.

1cGross receipts or sales1a bLess returns and allowances22 Cost of goods sold (Schedule A, line 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Gross profit. Subtract line 2 from line1c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Net gain (loss) from Form 4797, Part II, l ine 17 (attach Form 4797) . . . . . . . . . . . . . . . . . . . .

Income

55 Other income (loss) (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total income (loss).Add lines 3 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u6 6

7Compensation of officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78Salaries and wages (less employment credits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89Repairsand maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .910Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1011Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1112Taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1213Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

14aDepreciation (attach Form 4562). . . . . . . . . . . . . . . . . . . . . . . . .14a14bb Depreciation claimed on Schedule A and elsewhere on return . . .

14cc Subtract line 14b from line 14a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1515 Depletion(Donot deduct oil and gas depletion.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161717 Pension, profit-sharing, etc., plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18Employee benefit programs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Deduc

tions(seetheinstructionsforlimitations)

1919 Other deductions (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2020 Total deductions.Add the amounts shown in the far right column for lines 7 through 19 u

21 Ordinary businessincome (loss).Subtract line 20 from line 6 . . . . . . . . . . . . . . . . . . . . . . . . . 21

Tax: a Excess net passive income tax (attach statement). . . . . .22 22a

22bTax from Schedule D (Form 1120S) . . . . . . . . . . . . . . . . . . . . . .b

22cAdd lines 22a and 22b (see the instructions for additional taxes) . . . . . . . . . . . . . . . . . . . . .c

23 Payments: a2005 estimated tax payments and amount applied from 2004 return 23a

23bb Tax deposited with Form 7004. . . . . . . . . . . . . . . . . . . . . . . . . .

c Credit for Federal tax paid on fuels (attach Form 4136) . . . . . . . .

d Add lines 23a through 23c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24Estimated tax penalty (see instructions). Check if Form 2220 is attached . . . . . . . . . . . . u24

TaxandPayments

25 Tax due.If l ine 23d is smaller than the total of lines 22c and 24, enter amount owed. . . . . . . 252626 Overpayment. If l ine23d is larger than the total of lines 22c and 24, enter amount overpaid

Refunded uEnter amount of line 26 you want:Credited to 2006 estimated tax u27 27

Paid

Preparers

Use Only

For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Form1120S (2005

Bal uc

23c

23d

u Do not file this form unlessthe corporation has filed Form 2553to elect to be an S corporation.

(1) (2) (4) (5)Name change(3)

Date Preparers SSN or PTINPreparerssignature

Check ifself-employed

Firms name (oryours if self-employed),address, and ZIP code

EIN

Phone no.

u

u

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is truecorrect, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

SignHere

TitleDateSignature of officer

May the IRS discuss this return

with the preparer shown below

(see instructions)? Yes Nou u

2005

ISA

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.000.00

0.00


19/64

STF FED4219F.2

Form 1120S (2005) Page2

Cost of Goods Sold (see instructions)

1 Inventory at beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 Cost of labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional section 263A costs (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Other costs (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total.Add lines 1 through 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

Cost of goods sold. Subtract line 7 from line6. Enter here and on page 1, line 2 . . . . . . . . . . . . .

7

9a Check all methods used for valuing closing inventory: (i) Cost as described in Regulations section 1.471-3

(ii) Lower of cost or market as described in Regulations section 1.471-4

(iii) Other (specify method used and attach explanation) u

c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) . . . . . . . . . . . u

d I f the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing

inventory computed under LIFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9d

NoYesIf property is produced or acquired for resale, do the rules of Section 263A apply to the corporation? . . . . . . . . . .e

NoWas there any change in determining quantities, cost, or valuations between opening and closing inventory? . . . .f

Other Information (see instructions) NoYes

At the end of the tax year, did the corporation own, directly or indirectly, 50% or more of the voting stock of a domestic

corporation? (For rules of attribution, see section 267(c).) If Yes, attach a statement showing: (a) name, address,

and employer identification number and(b) percentage owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

See the instructions and enter the:2

(a) Business activity u

Was the corporation a member of a controlled group subject to the provisions of section 1561? . . . . . . . . . . . . . . .4

5

(c)(a) Other (specify) uCheck method of accounting: Accrual(b)Cash1

Has this corporation filed, or is it required to fi le, a return under section 6111 to provide information on any reportable

transaction? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 Check this box if the corporation issued publicly offered debt instruments with original issue discount . . . . u

If checked, the corporation may have to fileForm8281, Information Return for Publicly Offered Original Issue Discount

Instruments.

If the corporation:(a) was a C corporation before it elected to be an S corporationorthe corporation acquired an

asset with a basis determined by reference to its basis (or the basis of any other property) in the hands of a

C corporationand (b) has net unrealized built-in gain (defined in section 1374(d)(1))in excess of the net recognizedbuilt-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior

years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u $

Check this box if the corporation had accumulated earnings and profits at the close of the tax year . . . . . . u

Schedule A

Schedule B

Yes

8

If Yes, attach explanation.

