Instructions For Form 1120-W - Estimated Tax For Corporations - 2017 Page 3

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Fiscal-year taxpayers: Enter the 15th day of the 4th, 6th,
in each column on page 1, Part I, line 25, the amounts from the
9th, and 12th months of your tax year in columns (a) through (d).
corresponding column of line 38. If Schedule A is used for any
If the due date falls on a Saturday, Sunday, or legal holiday,
payment date, it must be used for all payment dates.
enter the next business day.
Do not figure any required installment until after the end
Line 25. Required Installments
of the month preceding the due date for that installment.
!
CAUTION
Payments of estimated tax should reflect any 2016 overpayment
Extraordinary items. Generally, under the annualized income
that the corporation chose to credit against its 2017 tax. The
installment method, extraordinary items must be taken into
overpayment is credited against unpaid required installments in
account after annualizing the taxable income for the
the order in which the installments are required to be paid.
annualization period. Similar rules apply in determining taxable
If the corporation uses the annualized income installment
income under the adjusted seasonal installment method. An
method and/or the adjusted seasonal installment method, or is a
extraordinary item includes:
"large corporation," see the instructions below.
Any item identified in Regulations section 1.1502-76(b)(2)(ii)
(C)(1), (2), (3), (4), (7), and (8);
Annualized income installment method and/or adjusted
A net operating loss carryover;
seasonal installment method. If the corporation's income is
A section 481(a) adjustment; and
expected to vary during the year because, for example, it
Net gain or loss from the disposition of 25% or more of the fair
operates its business on a seasonal basis, it may be able to
market value of the corporation's business assets during the tax
lower the amount of one or more required installments by using
year.
the annualized income installment method and/or the adjusted
These extraordinary items must be accounted for in the
seasonal installment method. For example, a ski shop, which
appropriate annualization period. However, a net operating loss
receives most of its income during the winter months, may be
deduction and a section 481(a) adjustment (unless the
able to benefit from using one or both of these methods in
corporation makes the alternative choice under Regulations
figuring one or more of its required installments.
section 1.6655-2(f)(ii)(C)) are treated as extraordinary items
To use one or both of these methods, complete Schedule A.
occurring on the first day of the tax year in which the item is
If Schedule A is used for any payment date, it must be used for
taken into account in determining taxable income.
all payment due dates. To get the amount of each required
De minimis rule. Extraordinary items identified above that
installment, Schedule A automatically selects the smallest of (a)
are less than $1,000,000 (other than a net operating loss
the annualized income installment (if applicable), (b) the
carryover or a section 481(a) adjustment) may be annualized
adjusted seasonal installment (if applicable), or (c) the regular
using the general rules of Regulations section 1.6655-2(f), or if
installment under section 6655(d)(1) (increased by any
the corporation chooses, may be taken into account after
recapture of a reduction in a required installment under section
annualizing the taxable income for the annualization period.
6655(e)(1)(B)).
For more information regarding extraordinary items, see
Large corporations. A large corporation is a corporation that
Regulations section 1.6655-2(f)(ii) and the examples in
had, or whose predecessor had, taxable income of $1 million or
Regulations section 1.6655-2(f)(vii). Also see Regulations
more for any of the 3 tax years immediately preceding the 2017
section 1.6655-3(d)(3).
tax year, or if less, the number of years the corporation has been
Part I. Adjusted Seasonal
in existence. For this purpose, taxable income is modified to
exclude net operating loss and capital loss carrybacks or
Installment Method
carryovers. Members of a controlled group, as defined in section
1563, must divide the $1 million amount among themselves
Complete this part only if the corporation's base period
according to rules similar to those in section 1561.
percentage for any 6 consecutive months of the tax year equals
or exceeds 70% (.70). Figure the base period percentage using
Large corporations figure the amount to enter on line 25 as
the 6-month period in which the corporation normally receives
follows. If Schedule A is used, also follow these instructions to
the largest part of its taxable income. The base period
figure the amounts to enter on Schedule A, Part III, line 35.
percentage for any period of 6 consecutive months is the
If line 22 is smaller than line 23a: Enter 25% of line 22 in
average of the three percentages figured by dividing the taxable
columns (a) through (d) of line 25.
income for the corresponding 6-consecutive-month period in
If line 23a is smaller than line 22: Enter 25% of line 23a in
each of the 3 preceding tax years by the taxable income for each
column (a) of line 25. In column (b), determine the amount to
of their respective tax years.
enter as follows:
1. Subtract line 23a from line 22,
Example. An amusement park with a calendar year as its tax
year receives the largest part of its taxable income during the
2. Add the result to the amount on line 22, and
6-month period from May through October. To compute its base
3. Multiply the result in 2 above by 25% and enter the result
period percentage for this 6-month period in 2016, the
in column (b). Enter 25% of line 22 in columns (c) and (d).
amusement park figures its taxable income for each May–
Corporations with assets of $1 billion or more (determined as
October period in 2014, 2015, and 2016. It then divides the
of the end of the corporation's preceding tax year), must
taxable income for each May–October period by the total taxable
increase the required installment of estimated tax due in July,
income for that particular tax year. The resulting percentages are
August, or September of 2017 by 0.25% of the amount that
69% (.69) for May–October 2014, 74% (.74) for May–October
otherwise would have been due for that installment. The amount
2015, and 67% (.67) for May–October 2016. Because the
of the next required installment would be decreased by an equal
average of 69%, 74%, and 67% is 70%, the base period
amount to reflect the increase in the previous installment.
percentage for May through October 2017 is 70%. Therefore,
the amusement park qualifies for the adjusted seasonal
Schedule A
installment method.
If only the adjusted seasonal installment method (Part I) is used,
complete Parts I and III of Schedule A. If only the annualized
income installment method (Part II) is used, complete Parts II
and III. If both methods are used, complete all three parts. Enter
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Instructions for Form 1120-W (2017)

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