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File 2011 Tax Return

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File 2011 Tax Return

File 2011 tax return Publication 929 - Additional Material Table of Contents How To Get Tax HelpLow Income Taxpayer Clinics This image is too large to be displayed in the current screen. File 2011 tax return Please click the link to view the image. File 2011 tax return Form 1040A, page 1, for Joshua A. File 2011 tax return Blake This image is too large to be displayed in the current screen. File 2011 tax return Please click the link to view the image. File 2011 tax return Form 1040A, page 2, for Joshua A. File 2011 tax return Blake This image is too large to be displayed in the current screen. File 2011 tax return Please click the link to view the image. File 2011 tax return Form 8615 for Joshua A. File 2011 tax return Blake Filled-in Qualified Dividends and Capital Gain Tax Worksheet #1 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. File 2011 tax return Enter the amount from Form 1040A, line 27 1. File 2011 tax return 48,800*       2. File 2011 tax return Enter the amount from Form 1040A, line 9b 2. File 2011 tax return 300*           3. File 2011 tax return Enter the amount from Form 1040A, line 10 3. File 2011 tax return 200*           4. File 2011 tax return Add lines 2 and 3 4. File 2011 tax return 500       5. File 2011 tax return Subtract line 4 from line 1. File 2011 tax return If zero or less, enter -0- 5. File 2011 tax return 48,300       6. File 2011 tax return Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying widow(er),   or 6. File 2011 tax return 48,800*         $48,600 if head of household. File 2011 tax return                   7. File 2011 tax return Enter the smaller of line 5 or line 6 7. File 2011 tax return 48,300       8. File 2011 tax return Subtract line 7 from line 6. File 2011 tax return This amount is taxed at 0% 8. File 2011 tax return   500       9. File 2011 tax return Enter the smaller of line 1 or line 4 9. File 2011 tax return 500       10. File 2011 tax return Enter the amount from line 8 10. File 2011 tax return   500       11. File 2011 tax return Subtract line 10 from line 9 11. File 2011 tax return  -0-       12. File 2011 tax return Multiply line 11 by 15% (. File 2011 tax return 15) 12. File 2011 tax return -0-   13. File 2011 tax return Use the Tax Table to figure the tax on the amount on line 5. File 2011 tax return Enter the tax here 13. File 2011 tax return 6,356   14. File 2011 tax return Add lines 12 and 13 14. File 2011 tax return 6,356   15. File 2011 tax return Use the Tax Table to figure the tax on the amount on line 1. File 2011 tax return Enter the tax here 15. File 2011 tax return 6,431   16. File 2011 tax return Tax on all taxable income. File 2011 tax return Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. File 2011 tax return 6,356       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 9 tax in the Form 8615 instructions. File 2011 tax return Filled-in Qualified Dividends and Capital Gain Tax Worksheet #2 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. File 2011 tax return Enter the amount from Form 1040A, line 27 1. File 2011 tax return 1,650*       2. File 2011 tax return Enter the amount from Form 1040A, line 9b 2. File 2011 tax return 750*           3. File 2011 tax return Enter the amount from Form 1040A, line 10 3. File 2011 tax return 500*           4. File 2011 tax return Add lines 2 and 3 4. File 2011 tax return 1,250       5. File 2011 tax return Subtract line 4 from line 1. File 2011 tax return If zero or less, enter -0- 5. File 2011 tax return  400       6. File 2011 tax return Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. File 2011 tax return 1,650*         $48,600 if head of household. File 2011 tax return                   7. File 2011 tax return Enter the smaller of line 5 or line 6 7. File 2011 tax return   400       8. File 2011 tax return Subtract line 7 from line 6. File 2011 tax return This amount is taxed at 0% 8. File 2011 tax return 1,250       9. File 2011 tax return Enter the smaller of line 1 or line 4 9. File 2011 tax return 1,250       10. File 2011 tax return Enter the amount from line 8 10. File 2011 tax return 1,250       11. File 2011 tax return Subtract line 10 from line 9 11. File 2011 tax return -0-       12. File 2011 tax return Multiply line 11 by 15% (. File 2011 tax return 15) 12. File 2011 tax return -0-   13. File 2011 tax return Use the Tax Table to figure the tax on the amount on line 5. File 2011 tax return Enter the tax here 13. File 2011 tax return 41*   14. File 2011 tax return Add lines 12 and 13 14. File 2011 tax return 41   15. File 2011 tax return Use the Tax Table to figure the tax on the amount on line 1. File 2011 tax return Enter the tax here 15. File 2011 tax return 166*   16. File 2011 tax return Tax on all taxable income. File 2011 tax return Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. File 2011 tax return 41       *See the instructions under Using the Qualified Dividends and Capital Gain Tax Worksheet for line 15 tax in the Form 8615 instructions. File 2011 tax return Filled-in Qualified Dividends and Capital Gain Tax Worksheet #3 Before you begin: Be sure you do not have to file Form 1040 (see the instructions for Form 1040A, line 10) 1. File 2011 tax return Enter the amount from Form 1040A, line 27 1. File 2011 tax return 2,450       2. File 2011 tax return Enter the amount from Form 1040A, line 9b 2. File 2011 tax return 1,050           3. File 2011 tax return Enter the amount from Form 1040A, line 10 3. File 2011 tax return 700           4. File 2011 tax return Add lines 2 and 3 4. File 2011 tax return 1,750       5. File 2011 tax return Subtract line 4 from line 1. File 2011 tax return If zero or less, enter -0- 5. File 2011 tax return    700       6. File 2011 tax return Enter the smaller of:                 •The amount on line 1, or                   •$36,250 if single or married filing separately,                   $72,500 if married filing jointly or qualifying   widow(er), or 6. File 2011 tax return 2,450         $48,600 if head of household. File 2011 tax return                   7. File 2011 tax return Enter the smaller of line 5 or line 6 7. File 2011 tax return  700       8. File 2011 tax return Subtract line 7 from line 6. File 2011 tax return This amount is taxed at 0% 8. File 2011 tax return 1,750       9. File 2011 tax return Enter the smaller of line 1 or line 4 9. File 2011 tax return 1,750       10. File 2011 tax return Enter the amount from line 8 10. File 2011 tax return 1,750       11. File 2011 tax return Subtract line 10 from line 9 11. File 2011 tax return -0-       12. File 2011 tax return Multiply line 11 by 15% (. File 2011 tax return 15) 12. File 2011 tax return -0-   13. File 2011 tax return Use the Tax Table to figure the tax on the amount on line 5. File 2011 tax return Enter the tax here 13. File 2011 tax return  71   14. File 2011 tax return Add lines 12 and 13 14. File 2011 tax return  71   15. File 2011 tax return Use the Tax Table to figure the tax on the amount on line 1. File 2011 tax return Enter the tax here 15. File 2011 tax return 246   16. File 2011 tax return Tax on all taxable income. File 2011 tax return Enter the smaller of line 14 or line 15 here and on Form 1040A, line 28 16. File 2011 tax return  71         How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. File 2011 tax return Free help with your tax return. File 2011 tax return   You can get free help preparing your return nationwide from IRS-certified volunteers. File 2011 tax return The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. File 2011 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. File 2011 tax return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. File 2011 tax return In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. File 2011 tax return To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. File 2011 tax return gov, download the IRS2Go app, or call 1-800-906-9887. File 2011 tax return   As part of the TCE program, AARP offers the Tax-Aide counseling program. File 2011 tax return To find the nearest AARP Tax-Aide site, visit AARP's website at www. File 2011 tax return aarp. File 2011 tax return org/money/taxaide or call 1-888-227-7669. File 2011 tax return For more information on these programs, go to IRS. File 2011 tax return gov and enter “VITA” in the search box. File 2011 tax return Internet. File 2011 tax return    IRS. File 2011 tax return gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. File 2011 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. File 2011 tax return Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. File 2011 tax return Check the status of your 2013 refund with the Where's My Refund? application on IRS. File 2011 tax return gov or download the IRS2Go app and select the Refund Status option. File 2011 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. File 2011 tax return Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. File 2011 tax return You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. File 2011 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. File 2011 tax return Use the Interactive Tax Assistant (ITA) to research your tax questions. File 2011 tax return No need to wait on the phone or stand in line. File 2011 tax return The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. File 2011 tax return When you reach the response screen, you can print the entire interview and the final response for your records. File 2011 tax return New subject areas are added on a regular basis. File 2011 tax return  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. File 2011 tax return gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. File 2011 tax return You can use the IRS Tax Map, to search publications and instructions by topic or keyword. File 2011 tax return The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. File 2011 tax return When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. File 2011 tax return Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. File 2011 tax return You can also ask the IRS to mail a return or an account transcript to you. File 2011 tax return Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. File 2011 tax return gov or by calling 1-800-908-9946. File 2011 tax return Tax return and tax account transcripts are generally available for the current year and the past three years. File 2011 tax return Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. File 2011 tax return Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. File 2011 tax return If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. File 2011 tax return Check the status of your amended return using Where's My Amended Return? Go to IRS. File 2011 tax return gov and enter Where's My Amended Return? in the search box. File 2011 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. File 2011 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. File 2011 tax return Make a payment using one of