Corp Taxes Flashcards
Foreign tax credit
Credit or deduction
Includes two computations for limits, less than ok compare below with for paid amts
1. For non business related interest earned
2. Other for source taxable income
1st after AMT, FCT, AET, PHC
LIM: us income tax (for source inc/ ww taxable income
Excess: 1b 10f
Consolidated returns exclusions NONO
Tax exempt org S Corp Foreign sales Corp Ins Corp Real estate inv trusts Regulated investment co Dom international sales Corp Sec 936 possessions tax credit
Affiliated groups
80% voting power AND
80% total value outstanding
Tax yr of parent
Election only reversed by consent of irs
Consolidation - separately reported
Operating losses of one group member may be used to offset operating profits of the other members included in the consolidated return
Charitable cont DRD %depletion NOL Sect 1231 Cap g/l
Intercompany transactions
Buyer assumes sales basis Consolidated gain or loss: Acquiring Corp claims depreciation One member leaves Disposition outside of the group
Brother - sister controlled group
80% owned by same 5 or fewer or
> 50% of voting power of all classes
INDIVIDUALS, trusts, estates
Constructive ownership
Family member € spouse
Or entity wit > 5% interest
Limit on control group benefits
Only one: Tax brackets Sec 179 25k max Amt exemption $base Gem bus credit $25 AET 250 presumed deduction base
AMT
- tax pref items \+/- adjustments \+ ACE - AMT NOL = AMTI - AMT exemption = AMTI BASE x rate - FT CRED = TENTATIVE MIN TAX - regular tax = AMT
AMT TAX PREFERENCE ITEMS
Excess depreciation
Tax exempt bonds
Small business stock
Adjustments
Accelerated depreciation Real prop - SL 40 mid-mo Personal prop - 150% Section 1250 - SL NO Installment sales Long term contracts - % of completion Pollution control facilities - sec 168 Mining & exploring & (R&D, circulation 3 yrs) - capitalized and AMORT 10yr except for tax loss of abandonment NOL - MODIFY NOL TO THE SAME EXTENT
ACE adjusted current earnings
When computing ACE (AMTI includes ACE + NOL adj)
+Organizational exp Amort and deducted are added
+ 70% DRD
+ life ins PROCEEDS
+ LIFO recapture = FIFO>LIFO
= ACE-AMTI x 75%
ACE > AMTI = add ACE ADJ
ACE
ACE NONCHANGES
LT CAP GAINS
DRD 80% or 100%
Debt discharge
Tax exempt interest 2009 & 2010
Corp AMT TAX RATES
20%
AMT NOL
Previous yr NOL
CURRENT YR - lim 90% of the AMTI
AMT EXEMPTION
Reduces AMTI to produce AMTI BASE
Exemption = 40k with TH of 150k
max= 150k
= .25 on the dollar above TH
AMT FCT
= FTC
Or
90% of gross Tent AMT B4 NOL orFTC
AMT MTC - Individual
Difference if tax favorable deferred items
= Recent yrs AMT wo ded and add carryover MTC
ONLY DEFERED ITEMS
AMT MTC - corporations
Both deferred and exclusion items Gross regular tax - credits - TMT MTC max allowable, excess is carried over indefinitely
Gross regular tax amt is reduced by: Currently allowable: Refundable credits No refundable personal items For tax Drug testing Nonconv source fuel credits General bus credit
Small Corp AMT exemption
5 mil avg income for first 3 yrs
7.5 mil avg beyond
Taxes due
Estimated On the 15th of
4, 6, 9, 12 mo
Difference = 15th of 3rd mo following yr end
Estimated tax payments
25% of the lesser of
100% of prior years tax
Or 100% of current yrs tax
Estimated based on annual, not seasonal
Large Corp makeup
Taxable income of > 1 mil during any one of 3 prev yrs
Penalty
Amt by which any required installment exceeds est tax paid
5% ( 3% ind)
Installment due date until underpayment is paid or if earlier the due date for filing the tax return F2220 submitted w/return
No est penalty if:
Tax liab is less than $500
Waived
Large Corp wd
Refund
Quick refund - only if overpayment is >500 and >10% Corp est tax liability
Form 4466 after close before tax due
AET
15% tax on ATI accumulated taxable income
No offsetting
Subsequent earnings distributions do not helping
No form determined by irs audit
No “carry back”
No AET ON ENTITIES
S Corp Tax exempt PHC FPHC PFIC