Taxes: Corporate Income Flashcards Preview

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Flashcards in Taxes: Corporate Income Deck (4)
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1

Taxes:
Corporate Income
Corporate Tax Formula

Corporate Tax Formula:
Realized Income
- Nonrecognition of Income:
Deferrals and Exclusions COGS
= Gross Income
- Deductions
= Taxable Income Before Special Deductions
- Special Deductions
= Taxable Income
X Rate
= Gross Tax
- Credits & Payments
+ Other Taxes
= Net Tax

2

Taxes:
Corporate Income
General

Special Rules
- No Deduction for Net Capital Loss
- can choose fiscal year unless "S" Corp (calendar)
- Accrual Accounting is Required except Small

3

Taxes:
Corporate Income
Book Income vs Taxable Income (Schedule M-1)

Book Income vs Taxable Income (Schedule M-1)
- taxable income before dividends received and net capital loss deductions
- corps with $10M assets or more
Computation
- nondeductible added back (federal tax exp, net capital loss, expenses in excess of limits)
- income taxable but not included in book income added back (prepaids)
- nontaxable income included in book is subtracted (municipal interest, life insurance proceeds)
- deductions not expenses in book income are subtracted (drd and election to expense)
Schedule M-3

4

Taxes:
Corporate Income
Net Operating Loss

Net Operating Loss
- negative taxable income carried from other years
- back 2 and forward 20
- carryover not included in calculating current NOL
- current year carryover ignores prior year NOL
- charitable contributions not allowed

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