Updated October 18, 2026. Quick answer: The last Schedule B questions ask whether a qualified subchapter S subsidiary election ended, whether the corporation made payments that require Forms 1099 and whether it filed them, whether it intends to self-certify as a qualified opportunity fund, and whether it received or disposed of a digital asset. Question 17 is printed as reserved for future use.
Question 13: qualified subchapter S subsidiary election
The form asks “During the tax year, was a qualified subchapter S subsidiary election terminated or revoked?” The instructions say “Answer “Yes” if, during the tax year, the corporation revoked a qualified subchapter S subsidiary (QSub) election or a QSub election of the corporation was terminated.” They continue: “see Regulations section 1.1361-5 for additional information.”
Questions 14a and 14b: Forms 1099
Question 14a reads “Did the corporation make any payments that would require it to file Form(s) 1099?” and question 14b reads “If “Yes,” did or will the corporation file required Form(s) 1099?”
The instructions say “If the corporation made any payment in 2025 that would require it to file any Form(s) 1099, check the “Yes” box for question 14a and answer question 14b.” Otherwise the corporation checks the “No” box and, in the instructions’ words, skips question 14b. Filing dates for one common form are at the Form 1099-NEC deadline page.
Question 15: qualified opportunity fund
The form asks “Does the corporation intend to selfcertify as a Qualified Opportunity Fund?” and then says “If “Yes,” complete and attach Form 8996.” The instructions say “To be certified as a qualified opportunity fund, the S corporation must file Form 1120-S and attach Form 8996, even if the corporation had no income or expenses to report.”
On the amount, the instructions say “The penalty reported on this line from Form 8996, line 15, is not due with the filing of this form.” They add “The IRS will send you a notice regarding the penalty reported on line 15.”
Question 16: digital assets
The form asks whether the corporation, at any time during the tax year, did either of two things: “(a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”
The instructions define the term: “Digital assets are any digital representations of value that are recorded on a cryptographically secured distributed ledger or any similar technology”. They give examples: “digital assets include non-fungible tokens (NFTs) and cryptocurrencies which include stablecoins.” The instruction on the answer is “Do not leave the question unanswered.” The corporation “must answer “Yes” or “No” by checking the appropriate box.”
The instructions list cases that call for a “Yes,” including “Received digital assets as payment for property or services provided;” and “Sold a digital asset;” They also list actions that, alone, generally do not require a “Yes”: “Holding a digital asset in a wallet or account.” and “Purchasing digital assets using U.S. or other real currency”.
For reporting, the instructions say “use Form 8949 to calculate the capital gain or loss and report that gain or loss on Schedule D (Form 1120-S).” That form is covered at Form 8949.
Question 17
The form prints question 17 as “Reserved for future use”, so there is nothing to answer on that line.
Where the number comes from
Question 13 comes from the corporation’s QSub election history, question 14 from its payment records and Form 1099 filing records, question 15 from the opportunity fund certification decision, and question 16 from wallet, exchange and payment records for the year. The questions before these are on the Schedule B questions 6 to 11 page.
Where it goes next
A “Yes” on question 15 means Form 8996 is attached and its line 15 amount is entered in the space on the form. Schedule B ends here, and the shareholder items start with Schedule K lines 1 to 4. The tax and payment lines on page 1 are on the lines 23 to 28 page. This page is part of the Form 1120-S line-by-line walk-through.
Edition and line numbers
This page reads the 2025 Form 1120-S and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form’s title line reads “U.S. Income Tax Return for an S Corporation” and the period line reads “For calendar year 2025 or tax year beginning”. Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its questions differently.
Common mistakes
- Answering the digital asset question only when something was sold. The instructions say “Received digital assets as payment for property or services provided;”
- Leaving question 16 blank because nothing happened. The instructions say “Do not leave the question unanswered.”
- Expecting a penalty to be paid with the return. The instructions say “is not due with the filing of this form.”
Related: Form 1120-S, Form 1099-NEC filing deadline, Form 8949, Form 1099-NEC and 1099-MISC boxes, and Schedule D.
Sources
- Instructions for Form 1120-S, U.S. Income Tax Return for an S Corporation (2025): https://www.irs.gov/pub/irs-pdf/i1120s.pdf
- Form 1120-S, U.S. Income Tax Return for an S Corporation (2025): https://www.irs.gov/pub/irs-pdf/f1120s.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.