R3&4 Flashcards
Threshhold to avoid penalty for underpayment of income taxes (C Corp)
$500 (if basing on current year tax due) or amt of tax due last year
*100% of CY tax due if large corp. ($1M+ T.I. in any of last 3 tax years)
Accumulated Earnings Tax is not imposed on:
Personal Holding Companies
NOL carryback/forward (2018-2020)
Back: 5 years
Forward: indefinitely
NOL carryback/forward (2021+)
Back: Never
Forward: indefinitely
Net capital loss carryback/forward
Back: 3 years
Forward: 5 years
“Ultramares” rule, what parties is CPA liable to for negligence?
1) Parties in privity; and
2) intended 3rd party beneficiaries (parties who the CPA knows will rely on the decision)
*merely “foreseen” parties cannot recover
What parties is CPA liable to for negligence [Restatement rule (majority), not Ultramares rule (minority)]?
1) Parties in privity; and
2) Any foreseen or known 3rd party who will rely on his work
Covered Opinion
Any written or electronic advice concerning listed transactions
Rental income is recognized when?
When cash is received
Personal Holding Company (PHC) classification requirements
1) over 50% owned by 5 or fewer individuals
2) 60% or more of AGI is from PHC income (securities/rent/royalties)
How long does taxpayer have to submit a petition w/ Tax court or pay the deficiency after disagreeing to IRS adjustments?
90 days
Taxpayer has 30 days to do what after receiving a 30 day letter during an IRS audit
30 days to agree to IRS adjustments or request an administrative appeals conference
Required estimated payments by C corps
Lesser of 100% of CY or PY tax. If a large corporation (T.I. over $1M in any of 3 previous years) must pay 100% of CY tax.
S Corp election is effective as of Jan 1 of current year if made by what date?
March 15th
