Exam Review SU#8 Flashcards
A corporation paying additional tax of $400 on the final 2013 return filed before the extended due date.
Interest is due on the $400 tax payment. Interest accrues from the date the payment was due until it is received by the IRS.
The general Business Tax Credit of $25,000 from a controlled group of corporation is treated
Section 38(c)(B) provides that the credit must be apportioned among members as the regulations provide and allows the members to apportion the amount in any manner they choose [Reg. 1.46-1(p)(2)]
Regarding the prior-year alternative minimum tax credit
Corporations are allowed a credit for the full amount of AMT paid in a tax year against regular tax liability in one or more subsequent tax year(s). Any minimum tax credit amount is carried forward indefinitely.
2011
Available MTC (from 2010) $85,000
Total tax liability (regular tax) $80,000
Tentative min. tax (75,000)
Max MTC allowed 5,000
MTC carry forward $80,000
2012-2013
MTC Available $80,000
MTC Used 0 MTC Available for 2014 $80,000
The corporation considered to be an includible corporation in an affiliate group of corporations is
Includible Group: means any corporation except those listed as not includible.
- Tax-exempt corporations
- S Corporation
- (FSC) Foreign Sales Corporations
- Insurance Corporations
- (REIT) Real estate Investment Trust)
- Regulated Investment Companies
- (DISC) Domestic International Sales Corporations)
- Corporations That claim Sec. 936 possession tax credit
A corporation with a tax liability of $100,000. What amount must be paid quarterly to avoid any penalty or interest for underpayment of estimated taxes.
Sec. 6655(b) provides that a corporation will not be considered to have underpaid its income tax of it pays the lesser of:
- 100% of the tax shown on the current return
- 100% of the tax shown on prior year return
- It also included the alternative minimum tax
A large corporation may use all of the following methods to figure all 4 required installments of estimated tax
- The annualized income installment method
- The 25% of the Corps. income tax for the current year
- The adjusted seasonal installment method
The Accumulated Earnings Credit is defined as
the increase in the reasonable needs of a business during the tax year. The credit is $250,000 for non-service corporations
A consolidated NOL is allowed only to a
prior or subsequent year of a consolidated election
The percentage-of-completion method must be used to
determine AMTI and must be used for AMT and regular tax. The completed contract method is NOT used.
Adjustments to AMTI to compute ACE include:
- Organizational exp. amortized & deducted (sec.248) are added
- The 70% DRD attributable to
The amount of ACE adjustment is
75% of the difference between ACE & AMTI
Only one credit is allowed in computing AMT
The AMT (FTC) foreign Tax Credit
No (PHC) Personal Holding Company Tax Liability is incurred by
- S Corporations
- Tax-exempt corporations
- FPHC Foreign Personal Holding Companies
- Banks
- Insurance Companies
Consent Dividends
address a situation of current accumulated earnings with insufficient liquidity to distribute dividends
Accumulated Earnings tax can be imposed
Regardless of the number of shareholders in a corporation.
A PHC tax is assessed on the undistributed PHCI of many C corporations. It is self-assessed when
50% or more of the value of the corps. shares are owned by 5 or less shareholders at any time during the last half of the fiscal year & 60% or more of AGO id PHCI and includes:
1. Taxable interest income and dividends, but not tax-exempt interest
