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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2309
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: 11 months ago.
Category: Tax
Expert:  Mark Taylor replied 11 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 11 months ago.
No, it was an overpayment of Federal Taxes from previous year
Expert:  Mark Taylor replied 11 months ago.

Was the overpayment applied to the next year?

Customer: replied 11 months ago.
No, they received a ch/. which was deposited into the C Corp. business account
Expert:  Mark Taylor replied 11 months ago.

On the 1120 you would not need to do anything.

Customer: replied 11 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 11 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 11 months ago.
Profit of 1,1876.00, is a cash bases
Expert:  Mark Taylor replied 11 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 11 months ago.
Bonus to shareholders, is 1099 needed to be issued....shareholders pay taxes on it?
Expert:  Mark Taylor replied 11 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.