Form 1120-W - Estimated Tax For Corporations

Form 1120-W (WORKSHEET) 1997

Page

Lines 2, 4, and 6

Line 23

Members of a controlled group.—Members of a controlled

Calendar year taxpayers: Enter 4-15-97, 6-16-97, 9-15-97, and

group enter on line 2 the smaller of the amount on line 1 or their

12-15-97, respectively, in columns (a) through (d).

share of the $50,000 amount. On line 4, enter the smaller of the

Fiscal year taxpayers: Enter the 15th day of the 4th, 6th, 9th,

amount on line 3 or their share of the $25,000 amount. On line

and 12th months of your tax year in columns (a) through (d). If

6, enter the smaller of the amount on line 5 or their share of the

the regular due date falls on a Saturday, Sunday, or legal

$9,925,000 amount.

holiday, enter the next business day.

Equal apportionment plan.—If no apportionment plan is

Line 24

adopted, members of a controlled group must divide the amount

in each taxable income bracket equally among themselves. For

Payments of estimated tax should reflect any 1996 overpayment

example, Controlled Group AB consists of Corporation A and

that the corporation chose to credit against its 1997 tax.

Corporation B. They do not elect an apportionment plan.

Annualized income installment method and/or adjusted

Therefore, each corporation is entitled to:

seasonal installment method.—If the corporation’s income is

$25,000 (one-half of $50,000) on line 2,

expected to vary during the year because, for example, it

$12,500 (one-half of $25,000) on line 4, and

operates its business on a seasonal basis, it may be able to

lower the amount of one or more required installments by using

$4,962,500 (one-half of $9,925,000) on line 6.

the annualized income installment method and/or the adjusted

Unequal apportionment plan.—Members of a controlled

seasonal installment method. For example, a ski shop, which

group may elect an unequal apportionment plan and divide the

receives most of its income during the winter months, may be

taxable income brackets as they want. There is no need for

able to benefit from using one or both of these methods in

consistency among taxable income brackets. Any member may

figuring one or more of its required installments.

be entitled to all, some, or none of the taxable income bracket.

To use one or both of these methods to figure one or more

However, the total amount for all members cannot be more than

required installments, use Schedule A on pages 2 and 3. If

the total amount in each taxable income bracket.

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

Line 12

payment due dates. To arrive at the amount of each required

installment, Schedule A automatically selects the smallest of

Members of a controlled group are treated as one group to

(a) the annualized income installment, (b) the adjusted seasonal

figure the applicability of the additional 5% tax and the

installment (if applicable), or (c) the regular installment under

additional 3% tax. If an additional tax applies, each member will

section 6655(d)(1) (increased by any reduction recapture under

pay that tax based on the part of the amount used in each

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

taxable income bracket to reduce that member’s tax. See

Large corporations.—A large corporation is a corporation that

section 1561(a). Each member of the group must enter on line

had, or its predecessor had, taxable income of $1 million or

12 its share of the smaller of 5% of the taxable income in

more for any of the 3 tax years immediately preceding the 1997

excess of $100,000, or $11,750.

tax year. For this purpose, taxable income is modified to exclude

Line 13

net operating loss or capital loss carrybacks or carryovers.

Members of a controlled group, as defined in section 1563, must

If the additional 3% tax applies, each member of the controlled

divide the $1 million amount among themselves according to

group must enter on line 13 its share of the smaller of 3% of the

rules similar to those in section 1561.

taxable income in excess of $15 million, or $100,000. See Line

If the annualized income installment method or adjusted

12 above.

seasonal installment method is not used, follow the instructions

Line 15

below to figure the amounts to enter on line 24. (If the

annualized income installment method and/or the adjusted

For information on tax credits the corporation may take, see the

seasonal installment method are used, these instructions apply

discussion of credits in the Instructions for Form 1120, lines 4a

to line 37 of Schedule A.)

through 4e, Schedule J (Form 1120-A, lines 2a and 2b, Part I), or

If line 21 is smaller than line 22a: Enter 25% of line 21 in

the instructions for the applicable line and schedule of other

columns (a) through (d) of line 24.

income tax returns. Also see the information on the research

If line 22a is smaller than line 21: Enter 25% of line 22a in

credit in Changes To Note on page 4.

column (a) of line 24. In column (b), determine the amount to

Line 18

enter as follows:

1. Subtract line 22a from line 21,

Alternative minimum tax is generally the excess of tentative

minimum tax for the tax year over the regular tax for the tax

2. Add the result to the amount on line 21, and

year. See section 55 for definitions of tentative minimum tax and

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

regular tax. A limited amount of the foreign tax credit may be

in column (b).

used to offset the minimum tax. See sections 55 through 59 for

Enter 25% of line 21 in columns (c) and (d).

more information on alternative minimum tax.

Schedule A

Line 20

If only the annualized income installment method (Part I) is used,

Complete Form 4136, Credit for Federal Tax Paid on Fuels, if

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

the corporation qualifies to take this credit. Include on line 20

seasonal installment method (Part II) is used, complete Parts II

any credit the corporation is claiming under section 4682(g)(4) for

and III. If both methods are used, complete all three parts. Enter

tax on ozone-depleting chemicals.

in each column on line 24, page 1, the amounts from the

Line 22a

corresponding column of line 41.

Caution: Do not figure any required installment until after the

Figure the corporation’s 1996 tax in the same way that line 21 of

end of the month preceding the due date for that installment.

this worksheet was figured, using the taxes and credits from the

1996 income tax return.

Part I—Annualized Income Installment Method

If a return was not filed for the 1996 tax year showing a

liability for at least some amount of tax, or if the 1996 tax year

Line 1

was for less than 12 months, do not complete line 22a. Instead,

Annualization periods.—Enter in the space on line 1, columns

skip line 22a and enter the amount from line 21 on line 22b.

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

Large corporations, see the instructions for line 24 below.

corporation is using, based on the options described below. For

example, if the corporation elects Option 1, enter on line 1 the

Form 1120-W - Estimated Tax For Corporations - 1997 Page 5

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