several safe and convenient electronic payment options available on IRS. File 2011 tax return gov. File 2011 tax return Select the Payment tab on the front page of IRS. File 2011 tax return gov for more information. File 2011 tax return Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. File 2011 tax return Figure your income tax withholding with the IRS Withholding Calculator on IRS. File 2011 tax return gov. File 2011 tax return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. File 2011 tax return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. File 2011 tax return gov. File 2011 tax return Request an Electronic Filing PIN by going to IRS. File 2011 tax return gov and entering Electronic Filing PIN in the search box. File 2011 tax return Download forms, instructions and publications, including accessible versions for people with disabilities. File 2011 tax return Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. File 2011 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. File 2011 tax return An employee can answer questions about your tax account or help you set up a payment plan. File 2011 tax return Before you visit, check the Office Locator on IRS. File 2011 tax return gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. File 2011 tax return If you have a special need, such as a disability, you can request an appointment. File 2011 tax return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. File 2011 tax return Apply for an Employer Identification Number (EIN). File 2011 tax return Go to IRS. File 2011 tax return gov and enter Apply for an EIN in the search box. File 2011 tax return Read the Internal Revenue Code, regulations, or other official guidance. File 2011 tax return Read Internal Revenue Bulletins. File 2011 tax return Sign up to receive local and national tax news and more by email. File 2011 tax return Just click on “subscriptions” above the search box on IRS. File 2011 tax return gov and choose from a variety of options. File 2011 tax return    Phone. File 2011 tax return You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. File 2011 tax return Download the free IRS2Go app from the iTunes app store or from Google Play. File 2011 tax return Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. File 2011 tax return gov, or download the IRS2Go app. File 2011 tax return Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. File 2011 tax return The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. File 2011 tax return Most VITA and TCE sites offer free electronic filing. File 2011 tax return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. File 2011 tax return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. File 2011 tax return Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. File 2011 tax return If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. File 2011 tax return The IRS issues more than 9 out of 10 refunds in less than 21 days. File 2011 tax return Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. File 2011 tax return Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. File 2011 tax return The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. File 2011 tax return Note, the above information is for our automated hotline. File 2011 tax return Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. File 2011 tax return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. File 2011 tax return You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. File 2011 tax return It can take up to 3 weeks from the date you mailed it to show up in our system. File 2011 tax return Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). File 2011 tax return You should receive your order within 10 business days. File 2011 tax return Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. File 2011 tax return If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. File 2011 tax return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. File 2011 tax return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. File 2011 tax return These individuals can also contact the IRS through relay services such as the Federal Relay Service. File 2011 tax return    Walk-in. File 2011 tax return You can find a selection of forms, publications and services — in-person. File 2011 tax return Products. File 2011 tax return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. File 2011 tax return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. File 2011 tax return Services. File 2011 tax return You can walk in to your local TAC for face-to-face tax help. File 2011 tax return An employee can answer questions about your tax account or help you set up a payment plan. File 2011 tax return Before visiting, use the Office Locator tool on IRS. File 2011 tax return gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. File 2011 tax return    Mail. File 2011 tax return You can send your order for forms, instructions, and publications to the address below. File 2011 tax return You should receive a response within 10 business days after your request is received. File 2011 tax return Internal Revenue Service 1201 N. File 2011 tax return Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. File 2011 tax return The Taxpayer Advocate Service (TAS) is your voice at the IRS. File 2011 tax return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. File 2011 tax return   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. File 2011 tax return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. File 2011 tax return You face (or your business is facing) an immediate threat of adverse action. File 2011 tax return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. File 2011 tax return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. File 2011 tax return Here's why we can help: TAS is an independent organization within the IRS. File 2011 tax return Our advocates know how to work with the IRS. File 2011 tax return Our services are free and tailored to meet your needs. File 2011 tax return We have offices in every state, the District of Columbia, and Puerto Rico. File 2011 tax return   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. File 2011 tax return   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. File 2011 tax return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. File 2011 tax return Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. File 2011 tax return Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. File 2011 tax return Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. File 2011 tax return Prev  Up  Next   Home   More Online Publications
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The File 2011 Tax Return

File 2011 tax return Publication 542 - Main Content Table of Contents Businesses Taxed as CorporationsPersonal services. File 2011 tax return Employee-owners. File 2011 tax return Other rules. File 2011 tax return Other rules. File 2011 tax return Property Exchanged for StockNonqualified preferred stock. File 2011 tax return Liabilities. File 2011 tax return Election to reduce basis. File 2011 tax return Capital Contributions Filing and Paying Income TaxesIncome Tax Return Penalties Estimated Tax U. File 2011 tax return S. File 2011 tax return Real Property Interest Accounting MethodsSection 481(a) adjustment. File 2011 tax return Accounting Periods Recordkeeping Income, Deductions, and Special ProvisionsCosts of Going Into Business Related Persons Income From Qualifying Shipping Activities Election to Expense Qualified Refinery Property Deduction to Comply With EPA Sulfur Regulations Energy-Efficient Commercial Building Property Deduction Corporate Preference Items Dividends-Received Deduction Extraordinary Dividends Below-Market Loans Charitable Contributions Capital Losses Net Operating Losses At-Risk Limits Passive Activity Limits Figuring TaxTax Rate Schedule Alternative Minimum Tax (AMT) Credits Recapture Taxes Accumulated Earnings Tax Distributions to ShareholdersMoney or Property Distributions Distributions of Stock or Stock Rights Constructive Distributions Reporting Dividends and Other Distributions How To Get Tax Help Businesses Taxed as Corporations The rules you must use to determine whether a business is taxed as a corporation changed for businesses formed after 1996. File 2011 tax return Business formed before 1997. File 2011 tax return   A business formed before 1997 and taxed as a corporation under the old rules will generally continue to be taxed as a corporation. File 2011 tax return Business formed after 1996. File 2011 tax return   The following businesses formed after 1996 are taxed as corporations. File 2011 tax return A business formed under a federal or state law that refers to it as a corporation, body corporate, or body politic. File 2011 tax return A business formed under a state law that refers to it as a joint-stock company or joint-stock association. File 2011 tax return An insurance company. File 2011 tax return Certain banks. File 2011 tax return A business wholly owned by a state or local government. File 2011 tax return A business specifically required to be taxed as a corporation by the Internal Revenue Code (for example, certain publicly traded partnerships). File 2011 tax return Certain foreign businesses. File 2011 tax return Any other business that elects to be taxed as a corporation. File 2011 tax return For example, a limited liability company (LLC) can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election. File 2011 tax return For more information about LLCs, see Publication 3402, Taxation of Limited Liability Companies. File 2011 tax return S corporations. File 2011 tax return   Some corporations may meet the qualifications for electing to be S corporations. File 2011 tax return For information on S corporations, see the instructions for Form 1120S, U. File 2011 tax return S. File 2011 tax return Income Tax Return for an S Corporation. File 2011 tax return Personal service corporations. File 2011 tax return   A corporation is a personal service corporation if it meets all of the following requirements. File 2011 tax return Its principal activity during the “testing period” is performing personal services (defined later). File 2011 tax return Generally, the testing period for any tax year is the prior tax year. File 2011 tax return If the corporation has just been formed, the testing period begins on the first day of its tax year and ends on the earlier of: The last day of its tax year, or The last day of the calendar year in which its tax year begins. File 2011 tax return Its employee-owners substantially perform the services in (1), above. File 2011 tax return This requirement is met if more than 20% of the corporation's compensation cost for its activities of performing personal services during the testing period is for personal services performed by employee-owners. File 2011 tax return Its employee-owners own more than 10% of the fair market value of its outstanding stock on the last day of the testing period. File 2011 tax return Personal services. File 2011 tax return   Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health (including veterinary services), law, and the performing arts. File 2011 tax return Employee-owners. File 2011 tax return   A person is an employee-owner of a personal service corporation if both of the following apply. File 2011 tax return He or she is an employee of the corporation or performs personal services for, or on behalf of, the corporation (even if he or she is an independent contractor for other purposes) on any day of the testing period. File 2011 tax return He or she owns any stock in the corporation at any time during the testing period. File 2011 tax return Other rules. File 2011 tax return   For other rules that apply to personal service corporations see Accounting Periods, later. File 2011 tax return Closely held corporations. File 2011 tax return   A corporation is closely held if all of the following apply. File 2011 tax return It is not a personal service corporation. File 2011 tax return At any time during the last half of the tax year, more than 50% of the value of its outstanding stock is, directly or indirectly, owned by or for five or fewer individuals. File 2011 tax return “Individual” includes certain trusts and private foundations. File 2011 tax return Other rules. File 2011 tax return   For the at-risk rules that apply to closely held corporations, seeAt-Risk Limits, later. File 2011 tax return Property Exchanged for Stock If you transfer property (or money and property) to a corporation in exchange for stock in that corporation (other than nonqualified preferred stock, described later), and immediately afterward you are in control of the corporation, the exchange is usually not taxable. File 2011 tax return This rule applies both to individuals and to groups who transfer property to a corporation. File 2011 tax return It also applies whether the corporation is being formed or is already operating. File 2011 tax return It does not apply in the following situations. File 2011 tax return The corporation is an investment company. File 2011 tax return You transfer the property in a bankruptcy or similar proceeding in exchange for stock used to pay creditors. File 2011 tax return The stock is received in exchange for the corporation's debt (other than a security) or for interest on the corporation's debt (including a security) that accrued while you held the debt. File 2011 tax return Both the corporation and any person involved in a nontaxable exchange of property for stock must attach to their income tax returns a complete statement of all facts pertinent to the exchange. File 2011 tax return For more information, see section 1. File 2011 tax return 351-3 of the Regulations. File 2011 tax return Control of a corporation. File 2011 tax return   To be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock. File 2011 tax return Example 1. File 2011 tax return You and Bill Jones buy property for $100,000. File 2011 tax return You both organize a corporation when the property has a fair market value of $300,000. File 2011 tax return You transfer the property to the corporation for all its authorized capital stock, which has a par value of $300,000. File 2011 tax return No gain is recognized by you, Bill, or the corporation. File 2011 tax return Example 2. File 2011 tax return You and Bill transfer the property with a basis of $100,000 to a corporation in exchange for stock with a fair market value of $300,000. File 2011 tax return This represents only 75% of each class of stock of the corporation. File 2011 tax return The other 25% was already issued to someone else. File 2011 tax return You and Bill recognize a taxable gain of $200,000 on the transaction. File 2011 tax return Services rendered. File 2011 tax return   The term property does not include services rendered or to be rendered to the issuing corporation. File 2011 tax return The value of stock received for services is income to the recipient. File 2011 tax return Example. File 2011 tax return You transfer property worth $35,000 and render services valued at $3,000 to a corporation in exchange for stock valued at $38,000. File 2011 tax return Right after the exchange, you own 85% of the outstanding stock. File 2011 tax return No gain is recognized on the exchange of property. File 2011 tax return However, you recognize ordinary income of $3,000 as payment for services you rendered to the corporation. File 2011 tax return Property of relatively small value. File 2011 tax return   The term property does not include property of a relatively small value when it is compared to the value of stock and securities already owned or to be received for services by the transferor if the main purpose of the transfer is to qualify for the nonrecognition of gain or loss by other transferors. File 2011 tax return   Property transferred will not be considered to be of relatively small value if its fair market value is at least 10% of the fair market value of the stock and securities already owned or to be received for services by the transferor. File 2011 tax return Stock received in disproportion to property transferred. File 2011 tax return   If a group of transferors exchange property for corporate stock, each transferor does not have to receive stock in proportion to his or her interest in the property transferred. File 2011 tax return If a disproportionate transfer takes place, it will be treated for tax purposes in accordance with its true nature. File 2011 tax return It may be treated as if the stock were first received in proportion and then some of it used to make gifts, pay compensation for services, or satisfy the transferor's obligations. File 2011 tax return Money or other property received. File 2011 tax return   If, in an otherwise nontaxable exchange of property for corporate stock, you also receive money or property other than stock, you may have to recognize gain. File 2011 tax return You must recognize gain only up to the amount of money plus the fair market value of the other property you receive. File 2011 tax return The rules for figuring the recognized gain in this situation generally follow those for a partially nontaxable exchange discussed in Publication 544 under Like-Kind Exchanges. File 2011 tax return If the property you give up includes depreciable property, the recognized gain may have to be reported as ordinary income from depreciation. File 2011 tax return See chapter 3 of Publication 544. File 2011 tax return No loss is recognized. File 2011 tax return Nonqualified preferred stock. File 2011 tax return   Nonqualified preferred stock is treated as property other than stock. File 2011 tax return Generally, it is preferred stock with any of the following features. File 2011 tax return The holder has the right to require the issuer or a related person to redeem or buy the stock. File 2011 tax return The issuer or a related person is required to redeem or buy the stock. File 2011 tax return The issuer or a related person has the right to redeem or buy the stock and, on the issue date, it is more likely than not that the right will be exercised. File 2011 tax return The dividend rate on the stock varies with reference to interest rates, commodity prices, or similar indices. File 2011 tax return For a detailed definition of nonqualified preferred stock, see section 351(g)(2) of the Internal Revenue Code. File 2011 tax return Liabilities. File 2011 tax return   If the corporation assumes your liabilities, the exchange generally is not treated as if you received money or other property. File 2011 tax return There are two exceptions to this treatment. File 2011 tax return If the liabilities the corporation assumes are more than your adjusted basis in the property you transfer, gain is recognized up to the difference. File 2011 tax return However, if the liabilities assumed give rise to a deduction when paid, such as a trade account payable or interest, no gain is recognized. File 2011 tax return If there is no good business reason for the corporation to assume your liabilities, or if your main purpose in the exchange is to avoid federal income tax, the assumption is treated as if you received money in the amount of the liabilities. File 2011 tax return For more information on the assumption of liabilities, see section 357(d) of the Internal Revenue Code. File 2011 tax return Example. File 2011 tax return You transfer property to a corporation for stock. File 2011 tax return Immediately after the transfer, you control the corporation. File 2011 tax return You also receive $10,000 in the exchange. File 2011 tax return Your adjusted basis in the transferred property is $20,000. File 2011 tax return The stock you receive has a fair market value (FMV) of $16,000. File 2011 tax return The corporation also assumes a $5,000 mortgage on the property for which you are personally liable. File 2011 tax return Gain is realized as follows. File 2011 tax return FMV of stock received $16,000 Cash received 10,000 Liability assumed by corporation 5,000 Total received $31,000 Minus: Adjusted basis of property transferred 20,000 Realized gain $11,000   The liability assumed is not treated as money or other property. File 2011 tax return The recognized gain is limited to $10,000, the cash received. File 2011 tax return Loss on exchange. File 2011 tax return   If you have a loss from an exchange and own, directly or indirectly, more than 50% of the corporation's stock, you cannot deduct the loss. File 2011 tax return For more information, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. File 2011 tax return Basis of stock or other property received. File 2011 tax return   The basis of the stock you receive is generally the adjusted basis of the property you transfer. File 2011 tax return Increase this amount by any amount treated as a dividend, plus any gain recognized on the exchange. File 2011 tax return Decrease this amount by any cash you received, the fair market value of any other property you received, and any loss recognized on the exchange. File 2011 tax return Also decrease this amount by the amount of any liability the corporation or another party to the exchange assumed from you, unless payment of the liability gives rise to a deduction when paid. File 2011 tax return    Further decreases may be required when the corporation or another party to the exchange assumes from you a liability that gives rise to a deduction when paid, if the basis of the stock would otherwise be higher than its fair market value on the date of the exchange. File 2011 tax return This rule does not apply if the entity assuming the liability acquired either substantially all of the assets or the trade or business with which the liability is associated. File 2011 tax return The basis of any other property you receive is its fair market value on the date of the trade. File 2011 tax return Basis of property transferred. File 2011 tax return   A corporation that receives property from you in exchange for its stock generally has the same basis you had in the property, increased by any gain you recognized on the