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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10132
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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On a Corporate (C corporation)return (1120) are state taxes

Customer Question

On a Corporate (C corporation)return (1120) are state taxes deducted for the current year on the current year return. If in 2015 the corporation made est. state tax payments of $4000 and the state tax burden was $5000, is the $4000 in est payments deducted on the 2015 return.
Submitted: 5 months ago.
Category: Tax
Expert:  Lane replied 5 months ago.

Hi,

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Yes, when the liability is state income or franchise taxes, economic performance occurs when the tax is paid because such taxes are payment liabilities under the economic performance rules. (1) Estimated tax payments are generally included as a payment for this purpose.(2)

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(1) Treas. Regs. § 1.461-4(g)(6)(i)

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(2) Preamble to T.D. 8408, 57 Fed. Reg. 12411 (4/10/92)

Expert:  Lane replied 5 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Thanks

Lane