7

8

1

2

3

4

5

6

7

8

b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c) . . . . . . . . . . . . . . . . . u

Form1120S (2005

Note: If the corporation had assets or operated a business in a foreign country or U.S. possession, it may be required to attachSchedule N (Form 1120), Foreign Operations of U.S. Corporations, to this return. See Schedule N for details.

Are the corporations total receipts (see instructions) for the tax yearand its total assets at the end of the tax yearless than $250,000? If Yes, the corporation is not required to complete Schedules L and M-1.

9

Dividends: a Ordinary dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shareholders Shares of Income, Deductions, Credits, etc.Total amountShareholders Pro Rata Share Items

1Ordinary business income (loss) (page 1, line 21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12Net rental real estate income (loss) (attach Form 8825) . . . . . . . . . . . . . . . . . . . . . . . . . .2

3aOther gross rental income (loss) . . . . . . . . . . . . . . . . . . . .3a

3bExpenses from other rental activities (attach statement) . . .b3cOther net rental income (loss). Subtract line 3b from line 3a . . . . . . . . . . . . . . . . . . . . . .c4Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45a5

6Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Income(Loss)

78a8a

Schedule K

7

9

10 10

Net short-term capital gain (loss) (attach Schedule D (Form 1120S)). . . . . . . . . . . . . . . . .

Net long-term capital gain (loss) (attach Schedule D (Form 1120S)) . . . . . . . . . . . . . . . . .

Net section 1231 gain (loss) (attach Form 4797). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8bCollectibles (28%) gain (loss) . . . . . . . . . . . . . . . . . . . . . .8cUnrecaptured section 1250 gain (attach statement)c

b

Qualified dividends . . . . . . . . . . . . . . . . . .b

9

5b

(b) Product or service u

Other income (loss) (see instructions) Type u

. . . . . .

. . . . . .

0.00

0.00

0.00

0.00


20/64

STF FED4219F.3

Page3Form 1120S (2005)

11Section 179 deduction (attach Form 4562) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

12a

13aLow-income housing credit (section 42(j)(5)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13a

Low-income housing credit (other) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualified rehabilitation expenditures (rental real estate) (attach Form 3468)c 13c13dOther rental real estate credits (see instructions) . .d

Other rental credits (see instructions) . . . . . . . .e 13e

f 13fCredit for alcohol used as fuel (attach Form 6478)Other credits and credit recapture (see instructions)g 13g

15a15a15bAdjusted gain or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .b15c

Post-1986 depreciation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Depletion (other than oil and gas) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d 15dOil, gas, and geothermal propertiesgross income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15eOil, gas, and geothermal propertiesdeductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A

lternative

MinimumTax

(AMT)Item

s

15fOther AMT items (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .f

Name of country or U.S. possession u14a

Foreign gross income sourced at corporate level:

c

Deductions allocated and apportioned at shareholder level:

Total foreign taxes (check one): u Paid Accrued . . . . . . . . . . . . . . . . . . . . . . .l

ForeignTransactions

Gross income sourced at shareholder level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Form1120S (2005

Passive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .d

e Listed categories (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .f

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .g

h Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deductions allocated and apportioned at corporate level to foreign source income:

Passive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i

j

General limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .k

14d

14e

14f

14i

14j

14k

14g

14h

14l

Listed categories (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14bb Gross income from all sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

m

14c

e

Deductions

Credits&C

redit

Recaptu

re

Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b

Other deductions (see instructions) . . . . . . . . .Section 59(e)(2) expenditures

d

Investment interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c (2)Amount u

12a

12b

12d

b 13b

Other foreign tax information (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .n

Other information:

14m

16a16a16bOther tax-exempt income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .b16c

Tax-exempt interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d 16dProperty distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16eRepayment of loans from shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ItemsAffecting

Shareholder

Basis

e

Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17a

Investment expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dividend distributions paid from accumulated earnings and profits . . . . . . . . . . . . . . . . .c

Other items and amounts (attach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .dIncome/loss reconciliation. (Required only if Schedule M-1 must be completed.) Combinethe amounts on l ines 1 through 10 in the far right column. From the result, subtract thesum of the amounts on lines 11 through 12d and 14l . . . . . . . . . . . . . . . . . . . . . . . . . . .

e

OtherInformation

b

17a

17b

17c

17e

(1) Type u

Total amountShareholders Pro Rata Share Items (continued)

Type u

Type u

Type u

Reduction in taxes available for credit (attach statement). . . . . . . . . . . . . . . . . . . . . . . . .

Type u12c(2)

. . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .


21/64

STF FED4219F.4

Form 1120S (2005) Page4

Beginning of tax year End of tax year Balance Sheets per Books(d)(c)(b)Assets

1 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trade notes and accounts receivable . . . .2a

b Less allowance for bad debts . . . . . . . . . .

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . .3

4 U.S. government obligations . . . . . . . . . . .

Tax-exempt securities . . . . . . . . . . . . . .5Other current assets (attach statement) . . .6

Loans to shareholders . . . . . . . . . . . . . . .7

Mortgage and real estate loans. . . . . . . . .8

Other investments (attach statement) . . . .9

Buildings and other depreciable assets . . .10a

b Less accumulated depreciation . . . . . . . .

Depletable assets . . . . . . . . . . . . . . . . . . .11a

b Less accumulated depletion . . . . . . . . . . .

Land (net of any amortization). . . . . . . . . .12

Intangible assets (amortizable only) . . . . . .13a

b Less accumulated amortization . . . . . . . . .

Other assets (attach statement) . . . . . . . .14

15 Total assets . . . . . . . . . . . . . . . . . . . . . . .Liabilities and Shareholders Equity

16 Accounts payable. . . . . . . . . . . . . . . . . . .

17 Mortgages, notes, bonds payable in less than 1 year

18 Other current liabilities (attach statement)

19 Loans from shareholders . . . . . . . . . . . . .

20 Mortgages, notes, bonds payable in 1 year or more

21 Other liabilities (attach statement) . . . . . . .

22 Capital stock . . . . . . . . . . . . . . . . . . . . . .

23 Additional paid-in capital . . . . . . . . . . . . .

24 Retained earnings. . . . . . . . . . . . . . . . . . .

)( )(26 Less cost of treasury stock . . . . . . . . . . . .

27 Total liabilities and shareholders equity . . . . .Reconciliationof Income (Loss) per Books With Income (Loss)per Return

Income recorded on books this year not included

on Schedule K, lines 1 through 10 (itemize):

5Net income (loss) per books . . . . . . . . . . .1

Income included on Schedule K,lines 1,2, 3c, 4,

5a, 6,7, 8a, 9, and 10,not recorded on books this

year(itemize):

2

a Tax-exempt interest $

Expenses recorded on books this year not

included on Schedule K, lines 1 through 12

and 14l (itemize):

3 Deductions included on Schedule K, lines

1 through 12 and 14l, not charged against

book income this year (itemize):

6

a Depreciation $ a Depreciation $

b Travel and entertainment $

Add lines 5 and 6 . . . . . . . . . . . . . . . . .74 Income (loss) (Schedule K, line 17e). Line 4 less line 78Add lines 1 through 3

Analysisof Accumulated Adjustments Account, Other Adjustments Account, and ShareholdersUndistributed Taxable Income PreviouslyTaxed (see instructions)

(a)Accumulatedadjustments account

(b)Other adjustmentsaccount

(c)Shareholders undistributedtaxable income previously taxed

1 Balance at beginning of tax year. . . . . . . . .

2 Ordinary income from page 1, line 21 . . . . .

3 Other additions . . . . . . . . . . . . . . . . . . . . .)(4 Loss from page 1, line 21 . . . . . . . . . . . . . .

)()(5 Other reductions . . . . . . . . . . . . . . . . . . .

6 Combine lines 1 through 5 . . . . . . . . . . . . . .

7 Distributions otherthan dividend distributions8 Balance at end of tax year.Su btract line 7 from line 6

Schedule M-2

Schedule M-1

Schedule L(a)

25 Adjustments to shareholders equity(attach statement)

Form1120S (2005

Note: The corporation is not required to complete Schedules L and M-1 if question 9 of Schedule B is answered Yes.

. . . . . . . . . . . . . .


22/64

STF FED4269F.1

OMB No. 1545-0130

year beginning , 2005

, 20

Schedule K-1(Form 1120S)

Information About the Corporation

Shareholders Share of Income, Deductions,

Credits, etc.

Department of the TreasuryInternal Revenue Service

ending

Part III

Part I

Part II

A Corporations employer identification number

B Corporations name, address, city, state, and ZIP code

C IRS Center where corporation filed return

D Tax shelter registration number, if any

E Check if Form 8271 is attached

Information About the Shareholder

F Shareholders identifying number

G Shareholders name, address, city, state and ZIP code

Final K-1 Amended K-1

Shareholders Share of Current Year Income,Deductions, Credits, and Other Items

1 Ordinary business income (loss)

2 Net rental real estate income (loss)

13 Credits & credit recapture

4

14 Foreign transactions

11 Section 179 deduction 16 Items affecting shareholder basis

12 Other deductions

Schedule K-1 (Form 1120S) 2005

u See back of form and separate instructions.