exchange. File 2011 tax return However, the increase for the gain recognized may be limited. File 2011 tax return For more information, see section 362 of the Internal Revenue Code. File 2011 tax return Election to reduce basis. File 2011 tax return   In a section 351 transaction, if the adjusted basis of the property transferred exceeds the property's fair market value, the transferor and transferee may make an irrevocable election to treat the basis of the stock received by the transferor as having a basis equal to the fair market value of the property transferred. File 2011 tax return The transferor and transferee make this election by attaching a statement to their tax returns filed by the due date (including extensions) for the tax year in which the transaction occurred. File 2011 tax return However, if the transferor makes the election by including the certification provided in Notice 2005-70, 2005-41, I. File 2011 tax return R. File 2011 tax return B. File 2011 tax return 694, on or with its tax return filed by the due date (including extensions), then no election need be made by the transferee. File 2011 tax return    For more information on making this election, see section 362(e)(2)(C) of the Internal Revenue Code, and Notice 2005-70. File 2011 tax return Capital Contributions This section explains the tax treatment of contributions from shareholders and nonshareholders. File 2011 tax return Paid-in capital. File 2011 tax return   Contributions to the capital of a corporation, whether or not by shareholders, are paid-in capital. File 2011 tax return These contributions are not taxable to the corporation. File 2011 tax return Basis. File 2011 tax return   The corporation's basis of property contributed to capital by a shareholder is the same as the basis the shareholder had in the property, increased by any gain the shareholder recognized on the exchange. File 2011 tax return However, the increase for the gain recognized may be limited. File 2011 tax return For more information, see Basis of property transferred, above, and section 362 of the Internal Revenue Code. File 2011 tax return   The basis of property contributed to capital by a person other than a shareholder is zero. File 2011 tax return   If a corporation receives a cash contribution from a person other than a shareholder, the corporation must reduce the basis of any property acquired with the contribution during the 12-month period beginning on the day it received the contribution by the amount of the contribution. File 2011 tax return If the amount contributed is more than the cost of the property acquired, then reduce, but not below zero, the basis of the other properties held by the corporation on the last day of the 12-month period in the following order. File 2011 tax return Depreciable property. File 2011 tax return Amortizable property. File 2011 tax return Property subject to cost depletion but not to percentage depletion. File 2011 tax return All other remaining properties. File 2011 tax return   Reduce the basis of property in each category to zero before going on to the next category. File 2011 tax return   There may be more than one piece of property in each category. File 2011 tax return Base the reduction of the basis of each property on the following ratio:   Basis of each piece of property   Bases of all properties (within that category) If the corporation wishes to make this adjustment in some other way, it must get IRS approval. File 2011 tax return The corporation files a request for approval with its income tax return for the tax year in which it receives the contribution. File 2011 tax return Filing and Paying Income Taxes The federal income tax is a pay-as-you-go tax. File 2011 tax return A corporation generally must make estimated tax payments as it earns or receives income during its tax year. File 2011 tax return After the end of the year, the corporation must file an income tax return. File 2011 tax return This section will help you determine when and how to pay and file corporate income taxes. File 2011 tax return For certain corporations affected by Presidentially declared disasters such as hurricanes, the due dates for filing returns, paying taxes, and performing other time-sensitive acts may be extended. File 2011 tax return The IRS may also forgive the interest and penalties on any underpaid tax for the length of any extension. File 2011 tax return For more information, visit www. File 2011 tax return irs. File 2011 tax return gov/newsroom/article/0,,id=108362. File 2011 tax return 00. File 2011 tax return Income Tax Return This section will help you determine when and how to report a corporation's income tax. File 2011 tax return Who must file. File 2011 tax return   Unless exempt under section 501 of the Internal Revenue Code, all domestic corporations in existence for any part of a tax year (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. File 2011 tax return Which form to file. File 2011 tax return   A corporation generally must file Form 1120, U. File 2011 tax return S. File 2011 tax return Corporation Income Tax Return, to report its income, gains, losses, deductions, credits, and to figure its income tax liability. File 2011 tax return Certain organizations and entities must file special returns. File 2011 tax return For more information, see Special Returns for Certain Organizations, in the Instructions for Form 1120. File 2011 tax return Electronic filing. File 2011 tax return   Corporations can generally electronically file (e-file) Form 1120 and certain related forms, schedules, and attachments. File 2011 tax return Certain corporations with total assets of $10 million or more, that file at least 250 returns a year must e-file Form 1120. File 2011 tax return However, in certain instances, these corporations can request a waiver. File 2011 tax return For more information regarding electronic filing, visit www. File 2011 tax return irs. File 2011 tax return gov/efile. File 2011 tax return When to file. File 2011 tax return   Generally, a corporation must file its income tax return by the 15th day of the 3rd month after the end of its tax year. File 2011 tax return A new corporation filing a short-period return must generally file by the 15th day of the 3rd month after the short period ends. File 2011 tax return A corporation that has dissolved must generally file by the 15th day of the 3rd month after the date it dissolved. File 2011 tax return Example 1. File 2011 tax return A corporation's tax year ends December 31. File 2011 tax return It must file its income tax return by March 15th. File 2011 tax return Example 2. File 2011 tax return A corporation's tax year ends June 30. File 2011 tax return It must file its income tax return by September 15th. File 2011 tax return   If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day. File 2011 tax return Extension of time to file. File 2011 tax return   File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns, to request an extension of time to file a corporation income tax return. File 2011 tax return The IRS will grant the extension if you complete the form properly, file it, and pay any tax due by the original due date for the return. File 2011 tax return   Form 7004 does not extend the time for paying the tax due on the return. File 2011 tax return Interest, and possibly penalties, will be charged on any part of the final tax due not shown as a balance due on Form 7004. File 2011 tax return The interest is figured from the original due date of the return to the date of payment. File 2011 tax return   For more information, see the instructions for Form 7004. File 2011 tax return How to pay your taxes. File 2011 tax return   A corporation must pay its tax due in full no later than the 15th day of the 3rd month after the end of its tax year. File 2011 tax return Electronic Federal Tax Payment System (EFTPS). File 2011 tax return   Corporations generally must use EFTPS to make deposits of all tax liabilities (including social security, Medicare, withheld income, excise, and corporate income taxes). File 2011 tax return For more information on EFTPS and enrollment, visit www. File 2011 tax return eftps. File 2011 tax return gov or call 1-800-555-4477. File 2011 tax return Also see Publication 966, The Secure Way to Pay Your Federal Taxes. File 2011 tax return Note. File 2011 tax return Forms 8109 and 8109-B, Federal Tax Deposit Coupon, can no longer be used to make federal tax deposits. File 2011 tax return Penalties Generally, if the corporation receives a notice about interest and penalties after it files its return, send the IRS an explanation and we will determine if the corporation meets reasonable-cause criteria. File 2011 tax return Do not attach an explanation when the corporation's return is filed. File 2011 tax return See the instructions for your income tax return. File 2011 tax return Late filing of return. File 2011 tax return    A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. File 2011 tax return If the corporation is charged a penalty for late payment of tax (discussed next) for the same period of time, the penalty for late filing is reduced by the amount of the penalty for late payment. File 2011 tax return The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $100. File 2011 tax return The penalty will not be imposed if the corporation can show the failure to file on time was due to a reasonable cause. File 2011 tax return Late payment of tax. File 2011 tax return    A corporation that does not pay the tax when due may be penalized ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. File 2011 tax return The penalty will not be imposed if the corporation can show that the failure to pay on time was due to a reasonable cause. File 2011 tax return Trust fund recovery penalty. File 2011 tax return   If income, social security, and Medicare taxes that a corporation must withhold from employee wages are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. File 2011 tax return The penalty is the full amount of the unpaid trust fund tax. File 2011 tax return This penalty may apply to you if these unpaid taxes cannot be immediately collected from the business. File 2011 tax return   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying these taxes, and who acted willfully in not doing so. File 2011 tax return   A responsible person can be an officer or employee of a corporation, an accountant, or a volunteer director/trustee. File 2011 tax return A responsible person also may include one who signs checks for the corporation or otherwise has authority to cause the spending of business funds. File 2011 tax return   Willfully means voluntarily, consciously, and intentionally. File 2011 tax return A responsible person acts willfully if the person knows the required actions are not taking place. File 2011 tax return   For more information on withholding and paying these taxes, see Publication 15 (Circular E), Employer's Tax Guide, and Publication 51, (Circular A), Agricultural Employer's Tax Guide. File 2011 tax return Other penalties. File 