Instructions For Form 2220 - 2009 (Page 3 of 4) in pdf

Line 19. A payment of estimated tax is applied against

using the 6-month period in which the corporation normally

unpaid required installments in the order in which

receives the largest part of its taxable income.

installments are required to be paid, regardless of the

Example. An amusement park with a 2009 calendar tax

installment to which the payment pertains.

year receives the largest part of its taxable income during

the 6-month period from May through October. To compute

Example. A corporation underpaid the April 15

its base period percentage for this 6-month period in 2009,

installment by $1,000. The June 15 installment requires a

the amusement park figures its taxable income for each

payment of $2,500. On June 10, the corporation deposits

May – October period in 2006, 2007, and 2008. It then

$2,500 to cover the June 15 installment. However, $1,000 of

divides the taxable income for each May – October period by

this payment is applied against the April 15 installment. The

the total taxable income for that particular tax year. The

penalty for the April 15 installment is figured from April 15 to

resulting percentages are: 69% (.69) for May – October

June 10 (56 days). The remaining $1,500 is applied to the

2006, 74% (.74) for May – October 2007, and 67% (.67) for

June 15 installment.

May – October 2008. Because the average of 69%, 74%,

If the corporation has made more than one payment for a

and 67% is 70%, the base period percentage for

required installment, attach a separate computation for each

May – October 2009 is 70%. Therefore, the amusement park

payment.

qualifies for the adjusted seasonal installment method.

Line 2. If the corporation has certain extraordinary items,

Schedule A

special rules apply. Do not include on line 2 the de minimis

items that the corporation chooses to include on line 9b. See

Extraordinary items. Generally, under the annualized

Extraordinary items on this page.

income installment method, extraordinary items must be

taken into account after annualizing the taxable income for

Line 9b. If the corporation has extraordinary items of

the annualization period. Similar rules apply in determining

$1,000,000 or more, a net operating loss deduction, or a

taxable income under the adjusted seasonal installment

section 481(a) adjustment, special rules apply. Include these

method. An extraordinary item includes:

amounts on line 9b for the appropriate period. Also include

•

Any item identified in Regulations section

on line 9b the de minimis items that the corporation chooses

1.1502-76(b)(2)(ii)(C)(1), (2),(3),(4), (7) and (8);

to exclude from line 2. See Extraordinary items on this page.

•

A net operating loss carryover;

•

Line 15. Compute the alternative minimum tax (AMT) on

A section 481(a) adjustment; and

•

Form 4626, Alternative Minimum Tax-Corporations, if

Net gain or loss from the disposition of 25% or more of

applicable. Figure alternative minimum taxable income

the fair market value of the corporation’s business assets

(AMTI) based on the corporation’s income and deductions

during the tax year.

for the months shown in the column headings directly above

These extraordinary items must be accounted for, in the

line 1. For each column, divide the AMTI by the amount

appropriate annualization period. However, a net operating

shown on line 8 before subtracting the AMT exemption

loss deduction and a section 481(a) adjustment (unless the

amount under section 55(d). Enter on line 15, column (d),

corporation makes the alternative choice under Regulations

the AMT determined for column (d). For columns (a) through

section 1.6655-2(f)(3)(ii)(C)) are treated as extraordinary

items occurring on the first day of the tax year in which the

shown in columns (a) through (c) of line 13 and then enter

item is taken into account in determining taxable income.

on line 15 the result for each column.

De minimis rule. Extraordinary items identified above

Line 16. Enter on line 16 any other taxes the corporation

that are less than $1,000,000 (other than a net operating

owed for the months shown in each column heading directly

loss carryover or a section 481(a) adjustment) may be

above line 1. Include the same taxes used to figure Part I,

annualized using the general rules of Regulations section

line 1 of Form 2220, but do not include the personal holding

1.6655-2(f), or, if the corporation chooses, may be taken into

company tax and interest due under the look-back method

account after annualizing the taxable income for the

of section 460(b)(2) for completed long-term contracts or

annualization period.

section 167(g)(2) for property depreciated under the income

forecast method.

In Part II of Schedule A, make the appropriate

adjustments to annualized taxable income before figuring

Line 18. Enter the credits the corporation is entitled to for

the estimated tax for each reporting period. Similar

the months shown in each column heading above line 1.

adjustments must be made, if applicable, to Part I of

Part II. Annualized Income Installment

Schedule A, if the adjusted seasonal installment method

applies. See the instructions for lines 2, 9b, 21 and 23b.

Method

For more information regarding extraordinary items, see

Line 20. Annualization periods. Enter on line 20, columns

Regulations section 1.6655- 2(f)(3)(ii) and the examples in

(a) through (d), respectively, the annualization periods for

Regulations section 1.6655-2(f)(3)(vii). Also see Regulations

the option shown in the tables below. For example, if the

section1.6655-3(d)(3).

corporation elected Option 1, enter on line 20 the

annualization periods 2, 4, 7, and 10, in columns (a) through

Part I. Adjusted Seasonal Installment

(d), respectively.

Method

Use Option 1 or Option 2 only if the corporation

The corporation can use the adjusted seasonal installment

elected to do so by filing Form 8842, Election To Use

method only if the corporation’s base period percentage for

Different Annualization Periods for Corporate

CAUTION

any 6 consecutive months of the tax year is 70% or more.

Estimated Tax, by the due date of the first required

The base period percentage for any period of 6 consecutive

installment payment. Once made, the election is irrevocable

months is the average of the 3 percentages figured by

for the particular tax year.

dividing the taxable income for the corresponding

6-consecutive-month period in each of the 3 preceding tax

Option 2 is not available to tax-exempt organizations and

years by the total taxable income for each of the 3 preceding

private foundations. See the options shown in the table on

tax years, respectively. Figure the base period percentage

page 4 for these entities.

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Instructions For Form 2220 - 2009 Page 3

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