Instructions For Form Ia 1120 - Iowa Corporation Income Tax Long Form

(2) Other interest, net dividends, capital and ordinary gains, and

For a corporation first doing business in Iowa, the inclusion of

royalties from intangibles must be included in the numerator

investment income determined to be business income in the

if the commercial domicile is in Iowa. See Iowa Rule 54.2(3)

business activity ratio of that year’s initial return is binding on all

for attributing certain income from intangibles.

subsequent years’ returns. The election to include business

investment income in the business activity ratio can later be

(3) Capital and ordinary gains, rent, and royalties from tangible

changed only with permission of the Director of the Iowa

and real property must be included in the numerator if the

Department of Revenue.

property is located in Iowa.

Instructions for Page Four

Schedule IA 4626

below zero, by 25% of the amount that line 13 exceeds

$150,000.

2. Enter the total amount from line 2a through 2o on federal form

4626.

18. If line 16 is greater than line 17, enter the difference as your

Iowa alternative minimum tax here and on the IA 1120, line

3. Enter the applicable amounts from lines 2l and 2m on federal

18. If line 16 is less than line 17, enter zero here and on IA

form 4626.

1120, line 18.

4. Subtract lines 3a and 3b from line 2.

Federal form 4626 must be attached to this return.

6. Enter the amount of adjusted current earnings adjustment

shown on line 4e of federal form 4626. If the amount includes

Schedule IA 8827

any interest from state and municipal bonds and regulated

Schedule 8827 and the AMT worksheet must be completed by

investment companies, IRC section 936 Puerto Rican

corporations to compute the alternative minimum tax credit, if

dividends, or FSC dividends, the amount must be recomputed.

any, for alternative minimum tax incurred in prior tax years and

Deduct any interest from state and municipal securities and

to compute any alternative minimum tax credit carryforward

regulated investment companies exempt from federal income

that may be used in future years.

tax, net of any amortization of any discount or premium, IRC

1. Enter carryforward of alternative minimum tax credit from the

section 936 Puerto Rican dividends, or FSC dividends from

worksheet, column E and on Part 1 of the IA 148 Tax Credit

the adjusted current earnings of the corporation from line 10

Schedule, column C.

of the federal Adjusted Current Earnings Adjustment

2. Enter the current period regular tax liability minus allowable

Worksheet. Multiply the amount by which adjusted line 10

nonrefundable credits.

of your federal Adjusted Current Earnings Adjustment

Worksheet exceeds line 3 of federal 4626 by 75% and enter

3. Enter the current period Iowa tentative minimum tax, line 16

on line 6 of IA 4626.

of your Schedule IA 4626.

12. The net operating loss entered here must be reduced by the

4. Subtract line 3 from line 2. If zero or less, enter zero.

amount of the items of tax preferences and adjustments arising

5. Alternative minimum tax credit: Enter the smaller of line 1

in the year of the net operating loss. The deduction for a net

or line 4 here and on Part I of form IA 148, column F.

operating loss applied to the current taxable year must not

6. Balance to carry forward to next tax period. Subtract line 5

exceed 90% of the alternative minimum taxable income

from line 1 and enter the difference.

determined without regard for the net operating loss deduction

7. Current period alternative minimum tax from line 18 of IA

on line 12. In effect, the deduction is limited to 90% of line

4626. Enter on IA 148, column D.

11.

8. Total AMT carryforward to next tax period. Add lines 6 and

14. The exemption amount of $40,000 must be reduced, but not

7 and enter total. Enter on IA 148, column H.

Special Instructions

carryforward to the extent of its regular corporation income tax

Service Companies: All gross receipts from the performance of

liability.

services are includable in the numerator of the activity ratio if the

recipient of the service receives all the benefit of the service in

Changes to Federal Net Income or Tax

Iowa. If the recipient of the service receives some of the benefit

The Department of Revenue has six months to make an

of the service in Iowa, the gross receipts are includable in the

examination and determination of the correct tax after receipt of

numerator of the activity ratio in proportion to the extent the

sufficient written notice of the final disposition of any matter

recipient receives benefit of the service in Iowa.

between the taxpayer and the Internal Revenue Service. A copy of

the federal document showing the final disposition or final federal

Alternative Minimum Tax

adjustments must be attached to the notice in order to begin the 6-

A small business corporation or a new corporation for its first year

month period.

of existence, which through the operation of Internal Revenue Code

section 55(e) is exempt from the federal alternative minimum tax,

To constitute notice “sufficient to inform the Department,” the

is not subject to Iowa alternative minimum tax. A small business

notice must be supplied under separate cover and not as a part of

corporation may apply any alternative minimum tax credit

the return for the current period.

Legal Information

information on this return cannot be released to anyone who is not

Confidentiality and Fair Information Practices Notice -

Information from this return may be made available to the Internal

an Iowa Department of Revenue or Internal Revenue Service

Revenue Service or to tax officials of another state under a tax

employee. Any Department of Revenue employee who discloses

tax information without legal authority is subject to a fine of

information exchange program. Except as allowed by law,

$1,000.

42-002f (09/18/12)

Instructions For Form Ia 1120 - Iowa Corporation Income Tax Long Form - 2012 Page 6

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