2011 tax return   Other penalties can be imposed for negligence, substantial understatement of tax, reportable transaction understatements, and fraud. File 2011 tax return See sections 6662, 6662A, and 6663 of the Internal Revenue Code. File 2011 tax return Estimated Tax Generally, a corporation must make installment payments if it expects its estimated tax for the year to be $500 or more. File 2011 tax return If the corporation does not pay the installments when they are due, it could be subject to an underpayment penalty. File 2011 tax return This section will explain how to avoid this penalty. File 2011 tax return When to pay estimated tax. File 2011 tax return   Installment payments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year. File 2011 tax return Example 1. File 2011 tax return Your corporation's tax year ends December 31. File 2011 tax return Installment payments are due on April 15, June 15, September 15, and December 15. File 2011 tax return Example 2. File 2011 tax return Your corporation's tax year ends June 30. File 2011 tax return Installment payments are due on October 15, December 15, March 15, and June 15. File 2011 tax return   If any due date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next business day. File 2011 tax return How to figure each required installment. File 2011 tax return   Use Form 1120-W, Estimated Tax for Corporations, as a worksheet to figure each required installment of estimated tax. File 2011 tax return You will generally use one of the following two methods to figure each required installment. File 2011 tax return You should use the method that yields the smallest installment payments. File 2011 tax return Note. File 2011 tax return In these discussions, “return” generally refers to the corporation's original return. File 2011 tax return However, an amended return is considered the original return if it is filed by the due date (including extensions) of the original return. File 2011 tax return Method 1. File 2011 tax return   Each required installment is 25% of the income tax the corporation will show on its return for the current year. File 2011 tax return Method 2. File 2011 tax return   Each required installment is 25% of the income tax shown on the corporation's return for the previous year. File 2011 tax return   To use Method 2: The corporation must have filed a return for the previous year, The return must have been for a full 12 months, and The return must have shown a positive tax liability (not zero). File 2011 tax return Also, if the corporation is a large corporation, it can use Method 2 to figure the first installment only. File 2011 tax return   See the Instructions for Form 1120-W, for the definition of a large corporation and other special rules for large corporations. File 2011 tax return Other methods. File 2011 tax return   If a corporation's income is expected to vary during the year because, for example, its business is seasonal, it may be able to lower the amount of one or more required installments by using one or both of the following methods. File 2011 tax return The annualized income installment method. File 2011 tax return The adjusted seasonal installment method. File 2011 tax return Use Schedule A of Form 1120-W to determine if using one or both of these methods will lower the amount of any required installments. File 2011 tax return Refiguring required installments. File 2011 tax return   If after the corporation figures and deposits its estimated tax it finds that its tax liability for the year will be more or less than originally estimated, it may have to refigure its required installments to see if an underpayment penalty may apply. File 2011 tax return An immediate catchup payment should be made to reduce any penalty resulting from the underpayment of any earlier installments. File 2011 tax return Underpayment penalty. File 2011 tax return   If the corporation does not pay a required installment of estimated tax by its due date, it may be subject to a penalty. File 2011 tax return The penalty is figured separately for each installment due date. File 2011 tax return The corporation may owe a penalty for an earlier due date, even if it paid enough tax later to make up the underpayment. File 2011 tax return This is true even if the corporation is due a refund when its return is filed. File 2011 tax return Form 2220. File 2011 tax return   Use Form 2220, Underpayment of Estimated Tax by Corporations, to determine if a corporation is subject to the penalty for underpayment of estimated tax and to figure the amount of the penalty. File 2011 tax return   If the corporation is charged a penalty, the amount of the penalty depends on the following three factors. File 2011 tax return The amount of the underpayment. File 2011 tax return The period during which the underpayment was due and unpaid. File 2011 tax return The interest rate for underpayments published quarterly by the IRS in the Internal Revenue Bulletin. File 2011 tax return   A corporation generally does not have to file Form 2220 with its income tax return because the IRS will figure any penalty and bill the corporation. File 2011 tax return However, even if the corporation does not owe a penalty, complete and attach the form to the corporation's tax return if any of the following apply. File 2011 tax return The annualized income installment method was used to figure any required installment. File 2011 tax return The adjusted seasonal installment method was used to figure any required installment. File 2011 tax return The corporation is a large corporation figuring its first required installment based on the prior year's tax. File 2011 tax return How to pay estimated tax. File 2011 tax return   A corporation is generally required to use EFTPS to pay its taxes. File 2011 tax return See Electronic Federal Tax Payment System (EFTPS), earlier. File 2011 tax return Also see the Instructions for Form 1120-W. File 2011 tax return Quick refund of overpayments. File 2011 tax return   A corporation that has overpaid its estimated tax for the tax year may be able to apply for a quick refund. File 2011 tax return Use Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, to apply for a quick refund of an overpayment of estimated tax. File 2011 tax return A corporation can apply for a quick refund if the overpayment is: At least 10% of its expected tax liability, and At least $500. File 2011 tax return Use Form 4466 to figure the corporation's expected tax liability and the overpayment of estimated tax. File 2011 tax return File Form 4466 before the 16th day of the 3rd month after the end of the tax year, but before the corporation files its income tax return. File 2011 tax return Do not file Form 4466 before the end of the corporation's tax year. File 2011 tax return An extension of time to file the corporation's income tax return will not extend the time for filing Form 4466. File 2011 tax return The IRS will act on the form within 45 days from the date you file it. File 2011 tax return U. File 2011 tax return S. File 2011 tax return Real Property Interest If a domestic corporation acquires a U. File 2011 tax return S. File 2011 tax return real property interest from a foreign person or firm, the corporation may have to withhold tax on the amount it pays for the property. File 2011 tax return The amount paid includes cash, the fair market value of other property, and any assumed liability. File 2011 tax return If a domestic corporation distributes a U. File 2011 tax return S. File 2011 tax return real property interest to a foreign person or firm, it may have to withhold tax on the fair market value of the property. File 2011 tax return A corporation that fails to withhold may be liable for the tax, and any penalties and interest that apply. File 2011 tax return For more information, see section 1445 of the Internal Revenue Code; Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities; Form 8288, U. File 2011 tax return S. File 2011 tax return Withholding Tax Return for Dispositions by Foreign Persons of U. File 2011 tax return S. File 2011 tax return Real Property Interests; and Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. File 2011 tax return S. File 2011 tax return Real Property Interests. File 2011 tax return Accounting Methods An accounting method is a set of rules used to determine when and how income and expenses are reported. File 2011 tax return Taxable income should be determined using the method of accounting regularly used in keeping the corporation's books and records. File 2011 tax return In all cases, the method used must clearly show taxable income. File 2011 tax return Generally, permissible methods include: Cash, Accrual, or Any other method authorized by the Internal Revenue Code. File 2011 tax return Accrual method. File 2011 tax return   Generally, a corporation (other than a qualified personal service corporation) must use the accrual method of accounting if its average annual gross receipts exceed $5 million. File 2011 tax return A corporation engaged in farming operations also must use the accrual method. File 2011 tax return   If inventories are required, the accrual method generally must be used for sales and purchases of merchandise. File 2011 tax return However, qualifying taxpayers and eligible businesses of qualifying small business taxpayers are excepted from using the accrual method for eligible trades or businesses and may account for inventoriable items as materials and supplies that are not incidental. File 2011 tax return   Under the accrual method, an amount is includable in income when: All the events have occurred that fix the right to receive the income, which is the earliest of the date: The required performance takes place, Payment is due, or Payment is received; and The amount can be determined with reasonable accuracy. File 2011 tax return   Generally, an accrual basis taxpayer can deduct accrued expenses in the tax year when: All events that determine the liability have occurred, The amount of the liability can be figured with reasonable accuracy, and Economic performance takes place with respect to the expense. File 2011 tax return   There are exceptions to the economic performance rule for certain items, including recurring expenses. File 2011 tax return See section 461(h) of the Internal Revenue Code and the related regulations for the rules for determining when economic performance takes place. File 2011 tax return Nonaccrual experience method. File 2011 tax return   Accrual method corporations are not required to maintain accruals for certain amounts from the performance of services that, on the basis of their experience, will not be collected, if: The services are in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting; or The corporation's average annual gross receipts for the 3 prior tax years does not exceed $5 million. File 2011 tax return   This provision does not apply if interest is required to be paid on the amount or if there is any penalty for failure to pay the amount timely. File 2011 tax return Percentage of