Corporate Taxable Inome_M2

Question 1

Who is required to file taxes under the accrual basis?

Average annual gross receipts of $29 million or moe over a 3-year period

Answer 1

• Tax shelters
• Large C corporations (average annual gross receipts over three-year period greater than $29 million)
• Manufacturers.
• Companies who buy and sell inventory.

NOTE: The IRS has the authority to require that a taxpayer use a method of accounting to accurately reflect the proper income and expenses.

Question 2

What is Dividends Received Deductions DRD rules?

Answer 2

50% DRD for 0-20% unaffiliated ownership
65% DRD for 20%-80% ownership related party
100% DRD for 80% or more affiliated member

Question 3

How is life insurance treated for corporations?

Answer 3

• Term Life is not covered under federal taxes only whole life.