Ch 16.2

consolidated

Filing a __________ tax return allows the losses of one group member to offset the income of other members.

M-2

Form 1120 also requires corporations to complete Schedule __________, which provides reconciliation of the corporation's beginning and ending balance in its unappropriated retained earnings from its financial accounting balance sheet (reported on Schedule L).

1120

Form __________ includes a schedule for corporations to report their book-tax differences and reconcile their book and taxable income.

realized

Income from certain intercompany transactions is deferred until __________ through a transaction outside of the affiliated group.

Schedule M adjustments

__________ are book-tax differences that corporations report on the Schedule M-1 or M-3 of Form 1120 as adjustments to book income to reconcile to taxable income.

april 15

A calendar-year corporation's unextended tax return due date is __________.

affiliated group

An __________ exists when one corporation owns at least 80% of (1) the total voting power and (2) the total stock value of another corporation.

consolidated tax return

An affiliated group of corporations may elect to file a consolidated tax return - that is, the group files a tax return as if it were on entity for tax purposes.

15th

Corporations paying quarterly installments have payments due on the __________ day of the 4th, 6th, 9th, and 12th months of their tax year.

6

Corporations requesting an extension can extend the due date for filing their tax returns (not for paying the taxes) for __________ months (October 15 for calendar-year corporations).

2220

Corporations that have underpaid their estimated taxes for any quarter must pay an underpayment penalty calculated on Form __________. The amount is based on the underpayment rate (or interest rate), the amount of the underpayment, and the period of the underpayment.

september 15

Corporations with a June 30 year-end have a __________ due date (the 15th day of the 3rd month following the end of the fiscal year), and the extended due date will continue to be seven months after thee regular due date (April 15) through the fiscal year ending June 30, 2026.

500

Corporations with a federal income tax liability of $__________ or more are required to pay their tax liability for the year in quarterly estimated installments.

M-3

Corporations with total assets of $10,000,000 or more are required to report their book-tax differences on Schedule __________.

M-1

Corporations with total assets of less than $10,000,000 report their book-tax differences on Schedule __________.

250000

Corporations with total receipts and total assets of less than $__________ are not required to complete Schedules L, M-1, and M-2.

25 50 75 100

Generally, corporations are subject to underpayment penalties if they did not pay __________, __________, __________, and __________% of their required annual payment with their 1st, 2nd, 3rd, and 4th installment payments, respectively.

1000000

Large corporations, defined as those with over $__________ of taxable income in any of the 3 years prior to the current year, may use the prior-year tax liability to determine their first quarter estimated tax payments only. If they do this, their 2nd quarter payment must catch up their estimated payments.

realized

Losses from certain intercompany transactions are deferred until __________ through a transaction outside of the affiliated group.

annualized income method

The __________ is a method for determining a corporation's required estimated tax payments when the taxpayer earns more income later in the year than earlier in the year. Requires corporations to base their first and second required estimated tax installments on their income from the first 3 months of the year, their 3rd installment based on their taxable income from the first 6 months of the year, and the final installment based on their taxable income from the first 9 months of the year.

3

The interest rate for underpayment penalties is generally the federal short-term rate plus __________%.

due date

The period of the underpayment penalty is the __________ for the installment through the earlier of (1) the date the payment is made or (2) the due date of the tax return without extensions. The penalties are not deductible.

estimated annual tax payment

The required __________ is the least of (1) 100% of the tax liability on the prior year's return, but only if there was a positive tax liability on the return and the prior-year return covered a 12-month period, (2) 100% of the current-year tax liability (corporations usually don't rely on this method to compute the required payments because they won't know what their current-year liability is until they complete their tax returns - after the estimated tax due dates), or (3) 100% of the estimated current-year tax liability using the annualized income method.

3.5

The tax return due date for most C corporations (those with a tax year-end other than June 30) is __________ months after the corporation's year end.

underpayment penalties

When corporations file their tax returns, they determine whether they must pay estimated __________.