completion method. File 2011 tax return   Long-term contracts (except for certain real property construction contracts) must generally be accounted for using the percentage of completion method described in section 460 of the Internal Revenue Code. File 2011 tax return Mark-to-market accounting method. File 2011 tax return   Generally, dealers in securities must use the mark-to-market accounting method described in section 475 of the Internal Revenue Code. File 2011 tax return Under this method any security held by a dealer as inventory must be included in inventory at its FMV. File 2011 tax return Any security not held as inventory at the close of the tax year is treated as sold at its FMV on the last business day of the tax year. File 2011 tax return Any gain or loss must be taken into account in determining gross income. File 2011 tax return The gain or loss taken into account is treated as ordinary gain or loss. File 2011 tax return   Dealers in commodities and traders in securities and commodities can elect to use the mark-to-market accounting method. File 2011 tax return Change in accounting method. File 2011 tax return   A corporation can change its method of accounting used to report taxable income (for income as a whole or for the treatment of any material item). File 2011 tax return The corporation must file Form 3115, Application for Change in Accounting Method. File 2011 tax return For more information, see Form 3115 and Publication 538. File 2011 tax return Section 481(a) adjustment. File 2011 tax return   The corporation may have to make an adjustment under section 481(a) of the Internal Revenue Code to prevent amounts of income or expense from being duplicated or omitted. File 2011 tax return The section 481(a) adjustment period is generally 1 year for a net negative adjustment and 4 years for a net positive adjustment. File 2011 tax return However, a corporation can elect to use a 1-year adjustment period if the net section 481(a) adjustment for the change is less than $25,000. File 2011 tax return The corporation must complete the appropriate lines of Form 3115 to make the election. File 2011 tax return See the Instructions for Form 3115. File 2011 tax return Accounting Periods A corporation must figure its taxable income on the basis of a tax year. File 2011 tax return A tax year is the annual accounting period a corporation uses to keep its records and report its income and expenses. File 2011 tax return Generally, corporations can use either a calendar year or a fiscal year as its tax year. File 2011 tax return Unless special rules apply, a corporation generally adopts a tax year by filing its first federal income tax return using that tax year. File 2011 tax return For more information, see Publication 538. File 2011 tax return Personal service corporation. File 2011 tax return   A personal service corporation must use a calendar year as its tax year unless: It elects to use a 52–53 week tax year that ends with reference to the calendar year; It can establish a business purpose for a different tax year and obtains approval of the IRS. File 2011 tax return See Form 1128, Application To Adopt, Change, or Retain a Tax Year, and Publication 538; or It elects under section 444 of the Internal Revenue Code to have a tax year other than a calendar year. File 2011 tax return Use Form 8716, Election to Have a Tax Year Other Than a Required Tax Year, to make the election. File 2011 tax return   If a personal service corporation makes a section 444 election, its deduction for certain amounts paid to employee-owners may be limited. File 2011 tax return See Schedule H (Form 1120), Section 280H Limitations for a Personal Service Corporation (PSC), to figure the maximum deduction. File 2011 tax return Change of tax year. File 2011 tax return   Generally, a corporation must get the consent of the IRS before changing its tax year by filing Form 1128. File 2011 tax return However, under certain conditions, a corporation can change its tax year without getting the consent. File 2011 tax return For more information, see Form 1128 and Publication 538. File 2011 tax return Recordkeeping A corporation should keep its records for as long as they may be needed for the administration of any provision of the Internal Revenue Code. File 2011 tax return Usually records that support items of income, deductions, or credits on the return must be kept for 3 years from the date the return is due or filed, whichever is later. File 2011 tax return Keep records that verify the corporation's basis in property for as long as they are needed to figure the basis of the original or replacement property. File 2011 tax return The corporation should keep copies of all filed returns. File 2011 tax return They help in preparing future and amended returns and in the calculation of earnings and profits. File 2011 tax return Income, Deductions, and Special Provisions Rules on income and deductions that apply to individuals also apply, for the most part, to corporations. File 2011 tax return However, the following special provisions apply only to corporations. File 2011 tax return Costs of Going Into Business When you go into business, treat all costs you incur to get your business started as capital expenses. File 2011 tax return However, a corporation can elect to deduct a limited amount of start-up or organizational costs. File 2011 tax return Any costs not deducted can be amortized. File 2011 tax return Start-up costs are costs for creating an active trade or business or investigating the creation or acquisition of an active trade or business. File 2011 tax return Organizational costs are the direct costs of creating the corporation. File 2011 tax return For more information on deducting or amortizing start-up and organizational costs, see the instructions for your income tax return. File 2011 tax return Also see, Publication 535, chapter 7, Costs You Can Deduct or Capitalize, and chapter 8, Amortization. File 2011 tax return Related Persons A corporation that uses an accrual method of accounting cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until the corporation makes the payment and the corresponding amount is includible in the related person's gross income. File 2011 tax return Determine the relationship, for this rule, as of the end of the tax year for which the expense or interest would otherwise be deductible. File 2011 tax return If a deduction is denied, the rule will continue to apply even if the corporation's relationship with the person ends before the expense or interest is includible in the gross income of that person. File 2011 tax return These rules also deny the deduction of losses on the sale or exchange of property between related persons. File 2011 tax return Related persons. File 2011 tax return   For purposes of this rule, the following persons are related to a corporation. File 2011 tax return Another corporation, that is a member of the same controlled group (as defined in section 267(f) of the Internal Revenue Code). File 2011 tax return An individual who owns, directly or indirectly, more than 50% of the value of the outstanding stock of the corporation. File 2011 tax return A trust fiduciary, when the trust or the grantor of the trust owns, directly or indirectly, more than 50% in value of the outstanding stock of the corporation. File 2011 tax return An S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. File 2011 tax return A partnership, if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital or profits interest in the partnership. File 2011 tax return Any employee-owner, if the corporation is a personal service corporation (see Personal service corporation, earlier), regardless of the amount of stock owned by the employee-owner. File 2011 tax return Ownership of stock. File 2011 tax return   To determine whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following apply. File 2011 tax return Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, is treated as being owned proportionately by or for its shareholders, partners, or beneficiaries. File 2011 tax return An individual is treated as owning the stock owned, directly or indirectly, by or for the individual's family. File 2011 tax return Family includes only brothers and sisters (including half brothers and half sisters), a spouse, ancestors, and lineal descendants. File 2011 tax return Any individual owning (other than by applying (2), above) stock in a corporation, is treated as also owning the stock owned directly or indirectly by that individual's partner. File 2011 tax return To apply (1), (2), or (3), above, stock constructively owned by a person under (1) is treated as actually owned by that person. File 2011 tax return But stock constructively owned by an individual under (2) or (3) is not treated as actually owned by the individual for applying either (2) or (3) to make another person the constructive owner of that stock. File 2011 tax return Reallocation of income and deductions. File 2011 tax return   Where it is necessary to clearly show income or prevent tax evasion, the IRS can reallocate gross income, deductions, credits, or allowances between two or more organizations, trades, or businesses owned or controlled directly, or indirectly, by the same interests. File 2011 tax return Complete liquidations. File 2011 tax return   The disallowance of losses from the sale or exchange of property between related persons does not apply to liquidating distributions. File 2011 tax return More information. File 2011 tax return   For more information about the related person rules, see Publication 544. File 2011 tax return Income From Qualifying Shipping Activities A corporation may make an election to be taxed on its notional shipping income at the highest corporate tax rate. File 2011 tax return If a corporation makes this election it may exclude income from qualifying shipping activities from gross income. File 2011 tax return Also if the election is made, the corporation generally may not claim any loss, deduction, or credit with respect to qualifying shipping activities. File 2011 tax return A corporation making this election may also elect to defer gain on the disposition of a qualifying vessel. File 2011 tax return A corporation uses Form 8902, Alternative Tax on Qualifying Shipping Activities, to make the election and figure the alternative tax. File 2011 tax return For more information regarding the election, see Form 8902. File 2011 tax return Election to Expense Qualified Refinery Property A corporation can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct 50% of the cost of qualified refinery property (defined in section 179C(c) of the Internal Revenue Code), placed in service before January 1, 2014. File 2011 tax return The deduction is allowed for the year in which the property is placed in service. File 2011 tax return A subchapter T cooperative can make an irrevocable election on its return by the due date (including extensions) to allocate this deduction to its owners based on their ownership interest. File 2011 tax return For more