Instructions For Form 1120-W - 2012 (Page 3 of 4) in pdf

Example. An amusement park with a calendar year as its

Large corporations figure the amount to enter on line 25 as

follows. If Schedule A is used, also follow these instructions to

tax year receives the largest part of its taxable income during

figure the amounts to enter on Schedule A, Part III, line 35.

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

•

If line 22 is smaller than line 23a: Enter 25% of line 22 in

base period percentage for this 6-month period in 2012, the

columns (a) through (d) of line 25.

amusement park figures its taxable income for each

•

If line 23a is smaller than line 22: Enter 25% of line 23a in

May – October period in 2009, 2010, and 2011. It then divides

column (a) of line 25. In column (b), determine the amount to

the taxable income for each May – October period by the total

enter as follows:

taxable income for that particular tax year. The resulting

percentages are 69% (.69) for May – October 2009, 74% (.74)

1. Subtract line 23a from line 22,

for May – October 2010, and 67% (.67) for May – October 2011.

2. Add the result to the amount on line 22, and

Because the average of 69%, 74%, and 67% is 70%, the base

3. Multiply the result in 2 above by 25% and enter the result

period percentage for May through October 2012 is 70%.

in column (b). Enter 25% of line 22 in columns (c) and (d).

Therefore, the amusement park qualifies for the adjusted

Special rule for corporations with assets of $1 billion or

seasonal installment method.

more. For a corporation with assets of $1 billion or more

Line 2

(determined as of the end of the preceding year), the amount of

the required installment due in July, August, or September 2012

If the corporation has certain extraordinary items, special rules

is increased to 100.5% of the amount otherwise due. The next

apply. Do not include on line 2 the de minimis extraordinary

required installment amount must be reduced to reflect the

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

increase in the previous installment amount.

Extraordinary items above.

Schedule A

Line 9b

If only the adjusted seasonal installment method (Part I) is

If the corporation has extraordinary items of $1,000,000 or

used, complete Parts I and III of Schedule A. If only the

more, a net operating loss deduction, or a section 481(a)

annualized income installment method (Part II) is used,

adjustment, special rules apply. Include these amounts on line

complete Parts II and III. If both methods are used, complete all

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

three parts. Enter in each column on page 1, Part I, line 25, the

minimis items that the corporation chooses to exclude from line

amounts from the corresponding column of line 38. If Schedule

2. See Extraordinary items above.

A is used for any payment date, it must be used for all payment

Line 10

dates.

Figure the tax on the amount on line 9c by following the same

Do not figure any required installment until after the end

steps used to figure the tax on Form 1120-W, page 1, line 14.

of the month preceding the due date for that installment.

Line 15. Alternative Minimum Tax

CAUTION

The corporation may owe AMT unless it will be a “small

Extraordinary items. Generally, under the annualized income

corporation” exempt from the AMT under section 55(e) for its

installment method, extraordinary items must be taken into

2012 tax year. To figure the AMT, use the 2011 Form 4626 and

account after annualizing the taxable income for the

its instructions as a guide. Figure alternative minimum taxable

annualization period. Similar rules apply in determining taxable

income (AMTI) using income and deductions for the months

income under the adjusted seasonal installment method. An

shown in the column headings above line 1. Divide the AMTI by

extraordinary item includes:

•

the amounts on line 8 before subtracting the exemption amount.

Any item identified in Regulations section

Multiply that result by 20% and subtract any AMT foreign tax

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

•

credit plus the amount on line 10 to arrive at the AMT. For

A net operating loss carryover;

•

columns (a) through (c), multiply the AMT by the amount shown

A section 481(a) adjustment; and

•

on line 13.

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

fair market value of the corporation’s business assets during the

Line 16. Other Taxes

tax year.

For the same taxes used to figure page 1, Part I, line 19, figure

These extraordinary items must be accounted for in the

the amounts for the months shown in the column headings

appropriate annualization period. However, a net operating loss

above line 1.

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

Line 18. Credits

corporation makes the alternative choice under Regulations

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

Enter the credits to which the corporation is entitled for the

occurring on the first day of the tax year in which the item is

months shown in the column headings above line 1.

taken into account in determining taxable income.

Part II. Annualized Income Installment

De minimis rule. Extraordinary items identified above that

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

Method

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

using the general rules of Regulations section 1.6655-2(f), or if

Line 20. Annualization Periods

the corporation chooses, may be taken into account after

annualizing the taxable income for the annualization period.

Enter in the space on line 20, columns (a) through (d),

respectively, the annualization periods that the corporation is

For more information regarding extraordinary items, see

using, based on the options listed below. For example, if the

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

corporation elects Option 1, enter on line 20 the annualization

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

periods 2, 4, 7, and 10, in columns (a) through (d), respectively.

section 1.6655-3(d)(3).

Use Option 1 or Option 2 only if the corporation elected

Part I. Adjusted Seasonal

to use one of these options by filing Form 8842, Election

Installment Method

To Use Different Annualization Periods for Corporate

CAUTION

Estimated Tax, on or before the due date of the first required

Complete this part only if the corporation’s base period

installment payment. Once made, the election is irrevocable for

percentage for any 6 consecutive months of the tax year equals

the particular tax year.

or exceeds 70% (.70). Figure the base period percentage using

the 6-month period in which the corporation normally receives

1st

2nd

3rd

4th

the largest part of its taxable income. The base period

Installment

percentage for any period of 6 consecutive months is the

Standard option

average of the three percentages figured by dividing the taxable

income for the corresponding 6-consecutive-month period in

Option 1 . . . . . .

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

Option 2 . . . . . .

each of their respective tax years.

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Instructions for Form 1120-W (2012)

Instructions For Form 1120-W - 2012 Page 3

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