Corporation Flashcards
charitable contributions
deduction up to 10% of AGI
business casualty/loss
100% deductible
no $100 reduction OR 10% of AGI
organizational expenditures
deduct $5000 or org costs and $5000 of start-up costs
reduced by amount of excess of $50k expenses
excess of $5k is amortized over 180 months
organizational expenditures excluded costs
costs to issue/sell stock, commissions, underwriter’s fees, and transfer costs
goodwill
amortized on straight-line basis for 15 years
life insurance premiums
corp beneficiary - nondeductible
employee beneficiary - deductible
state/local/payroll taxes
deduction
federal income taxes
NOT deductibble
capital losses
up to $3000 deduction to offset capital gains
capital loss carryover
3 back 5 forward
net operating loss carryover
2 back 20 forward
uniform capitalization rules
raw materials, direct labor, overhead
general business credit
may not exceed net income tax
greater of:
1) 25% regular tax liability above $25k
2) tentative min tax for year
dividends received reduction (DRD)
prevents triple taxation
DRD for < 20% ownership
70%
DRD for 20-80% ownership
80%
DRD for > 80% ownership
90%
DRD does not apply to…
PPP
personal service corp
personal holding companies
personally taxed S corp
DRD taxable income limitation
lesser of:
DRD calculation
% of TI without regard to DRD, NOL, capital loss, domestic production
DRD for affiliated corporation
100%
DRD for SBIC
100%
affiliated corporation
company parent owns 80% or more of voting power of all outstanding stock OR 80% or more of all outstanding stock
brother/sister corp
NOT consolidated
AMT adjustment
add/subtract to income
LID
long term contracts (%age completion required)
installment sales (installment method not allowed)
depreciation adjustments (diff between regular depreciation method vs AMT method)
AMT preferences
not taxed but add backs for AMT PPP percentage depletion private activity bond interest pre '87 ACRS depreciation
AMT adjusted current earnings (ACE)
add/subtract MOLDD muni interest income organizational expense amortization life insurance proceeds on key employees depreciation difference between AMT and ACE dividends received deduction (under 20%)
75% of difference between ACE and AMTI before adjustment and alternative tax NOL deduction
AMT credits
reduces minimum tax
AMT tax credit carryforward
reduces future regular tax
ADS depreciation system
straight line method over 40 years
adjust from regular tax depreciation (27.5, 31.5, 39 years)
MACRS depreciation
double declining method
tax-exempt interest on private activity bonds
exempt from taxable income but not an AMT preference so add mack to calculation of unadjusted AMTI
unadjusted AMTI
AMTI after adjustments, preferences
AMT exemption
$40,000
- 25% (AMTI excess of $150k)
= allowed exemption
