Federal Tax Basics
This form is used to file a U.S. corporation income tax return.
What is form 1120
When is an item deductible for a cash-basis taxpayer?
When cash is actually or “constructively” received/paid
What are the two types of tax adjustments?
Temporary or Permanent
What is the Internal Revenue Code section that covers UNICAP?
§263A
Do NOL's reduce or increase income?
Reduce
What is the tax form used to calculate an interest expense limitation?
Form 8990
The M-3 needs to be filed if corporation total assets are equal to or over what amount?
$10 Million
This type of business would most likely be subject to UNICAP?
- Retailers
- Wholesalers
- Manufacturers
- Builders
Do you multiply gross income or taxable income by the tax rate?
Taxable income
Which of the following items is not included in the definition of interest expense? Debt Issuance Costs, Upfront Fees, Original Issue Discount, Financing Interest
Debt issuance costs
A favorable M-1 adjustment increases this or decreases this?
Increase deductions or decrease income
Under a qualified share based compensation plan, when does the employer receive a deduction?
At the time of contribution.
On what form 1120 schedule is the tax calculated?
Schedule J
When are license fees incurred for tax purposes?
IRC §451(b) has been effective for years beginning after which date?
December 31, 2017
For a stock repurchase excise tax, the repurchase base may be netted/adjusted by this ____?
The issuance of stock that is made during the period, including equity compensation to employees.
What schedule reflects taxable income but shows more detail on how the business got from book income to taxable income?
Schedule M-3
What is one of the components of the All-Events Test?
- All events must have occurred that fix the liability (payment is unconditionally due or performance has occurred
- Amount of liability can be determined with reasonable accuracy
- Economic Performance has occurred
The "All Events Test" is applicable to taxpayers who use what method of accounting?
Accrual method of accounting
These lines on the Schedule M-3 are used to reflect equity compensation activity.
Part 3, Line 9 - Stock Option Expense and Part 3, Line 10, Other Equity Based Compensation