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I have a small C corp that has income from sale of property…

I have a small...

I have a small C corp that has income from sale of property in the last 2 weeks of the 2017 tax years, and losses in the previous 11 months. The tax years 2014, 2015, 2016 also have losses in every quarter. The 2220 form instructions do not address losses. How do I figure my penalty for underpayment when the only income was in the last month of 2017?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

I am closing the corporation as of EOY 2017.

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Answered in 20 hours by:
3/15/2018
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,137
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

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You have a couple of items here. First of all, if you have losses for each quarter of 2014, 2015, and 2016, you should have a Net Operating Loss that if you did not carry it back in 2014 to 2013 you should be carrying it forward. So this loss will offset some of the profit that you have that you are calculating your underpayment on.

Secondly, if you look at Page 3 of the Form 2220, that is where the annualized method us used. It does not go down to the last month, but it does use the last quarter, so this method would reduce your penalty.

I hope this answers your question. If you have any more, or have numbers that you would like me to look at, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

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I have not heard back from you. Do you have any further questions?

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Customer reply replied 4 months ago
No, thanks, ***** ***** completely.

Great! Please don't forget to rate me, as that is how questions are closed.

Thanks!

Roger

taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,137
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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