671105

Interest income

5a Ordinary dividends

5b Qualified dividends

6 Royalties

7 Net short-term capital gain (loss)

8a Net long-term capital gain (loss)

8b Collectibles (28%) gain (loss)

9 Net section 1231 gain (loss)

10 Other income (loss)

8c Unrecaptured section 1250 gain

15 Alternative minimum tax (AMT) items

17 Other information

For Privacy Act and Paperwork Reduction Act Notice, see Instructions for Form 1120S.

3 Other net rental income (loss)

H Shareholders percentage of stockownership for tax year . . . . . . . . . . . . . . . . . . %

ForIRSU

seOnly

* See attached statement for additional information.

2005For calendar year 2005, or tax

ISA


23/64

STF FED4269F.2

Schedule K-1 (Form 1120S) 2005 Page 2

This list identifies the codes used on Schedule K-1 for all shareholders and provides summarized reporting information forshareholderswho file Form 1040. For detailed reporting and filing information, see the separate Shareholders Instructions for Schedule K-1and theinstructions for your income tax return.

Ordinarybusiness income (loss).You must first determine whether theincome (loss) is passive or nonpassive. Then enter on your return asfollows: Enter onPassive loss See the Shareholders InstructionsPassive income Schedule E, line 28, column (g)Nonpassive loss Schedule E, line 28, column (h)

Nonpassive income Schedule E, line 28, column (j )Net rental real estate income (loss) See the Shareholders Instructions

Other net rental income (loss)

Net income Schedule E, line 28, column (g)Net loss See the Shareholders Instructions

Interest income Form 1040, line 8a

5a. Form 1040, line 9a

Form 1040, line 9b

Royalties Schedule E, line 4

Net short-term capital gain (loss) Schedule D, line 5, column (f)

Code

Net long-term capital gain (loss) Schedule D, line 12, column (f)

Collectibles (28%) gain (loss)

See the Shareholders InstructionsUnrecaptured section 1250 gain

28% Rate Gain Worksheet, line 4(Schedule D instructions)

Net section 1231 gain (loss) See the Shareholders Instructions

Other income (loss)

Section 179 deduction

A Other portfolio income (loss) See the Shareholders InstructionsB Involuntary conversions

Other deductions

C Sec. 1256 contracts & straddles Form 6781, line 1D Mining exploration costs recaptureE

A Cash contributions (50%)B

Noncash contributions (50%)C

Capital gain property to a 50%organization (30%)

D

Cash contributions (30%)

ENoncash contributions (30%)

F Capital gain property (20%)

Deductionsportfolio (2% floor)

H

Deductionsportfolio (other)

IInvestment interest expense

JDeductionsroyalty income

Form 4952, line 1

KSection 59(e)(2) expenditures

Schedule E, line 18

LReforestation expensededuction

See the Shareholders Instructions

Credits & credit recapture

A Low-income housing credit(section 42(j)(5)) Form 8586, line 4

B Low-income housing credit (other)C Qualified rehabilitation

expenditures (rentalreal estate)D Qualified rehabilitation

expenditures (other than rentalreal estate)

E Basis of energy propertyFG

Other rental real estate credits

J Work opportunity creditK Welfare-to-work creditL Disabled access credit

M Empowerment zone and renewalcommunity employment credit Form 8844, line 3

N Credit for increasing researchactivities

O New markets credit

See the Shareholders Instructions

Foreign transactions

A Name of country or U.S.possession Form 1116, Part I

B Gross income from all sources Form 1116, Part IC Gross income sourced at

shareholder level Form 1116, Part I

Foreign gross income sourced at corporate level

D Passive Form 1116, Part lE Listed categories Form 1116, Part IF General l imitation Form 1116, Part I

Deductions allocated and apportioned at shareholder level

G Interest expense Form 1116, Part IH Other Form 1116, Part I

Deductions allocated and apportioned at corporate level to foreign sourceincome

I Passive Form 1116, Part IJ Listed categories Form 1116, Part I

Other information

L Total foreign taxes paid Form 1116, Part I IM Total foreign taxes accrued Form 1116, Part IIN Reduction in taxes available for

credit Form 1116, line 12O Foreign trading gross receipts Form 8873P Extraterritorial income exclusion Form 8873Q Other foreign transactions See the Shareholders Instruction

Alternative minimum tax (AMT) items

A Post-1986 depreciation adjustmentSee theShareholdersInstructions andthe Instructions forForm 6251

B Adjusted gain or lossC Depletion (other than oil & gas)D Oil, gas, &geothermalgross incomeE Oil, gas, &geothermaldeductionsF Other AMT items

Other information

A

Look-back interestcompletedlong-term contracts

B

Look-back interestincome forecast

method

C

D

E

Recapture of section 179deduction

F

Section 453(l)(3) information

Code Enter on

Ordinary dividends

Qualified dividends

Othe

Documents

Business Tax Basics_index