information, see section 179C of the Internal Revenue Code and the related Regulations. File 2011 tax return Deduction to Comply With EPA Sulfur Regulations A small business refiner can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct up to 75% of qualified costs paid or incurred to comply with the Highway Diesel Fuel Sulfur Control Requirements of the Environmental Protection Agency (EPA). File 2011 tax return A subchapter T cooperative can make an irrevocable election on its return filed by the due date (including extensions) to allocate the deduction to its owners based on their ownership interest. File 2011 tax return For more information, see sections 45H and 179B of the Internal Revenue Code and the related Regulations. File 2011 tax return Energy-Efficient Commercial Building Property Deduction A corporation can claim a deduction for costs associated with energy-efficient commercial building property, placed in service before January 1, 2014. File 2011 tax return In order to qualify for the deduction: The costs must be associated with depreciable or amortizable property in a Standard 90. File 2011 tax return 1-2001 domestic building; The property must be either a part of the interior lighting system, the heating, cooling, ventilation and hot water system, or the building envelope (defined in section 179D(c)(1)(C) of the Internal Revenue Code); and The property must be installed as part of a plan to reduce the total annual energy and power costs of the building by 50% or more. File 2011 tax return The deduction is limited to $1. File 2011 tax return 80 per square foot of the building less the total amount of deductions taken for this property in prior tax years. File 2011 tax return Other rules and limitations apply. File 2011 tax return The corporation must reduce the basis of any property by any deduction taken. File 2011 tax return The deduction is subject to recapture if the corporation fails to fully implement an energy savings plan. File 2011 tax return For more information, see section 179D of the Internal Revenue Code. File 2011 tax return Also see Notice 2006-52, 2006-26 I. File 2011 tax return R. File 2011 tax return B. File 2011 tax return 1175, clarified and amplified by Notice 2008-40, 2008-14 I. File 2011 tax return R. File 2011 tax return B. File 2011 tax return 725, and any successor. File 2011 tax return Corporate Preference Items A corporation must make special adjustments to certain items before it takes them into account in determining its taxable income. File 2011 tax return These items are known as corporate preference items and they include the following. File 2011 tax return Gain on the disposition of section 1250 property. File 2011 tax return For more information, see section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. File 2011 tax return Percentage depletion for iron ore and coal (including lignite). File 2011 tax return For more information, see Mines and Geothermal Deposits under Mineral Property in chapter 9 of Publication 535. File 2011 tax return Amortization of pollution control facilities. File 2011 tax return For more information, see Pollution Control Facilities in chapter 8 of Publication 535 and section 291(a)(5) of the Internal Revenue Code. File 2011 tax return Mineral exploration and development costs. File 2011 tax return For more information, see Exploration Costs and Development Costs in chapter 7 of Publication 535. File 2011 tax return For more information on corporate preference items, see section 291 of the Internal Revenue Code. File 2011 tax return Dividends-Received Deduction A corporation can deduct a percentage of certain dividends received during its tax year. File 2011 tax return This section discusses the general rules that apply. File 2011 tax return The deduction is figured on Form 1120, Schedule C, or the applicable schedule of your income tax return. File 2011 tax return For more information, see the Instructions for Form 1120, or the instructions for your applicable income tax return. File 2011 tax return Dividends from domestic corporations. File 2011 tax return   A corporation can deduct, within certain limits, 70% of the dividends received if the corporation receiving the dividend owns less than 20% of the corporation distributing the dividend. File 2011 tax return If the corporation owns 20% or more of the distributing corporation's stock, it can, subject to certain limits, deduct 80% of the dividends received. File 2011 tax return Ownership. File 2011 tax return   Determine ownership, for these rules, by the amount of voting power and value of the paying corporation's stock (other than certain preferred stock) the receiving corporation owns. File 2011 tax return Small business investment companies. File 2011 tax return   Small business investment companies can deduct 100% of the dividends received from taxable domestic corporations. File 2011 tax return Dividends from regulated investment companies. File 2011 tax return   Regulated investment company dividends received are subject to certain limits. File 2011 tax return Capital gain dividends received from a regulated investment company do not qualify for the deduction. File 2011 tax return For more information, see section 854 of the Internal Revenue Code. File 2011 tax return No deduction allowed for certain dividends. File 2011 tax return   Corporations cannot take a deduction for dividends received from the following entities. File 2011 tax return A real estate investment trust (REIT). File 2011 tax return A corporation exempt from tax under section 501 or 521 of the Internal Revenue Code either for the tax year of the distribution or the preceding tax year. File 2011 tax return A corporation whose stock was held less than 46 days during the 91-day period beginning 45 days before the stock became ex-dividend with respect to the dividend. File 2011 tax return Ex-dividend means the holder has no rights to the dividend. File 2011 tax return A corporation whose preferred stock was held less than 91 days during the 181-day period beginning 90 days before the stock became ex-dividend with respect to the dividend if the dividends received are for a period or periods totaling more than 366 days. File 2011 tax return Any corporation, if your corporation is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. File 2011 tax return Dividends on deposits. File 2011 tax return   Dividends on deposits or withdrawable accounts in domestic building and loan associations, mutual savings banks, cooperative banks, and similar organizations are interest, not dividends. File 2011 tax return They do not qualify for this deduction. File 2011 tax return Limit on deduction for dividends. File 2011 tax return   The total deduction for dividends received or accrued is generally limited (in the following order) to: 80% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from 20%-owned corporations, then 70% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from less-than-20%-owned corporations (reducing taxable income by the total dividends received from 20%-owned corporations). File 2011 tax return Figuring the limit. File 2011 tax return   In figuring the limit, determine taxable income without the following items. File 2011 tax return The net operating loss deduction. File 2011 tax return The domestic production activities deduction. File 2011 tax return The deduction for dividends received. File 2011 tax return Any adjustment due to the nontaxable part of an extraordinary dividend (see Extraordinary Dividends, below). File 2011 tax return Any capital loss carryback to the tax year. File 2011 tax return Effect of net operating loss. File 2011 tax return   If a corporation has a net operating loss (NOL) for a tax year, the limit of 80% (or 70%) of taxable income does not apply. File 2011 tax return To determine whether a corporation has an NOL, figure the dividends-received deduction without the 80% (or 70%) of taxable income limit. File 2011 tax return Example 1. File 2011 tax return A corporation loses $25,000 from operations. File 2011 tax return It receives $100,000 in dividends from a 20%-owned corporation. File 2011 tax return Its taxable income is $75,000 ($100,000 – $25,000) before the deduction for dividends received. File 2011 tax return If it claims the full dividends-received deduction of $80,000 ($100,000 × 80%) and combines it with an operations loss of $25,000, it will have an NOL of ($5,000). File 2011 tax return Therefore, the 80% of taxable income limit does not apply. File 2011 tax return The corporation can deduct the full $80,000. File 2011 tax return Example 2. File 2011 tax return Assume the same facts as in Example 1, except that the corporation only loses $15,000 from operations. File 2011 tax return Its taxable income is $85,000 before the deduction for dividends received. File 2011 tax return After claiming the dividends-received deduction of $80,000 ($100,000 × 80%), its taxable income is $5,000. File 2011 tax return Because the corporation will not have an NOL after applying a full dividends-received deduction, its allowable dividends-received deduction is limited to 80% of its taxable income, or $68,000 ($85,000 × 80%). File 2011 tax return Extraordinary Dividends If a corporation receives an extraordinary dividend on stock held 2 years or less before the dividend announcement date, it generally must reduce its basis in the stock by the nontaxed part of the dividend. File 2011 tax return The nontaxed part is any dividends-received deduction allowable for the dividends. File 2011 tax return Extraordinary dividend. File 2011 tax return   An extraordinary dividend is any dividend on stock that equals or exceeds a certain percentage of the corporation's adjusted basis in the stock. File 2011 tax return The percentages are: 5% for stock preferred as to dividends, or 10% for other stock. File 2011 tax return Treat all dividends received that have ex-dividend dates within an 85-consecutive-day period as one dividend. File 2011 tax return Treat all dividends received that have ex-dividend dates within a 365-consecutive-day period as extraordinary dividends if the total of the dividends exceeds 20% of the corporation's adjusted basis in the stock. File 2011 tax return Disqualified preferred stock. File 2011 tax return   Any dividend on disqualified preferred stock is treated as an extraordinary dividend regardless of the period of time the corporation held the stock. File 2011 tax return   Disqualified preferred stock is any stock preferred as to dividends if any of the following apply. File 2011 tax return The stock when issued has a dividend rate that declines (or can reasonably be expected to decline) in the future. File 2011 tax return The issue price of the stock exceeds its liquidation rights or stated redemption price. File 2011 tax return The stock is otherwise structured to avoid the rules for extraordinary dividends and to enable corporate shareholders to reduce tax through a combination of dividends-received deductions and loss on the disposition of the stock. File 2011 tax