R4 - Tax Comp & Credits Flashcards
1
Q
Small Corps
A
Required to pay lesser of:
- 100% of tax shown on tax return OR
- 100% of tax shown for the preceding year.
2
Q
Large Corps
A
Income was >$1MM
- 100% of tax shown on tax return
3
Q
General Business Credit (includes many other credits)
- Can be carried back 1 yr and forward 20 years
A
- Net Tax Liab = Tax due - 25,000
- Disallowed Business Tax Credit = Net Tax Liab * 25%
- Allowed Business Tax Credit = Total Biz Credit - Disallowed Business Tax Credit.
4
Q
Gral Biz Credit: Research and Development
A
(Qualified research expenditures - Defined base amount) * 20%
5
Q
FTC
- Can be carried back 1 yr and forward 10 years
A
- Determine qual’d foreign income taxes paid or accrued
- Compute FTC limitation as follows:
a. US Tax Liab = Worldwide taxable income * 21%
b. % of FSI = Foreign taxable income/Worldwide taxable income
c. Foreign Tax Limitation = US Tax Liab * % of FSI - Use lesser of #1 or #2
If #2 is used (FTC limited), then #1 minus #2 is CB 1 Yr and CF 10 Yrs.
6
Q
FTC Limitation
A
US tax paid * (Foreign Sourced Income/Total Taxable Income)
7
Q
MTC
A
- Ratchet sister of AMT
- Will be refunded
- 50% refund until 2020; 100% beginning 2021.
8
Q
Accumulated Earnings Tax
A
- Imposed on C-Corps
- Credit when RE is >$250,000; then it applies
- Imposed to avoid Corps to hold RE to avoid SH taxation.
- 20% Rate
(+) Taxable income before Charity, DRD, NOL, Net Cap Loss C/O
(-) All charity
(-) All dividends
(-)
Accumulated Taxable income
9
Q
Personal Holding Company Tax
A
- Credit when RE is > $150,000, then it applies
- 20% Rate of personal holding company income not distributed.
10
Q
Personal Holding Company N = Net Rent I = Interest (taxable only) R = Royalties D = Dividends
A
- Owned by >5 individuals
- At least 60% of adj ordinary gross income is investment income
11
Q
PSC
A
A = Accounting L = Law A = Actuarial science C = Consulting H = Health E = Engineering A = Architecture
