Form 1120-W - Estimated Tax For Corporations

Form 1120-W (WORKSHEET) 1997

Page

Line 8

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

respectively.

Enter the credits to which the corporation is entitled for the

Caution: Use Option 1 or Option 2 only if the corporation

months shown in each column on line 1. Do not annualize any

elected to do so by filing Form 8842, Election To Use Different

credit. However, when figuring the credits, annualize any item of

Annualization Periods for Corporate Estimated Tax, on or before

income or deduction used to figure the credit. For more details,

the due date of the first required installment payment. Once

see Rev. Rul. 79-179, 1979-1 C.B. 436.

made, the election is irrevocable for the particular tax year.

Line 12

Option

1st Inst.

2nd Inst. 3rd Inst. 4th Inst.

Before completing line 12 in columns (b) through (d), complete

the following items in each of the preceding columns: line 13;

Standard option

Part II (if applicable); and Part III. For example, complete line 13,

Part II (if using the adjusted seasonal installment method), and

Option 1

Part III, in column (a) before completing line 12 in column (b).

Option 2

Part II—Adjusted Seasonal Installment Method

Line 2

Complete this part only if the corporation’s base period

percentage for any 6 consecutive months of the tax year equals

If a corporation has income includible under section 936(h)

or exceeds 70%. The base period percentage for any period of 6

(Puerto Rico and possessions tax credits) or section 951(a)

consecutive months is the average of the three percentages

(controlled foreign corporation income), special rules apply.

figured by dividing the taxable income for the corresponding

Amounts includible in income under section 936(h) or 951(a)

6-consecutive-month period in each of the 3 preceding tax years

(and allocable credits) generally must be taken into account in

by the taxable income for each of their respective tax years.

figuring the amount of any annualized income installment as the

Example. An amusement park with a calendar year tax year

income is earned. The amounts are figured in a manner similar

receives the largest part of its taxable income during a 6-month

to the way in which partnership income inclusions (and allocable

period, May through October. To compute its base period

credits) are taken into account in figuring a partner’s annualized

percentage for this 6-month period, the amusement park figures

income installments as provided in Regulations section

its taxable income for each May–October period in 1994, 1995,

1.6654-2(d)(2).

and 1996. It then divides the taxable income for each May–

Safe harbor election.—Corporations may be able to elect a

October period by the total taxable income for that particular tax

prior year safe harbor election. Under the election, an eligible

year. The resulting percentages are 69% (.69) for May–October

corporation is treated as having received ratably during the tax

1994, 74% (.74) for May–October 1995, and 67% (.67) for May–

year items of income under sections 936(h) and 951(a) (and

October 1996. Because the average of 69%, 74%, and 67% is

allocable credits) equal to a specified percentage of the amounts

70%, the base period percentage for May through October 1997

shown on the corporation’s return for the first preceding tax year

is 70%. Therefore, the amusement park qualifies for the adjusted

(the second preceding tax year for the first and second required

seasonal installment method.

installments).

For more information, see section 6655(e)(4) and Rev. Proc.

Line 30

95-23, 1995-1 C.B. 693.

Enter any other taxes the corporation owed for the months

Line 3

shown in the column headings above line 14 of Part II. Include

the same taxes used to figure lines 17 and 18 of Form 1120-W.

Annualization amounts.—Enter the annualization amounts for

Compute the alternative minimum tax by figuring alternative

the option used on line 1. For example, if the corporation elects

minimum taxable income under section 55. Alternative minimum

Option 1, enter on line 3 the annualization amounts 6, 3,

taxable income is based on the corporation’s income and

1.71429, and 1.2, in columns (a) through (d), respectively.

deductions for the months shown in the column headings above

line 14 of Part II. Divide the alternative minimum taxable income

Option

1st Inst.

2nd Inst. 3rd Inst. 4th Inst.

by the amounts shown on line 21. Subtract the exemption

amount under section 55(d)(2). For columns (a) through (c) only,

Standard option

1.33333

multiply the alternative minimum tax by the amounts shown on

Option 1

1.71429 1.2

line 28.

Option 2

2.4

1.5

1.09091

Line 32

Enter the credits to which the corporation is entitled for the

Line 6

months shown in the column headings above line 14 of

Enter any other taxes the corporation owed for the months

Part II.

shown in the headings used to figure annualized taxable income.

Include the same taxes used to figure lines 17 and 18 of Form

Line 34

1120-W.

Before completing line 34 in columns (b) through (d), complete

Compute the alternative minimum tax by figuring alternative

lines 35 through 41 in each of the preceding columns. For

minimum taxable income under section 55. Alternative minimum

example, complete lines 35 through 41 in column (a) before

taxable income is based on the corporation’s income and

completing line 34 in column (b).

deductions for the annualization period entered in each column

on line 1. Multiply alternative minimum taxable income by the

annualization amounts (line 3) used to figure annualized taxable

income. Subtract the exemption amount under section 55(d)(2).

Form 1120-W - Estimated Tax For Corporations - 1997 Page 6

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