Corporate Income Flashcards
T/F: The general income and deduction rules are the same rules for corporations?
TRUE!
What is the tax rate for corporations?
21% FLAT RATE
T/F: The AMT does not apply for corporations?
True
What is the carry back rules for capital losses for a corporation?
Carry back three forward 5
No deduction is allowed, you can only offset capital losses against capital gains
What is a personal service corp?
Most of the activity is being performed by those who own substantially all of the stock (accounting firm, engineering firm). Those who own the stock, perform the service.
What is a closely held corp?
At anytime, during the last 6 months of the year, the stock is owned by 5 or fewer individuals
What are the passive loss rules for corporations?
They do not apply to corporations because it shouldn’t come into play for a corp.
They do apply to closely held closely held corps.
Personal service corporations, it applies just like an individual
What is the schedule M-1 reconciliation? (HIGHLY TESTED)
Reconciliation of book income to taxable income based off permanent differences and timing differences
What are nondeductible expenses that are added back to book income?
Federal expenses, net capital loss, expenses in excess of limits
What is a schedule M-3?
Corporations that have total assets greater than $10 million or more must complete a schedule M-3 instead of a Schedule M-1.
What are the NOL rules for corporations post 2017?
NOL can not be carried back but can be carried for indefinitely
What is the NOL Limit?
80% of taxable income
