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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1608
Experience:  Certified Public Accountant
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1120 - Federal Tax Refund ($3,875.00) received...How do I

Customer Question

1120 - Federal Tax Refund ($3,875.00) received...How do I report it in Form 1120?
Submitted: 3 months ago.
Category: Tax
Expert:  Mark Taylor replied 3 months ago.

Hi, my name is Mark. I will be happy to help you with your questions. Was the tax refund from the insurance company?

Customer: replied 3 months ago.
No, it was an overpayment of Federal Taxes from previous year
Expert:  Mark Taylor replied 3 months ago.

Was the overpayment applied to the next year?

Customer: replied 3 months ago.
No, they received a ch/. which was deposited into the C Corp. business account
Expert:  Mark Taylor replied 3 months ago.

On the 1120 you would not need to do anything.

Customer: replied 3 months ago.
Can A c corporation defer gains ? In other words if a c corporation has a large gain having to pay large amount in taxes can split it in several years?
Expert:  Mark Taylor replied 3 months ago.

It depends on the situation. Can you give me more information about the gain? Do you report on the cash basis or accrual basis?

Customer: replied 3 months ago.
Profit of 1,1876.00, is a cash bases
Expert:  Mark Taylor replied 3 months ago.

If the gains have been realized. That is the corporation received the cash then most likely it would need to be recognized as income.

There are a few things that you can do. Could a portion of the profit be paid as bonuses for the officers? Do you need to buy any equipment?

Customer: replied 3 months ago.
Bonus to shareholders, is 1099 needed to be issued....shareholders pay taxes on it?
Expert:  Mark Taylor replied 3 months ago.

Bonus would be subject to payroll taxes. These would be reported on a W-2. Yes these would be taxable to the officers. The benefit would that this would avoid the double taxation that is associated with C-Corporations.