Instructions For Form 2220 - Underpayment Of Estimated Tax By Corporations

adjusted seasonal installment may be less than the

Line 5c. Enter the amount from line 32g, Form 1120; line

required installment under the regular method for one or

28g, Form 1120-A; or the applicable line for other income

more due dates. Using one or both of these methods

tax returns.

may reduce or eliminate the penalty for those due dates.

Line 7. All filers (other than S corporations). Figure

the corporation’s 2003 tax the same way the amount on

Use Schedule A on pages 3 and 4 of Form 2220 to

line 6 of this form was determined, using the taxes and

figure one or more required installments. If Schedule A is

credits from its 2003 tax return. However, skip line 7 and

used for any payment due date, it must be used for all

enter on line 8 the amount from line 6 if either of the

payment due dates. To arrive at the amount of each

following applies.

required installment, Schedule A automatically selects

•

The corporation did not file a tax return for 2003 that

the smallest of:

•

showed a liability for at least some amount of tax.

The adjusted seasonal installment (if applicable),

•

The corporation had a 2003 tax year of less than 12

The annualized income installment (if applicable), or

•

months.

The regular installment under section 6655(d)(1)

(increased by any reduction recaptured under section

S corporations. Enter on line 7 the sum of:

6655(e)(1)(B)).

1. The total of the investment credit recapture tax and

the built-in gains tax shown on the return for the 2004 tax

Follow the steps below to determine which parts of the

year and

form have to be completed.

•

2. Any excess net passive income tax shown on the S

If the corporation is using only the adjusted seasonal

corporation’s return for the 2003 tax year.

installment method, check the box on line 1 of Part I and

complete Parts I and III of Schedule A.

•

If the 2003 tax year was less than 12 months, skip

If the corporation is using only the annualized income

line 7 and enter on line 8 the amount from line 6.

installment method, check the box on line 2 of Part I and

complete Parts II and III of Schedule A.

Line 9. The corporation is generally required to enter the

•

If the corporation is using both methods, check the

15th day of the 4th (Form 990-PF filers — use the 5th

boxes on lines 1 and 2 of Part I and complete all three

month), 6th, 9th, and 12th months of its tax year.

parts of Schedule A.

However, if one of those dates is September 15, 2004,

the corporation must complete two columns for that due

Line 3. Large corporations. A large corporation is a

date (as explained below). All other filers will complete

corporation (other than an S corporation) that had, or

only four columns (columns (a) through (d)) of Part II and

whose predecessor had, taxable income (defined below)

in column (d) they will enter “N/A” on lines 16 and 18.

of $1 million or more for any of the 3 tax years

If one of the regularly scheduled installment due dates

immediately preceding the 2005 tax year. A large

is September 15, 2004, complete two columns for that

corporation includes a “large organization” as defined in

installment. On line 9, enter September 15, 2004, in the

the instructions for Form 990-W.

first of the two columns, and October 1, 2004, in the

Taxable income, for this purpose, is modified to

second of the two columns. On line 10, enter 80% of the

exclude net operating loss and capital loss carrybacks

total required installment in the first of the two columns,

and carryovers. Members of a controlled group, as

and the remaining 20% in the second of the two columns.

defined in section 1563, must divide the $1 million

Line 10. Large corporations, follow the instructions

amount among themselves under rules similar to those in

below.

section 1561.

1. If the box on line 3 (but not line 1 or line 2) is

If the corporation is a large corporation, check the box

checked and line 6 is smaller than line 7, enter 25% of

on line 3 of Part I and, if applicable, check the box(es) on

line 6 in columns (a) through (d) of line 10.

line 1 and/or line 2 of Part I. Also, if applicable, complete

2. If the box on line 3 (but not line 1 or line 2) is

Parts I, II, and III of Schedule A, as discussed above.

checked and line 7 is smaller than line 6, enter 25% of

line 7 in column (a) of line 10. In column (b), figure the

Part II. Figuring the Underpayment

amount to enter as follows:

a. Subtract line 7 from line 6,

Line 4. Generally, enter the tax from line 31, Form 1120;

b. Add the result to the amount on line 6, and

line 27, Form 1120-A; or the applicable line for other

c. Multiply the total in item b above by 25%, and enter

income tax returns. However, if that amount includes any

the result in column (b).

tax attributable to a sale described in section 338(a)(1),

In columns (c) and (d), enter 25% of line 6.

do not include that tax on line 4. Instead, write “Sec. 338

3. If the box on line 3 and the box on line 1 and/or line

gain” and show the amount of tax in brackets on the

2 are checked, follow the instructions in items 1 and 2

dotted line next to line 4. This exclusion from the line 4

above by substituting line 35 of Schedule A for line 10

amount does not apply to transactions after October 22,

and complete the rest of Part III of Schedule A.

2004, if a section 338(h)(10) election is made.

Filers of Forms 990-PF, 990-T, 1120-F, 1120-L,

If a large corporation’s required installment (as

1120-ND, 1120-PC, 1120-REIT, 1120-RIC, 1120S, and

determined in items 1, 2, or 3 above) has a regularly

1120-SF. See the instructions for the appropriate tax

scheduled due date of September 15, 2004, complete the

return for the definition of tax for estimated tax purposes.

2 columns as described above in the line 9 instructions,

-2-

Instructions For Form 2220 - Underpayment Of Estimated Tax By Corporations - 2004 Page 2

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