Corporation Basics
This term describes the owners of a corporation.
What are SHAREHOLDERS?
Corporations pay this type of tax on their profits.
What is corporate income tax?
When a corporation’s expenses are greater than its income, it has this.
What is a net operating loss (NOL)?
Corporations pay taxes at these two levels of government.
What are federal and state?
Corporations must hold these meetings regularly to stay compliant.
What are board/shareholder meetings?
A corporation is considered this type of legal entity, separate from its owners.
What is a separate legal entity?
When both the corporation and its shareholders are taxed on the same income, it’s called this.
What is double taxation?
NOLs can be used to reduce taxable income in these years.
What are future years? Carryforward
This is the term for differences between federal and state taxable income.
What are state modifications?
This annual statement is often required by states to keep a corporation in good standing.
What is an annual report?
This document is filed to create a corporation.
What are articles of incorporation?
Corporations must file these in every state where they do business
What are state tax returns?
If a company loses $5,000 this year and earns $10,000 next year, it only pays taxes on this amount.
What is $5,000?
This process ensures each state gets its fair share of a corporation’s income.
What is apportionment?
This is the term for money a corporation pays to its shareholders from profits.
What are dividends?
The group responsible for managing a corporation’s overall direction
What is the board of directors?
This term refers to the process of dividing income among states for tax purposes.
The main benefit of NOLs is that they help companies do this with their tax liabilities over time
What is smooth out ups and downs (reduce taxes in profitable years)?
True or False: All states use the same rules for taxing corporations.
What is False?
This document shows a corporation’s income, expenses, and profit for a period.
This characteristic means a corporation continues to exist even if ownership changes
What is perpetual existence?
These are changes states make to federal taxable income.
What are state modifications?
The government currently allows NOLs to be carried forward for this many years.
What is indefinitely (with limitations)?
When a corporation operates in multiple states, it must file this in each state.
What is a state tax return?
True or False: Deloitte Tax is a corporation.
What is False?