Form 0405-611 - 2006 Alaska Corporation Net Income Tax Return Instructions (Page 3 of 10) in pdf

FORM 0405-611 - 2006 ALASKA CORPORATION NET INCOME TAX RETURN

INSTRUCTIONS

Alaska imposes both the federal excess net passive income tax

WATER’S EDGE FILING

and the corporate level tax on built-in gains. These taxes are

A corporation that is a member of an affiliated group must file

calculated at the highest Alaska marginal tax rate of 9.4%.

using the water’s edge method of reporting. The use of the

However, the Alaska capital gains rate of 4.5% may apply in

water’s edge combined method is required by Alaska; it is not

some cases.

If corporate level taxes are imposed, attach

elective. Refer to instructions starting on this page explaining

copies of the schedules and forms calculating the federal tax

the water’s edge method of reporting.

and the Alaska tax.

Enter the corporate level taxes on

Schedule E – SF, line 4, or Schedule E, line 7 as appropriate.

FILING A CONSOLIDATED RETURN

Two or more Alaska taxpayers included in the same federal

PARTNERSHIP

consolidated return, who are engaged in a common unitary

A partnership doing business in the state with one or more

business, must file a consolidated Alaska return.

Additionally,

corporate partners must file an information return.

To file,

any two or more taxpayers, engaged in a common unitary

submit the following portions of the partnership’s federal return,

business may elect to file a consolidated return if they qualify to

Form 1065:

join in a consolidated federal return. Foreign corporations are

treated as domestic corporations for purposes of determining

A copy of the signed Form 1065, pages 1 through 4, with

eligibility to file a consolidated Alaska return.

If any two

“Alaska” marked at the top of page one.

taxpayers engaged in a common unitary business join in filing a

consolidated Alaska return, all eligible taxpayers of the common

A copy of Schedule K-1 for each corporate partner.

unitary business must be included in the consolidated return.

Note: All corporate partners of partnerships doing business in

ATTACHMENT OF FEDERAL RETURN

Alaska must file an Alaska Corporation Net Income Tax Return.

A corporation must provide a complete copy of the signed

federal income tax return (Form 1120, 1120S, 990-T, etc.)

LIMITED LIABILITY COMPANY (LLC)

which includes the corporation(s) filing the Alaska return. The

An LLC doing business in the state must file an Alaska return

copy must be of the return actually filed with the Internal

consistent with its federal tax status. If the LLC is characterized

Revenue Service for the same taxable year.

If the federal

as a corporation for federal income tax purposes, the LLC must

return of the taxpayer was part of a consolidated return, submit

file a return in accordance with the instructions applicable to

a copy of the consolidated federal return in which the taxpayer

corporations. An LLC with corporate member(s) characterized

was included.

Affiliated taxpayers electing to file an Alaska

as a partnership for federal income tax purposes, must follow

consolidated return must include a complete copy of each

the instructions applicable to partnerships with corporate

federal income tax return of those corporations filing the Alaska

partners. An LLC taxable as a partnership, but which has no

return. A pro forma return will not fulfill this requirement.

corporate members, is not required to file a return or report.

Failure to provide the required federal return(s) will result

in the Alaska return being deemed incomplete.

INACTIVE CORPORATION

A corporation with no business activity in Alaska and no income

Note: If the federal return exceeds 50 pages, a corporation

from Alaska sources must file an information report if it is

must submit the following portions of the required federal return

registered with the Alaska Department of Community &

in lieu of the entire federal return:

Economic Development or has an Alaska business license.

This requirement may be satisfied in one of two ways:

A copy of pages 1 through 4 of federal Form 1120, 1120S,

1120F, etc. for the tax year. Attach copies of schedules

If the corporation is affiliated with an Alaska taxpayer, this

and attachments filed in response to questions 3 and 5 of

reporting requirement may be satisfied by reporting the

Form 1120, Schedule K.

inactive corporation on Schedule B, question #1 of the

affiliated taxpayer’s return. If so, do not check “Yes” for

Schedule D and supporting schedules.

“information report of an inactive corporation” on page one

of Form 0405-611 of the active taxpayer’s return.

Credits: If claimed on the Alaska return, include copies of

Form 3800, along with applicable supporting federal Forms

To report separately, complete Form 0405-611 or 0405-611SF,

and schedules for each credit reported on Form 3800.

page one only and check “Yes” for “information report of an

inactive corporation.” Schedules A through L need not be

Other Taxes: Form 4626 with supporting schedules and

completed. No other attachments are required.

attachments.

Include

Form

8827

with

supporting

schedules and attachments if applicable.

Note: The filing of an information report for an inactive

corporation does not constitute the filing of a return.

Extension: Form 7004 if applicable.

EXEMPT ORGANIZATION

Where a consolidated federal return is filed, attach copies

An exempt organization is subject to the Alaska Corporation

of the schedules prepared for the computation of

Net Income Tax to the same extent it is subject to tax under the

consolidated taxable income. The schedules must show

Internal Revenue Code. If a federal tax is imposed, complete

the separate taxable incomes for each member of the

Form 0405-611 or 0405-611SF reporting the taxable income and

federal

consolidated

group

with

the

consolidating

calculating the tax. Attach a signed copy of Form 990-T. If no

eliminations

and

adjustments

made

arrive

federal tax is imposed, organizations need not file an Alaska

consolidated taxable income.

return.

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Form 0405-611 - 2006 Alaska Corporation Net Income Tax Return Instructions Page 3

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