Deck 13 Flashcards
Bonus accruals must be paid by when?
March 15
Business losses or casualty losses
100% deductible (individual casualty losses are treated differently
When are bonuses paid by an accrual basis taxpayer deductible?
In the year when all events have occurred that establish a liability with reasonable accuracy
Taxes that are deductible for corporation:
State income, city income, federal payroll; federal income tax not deductible, add back to book income
General business credit for corporations (formula) =
May not exceed “net income tax” less the greater of: 1) 25% of regular tax liability above $25,000 or 2) TMT
Entities for which the DRD does not apply:
Personal service companies, personal holding companies, and (personally taxed) S corporations
Dividends received deduction; take the lesser of:
1) 70% of Taxable income before DRD or 2) 70% of the dividends received; if there is a loss, you can take the larger amount
Three taxes for corporations:
1) regular tax 2) minimum tax 3) accumulated earnings tax or personal holding companies tax
Exemption amount for corporations is:
$40,000 less 25% of AMTI in excess of $150,000
Tax rate on AMTI =
20%
Accumulated earnings tax:
For C corporations whose accumulated earnings are in excess of $250,000
Personal Holding company
More than 50% owned by 5 or fewer individuals and having 60% of adjusted ordinary income
NIRD (Personal holding company)
Net rent, interest that is taxable, Royalties, Dividends
To avoid penalties, if a taxpayer owes $1,000 or more in tax payments beyond withholdings, such taxpayer will need to have paid in for taxes the lesser of:
1) 90% of the current year’s tax or 2) 100% of the previous year’s tax
If a taxpayer has AGI in excess of $150,000 in the prior year, _______ of the prior year’s tax liability is used to compute the safe harbor for estimated payments (to avoid penalties)
110%