return   These rules apply to stock issued after July 10, 1989, unless it was issued under a written binding contract in effect on that date, and thereafter, before the issuance of the stock. File 2011 tax return More information. File 2011 tax return   For more information on extraordinary dividends, see section 1059 of the Internal Revenue Code. File 2011 tax return Below-Market Loans If a corporation receives a below-market loan and uses the proceeds for its trade or business, it may be able to deduct the forgone interest. File 2011 tax return A below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. File 2011 tax return A below-market loan generally is treated as an arm's-length transaction in which the borrower is considered as having received both the following: A loan in exchange for a note that requires payment of interest at the applicable federal rate, and An additional payment in an amount equal to the forgone interest. File 2011 tax return Treat the additional payment as a gift, dividend, contribution to capital, payment of compensation, or other payment, depending on the substance of the transaction. File 2011 tax return Foregone interest. File 2011 tax return   For any period, forgone interest is equal to: The interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. File 2011 tax return See Below-market loans, in chapter 4 of Publication 535 for more information. File 2011 tax return Charitable Contributions A corporation can claim a limited deduction for charitable contributions made in cash or other property. File 2011 tax return The contribution is deductible if made to, or for the use of, a qualified organization. File 2011 tax return For more information on qualified organizations, see Publication 526, Charitable Contributions. File 2011 tax return Also see, Exempt Organizations Select Check (EO Select Check) at www. File 2011 tax return irs. File 2011 tax return gov/charities, the on-line search tool for finding information on organizations eligible to receive tax-deductible contributions. File 2011 tax return Note. File 2011 tax return You cannot take a deduction if any of the net earnings of an organization receiving contributions benefit any private shareholder or individual. File 2011 tax return Cash method corporation. File 2011 tax return   A corporation using the cash method of accounting deducts contributions in the tax year paid. File 2011 tax return Accrual method corporation. File 2011 tax return   A corporation using an accrual method of accounting can choose to deduct unpaid contributions for the tax year the board of directors authorizes them if it pays them by the 15th day of the 3rd month after the close of that tax year. File 2011 tax return Make the choice by reporting the contribution on the corporation's return for the tax year. File 2011 tax return A declaration stating that the board of directors adopted the resolution during the tax year must accompany the return. File 2011 tax return The declaration must include the date the resolution was adopted. File 2011 tax return Limitations on deduction. File 2011 tax return   A corporation cannot deduct charitable contributions that exceed 10% of its taxable income for the tax year. File 2011 tax return Figure taxable income for this purpose without the following. File 2011 tax return The deduction for charitable contributions. File 2011 tax return The dividends-received deduction. File 2011 tax return The deduction allowed under section 249 of the Internal Revenue Code. File 2011 tax return The domestic production activities deduction. File 2011 tax return Any net operating loss carryback to the tax year. File 2011 tax return Any capital loss carryback to the tax year. File 2011 tax return Farmers and ranchers. File 2011 tax return    Corporations that are farmers and ranchers should see section 170(b)(2) of the Internal Revenue Code for special rules that may affect the deduction limit. File 2011 tax return Carryover of excess contributions. File 2011 tax return   You can carry over, within certain limits, to each of the subsequent 5 years any charitable contributions made during the current year that exceed the 10% limit. File 2011 tax return You lose any excess not used within that period. File 2011 tax return For example, if a corporation has a carryover of excess contributions paid in 2010 and it does not use all the excess on its return for 2011, it can carry any excess over to 2012, 2013, 2014, and 2015, if applicable. File 2011 tax return Any excess not used in 2015 is lost. File 2011 tax return Do not deduct a carryover of excess contributions in the carryover year until after you deduct contributions made in that year (subject to the 10% limit). File 2011 tax return You cannot deduct a carryover of excess contributions to the extent it increases a net operating loss carryover. File 2011 tax return Cash contributions. File 2011 tax return   A corporation must maintain a record of any contribution of cash, check, or other monetary contribution, regardless of the amount. File 2011 tax return The record can be a bank record, receipt, letter, or other written communication from the donee indicating the name of the organization, the date of the contribution, and the amount of the contribution. File 2011 tax return Keep the record of the contribution with the other corporate records. File 2011 tax return Do not attach the records to the corporation's return. File 2011 tax return For more information on cash contributions, see Publication 526. File 2011 tax return Gifts of $250 or more. File 2011 tax return   Generally, no deduction is allowed for any contribution of $250 or more unless the corporation gets a written acknowledgement from the donee organization. File 2011 tax return The acknowledgement should show the amount of cash contributed, a description of the property contributed, and either gives a description and a good faith estimate of the value of any goods or services provided in return for the contribution or states that no goods or services were provided in return for the contribution. File 2011 tax return The acknowledgement should be received by the due date (including extensions) of the return, or, if earlier, the date the return was filed. File 2011 tax return Keep the acknowledgement with other corporate records. File 2011 tax return Do not attach the acknowledgement to the return. File 2011 tax return Contributions of property other than cash. File 2011 tax return   If a corporation (other than a closely-held or a personal service corporation) claims a deduction of more than $500 for contributions of property other than cash, a schedule describing the property and the method used to determine its fair market value must be attached to the corporation's return. File 2011 tax return In addition the corporation should keep a record of: The approximate date and manner of acquisition of the donated property and The cost or other basis of the donated property held by the donor for less than 12 months prior to contribution. File 2011 tax return   Closely held and personal service corporations must complete and attach Form 8283, Noncash Charitable Contributions, to their returns if they claim a deduction of more than $500 for non-cash contributions. File 2011 tax return For all other corporations, if the deduction claimed for donated property exceeds $5,000, complete Form 8283 and attach it to the corporation's return. File 2011 tax return   A corporation must obtain a qualified appraisal for all deductions of property claimed in excess of $5,000. File 2011 tax return A qualified appraisal is not required for the donation of cash, publicly traded securities, inventory, and any qualified vehicles sold by a donee organization without any significant intervening use or material improvement. File 2011 tax return The appraisal should be maintained with other corporate records and only attached to the corporation's return when the deduction claimed exceeds $500,000; $20,000 for donated art work. File 2011 tax return   See Form 8283 for more information. File 2011 tax return Qualified conservation contributions. File 2011 tax return   If a corporation makes a qualified conservation contribution, the corporation must provide information regarding the legal interest being donated, the fair market value of the underlying property before and after the donation, and a description of the conservation purpose for which the property will be used. File 2011 tax return For more information, see section 170(h) of the Internal Revenue Code. File 2011 tax return Contributions of used vehicles. File 2011 tax return   A corporation is allowed a deduction for the contribution of used motor vehicles, boats, and airplanes. File 2011 tax return The deduction is limited, and other special rules apply. File 2011 tax return For more information, see Publication 526. File 2011 tax return Reduction for contributions of certain property. File 2011 tax return   For a charitable contribution of property, the corporation must reduce the contribution by the sum of: The ordinary income and short-term capital gain that would have resulted if the property were sold at its FMV and For certain contributions, the long-term capital gain that would have resulted if the property were sold at its FMV. File 2011 tax return   The reduction for the long-term capital gain applies to: Contributions of tangible personal property for use by an exempt organization for a purpose or function unrelated to the basis for its exemption; Contributions of any property to or for the use of certain private foundations except for stock for which market quotations are readily available; and Contributions of any patent, certain copyrights, trademark, trade name, trade secret, know-how, software (that is a section 197 intangible), or similar property, or applications or registrations of such property. File 2011 tax return Larger deduction. File 2011 tax return   A corporation (other than an S corporation) may be able to claim a deduction equal to the lesser of (a) the basis of the donated inventory or property plus one-half of the inventory or property's appreciation (gain if the donated inventory or property was sold at fair market value on the date of the donation), or (b) two times basis of the donated inventory or property. File 2011 tax return This deduction may be allowed for certain contributions of: Certain inventory and other property made to a donee organization and used solely for the care of the ill, the needy, and infants. File 2011 tax return Scientific property constructed by the corporation (other than an S corporation, personal holding company, or personal service corporation) and donated no later than 2 years after substantial completion of the construction. File 2011 tax return The property must be donated to a qualified organization and its original use must be by the donee for research, experimentation, or research training within the United States in the area of physical or biological science. File 2011 tax return Computer technology and equipment acquired or constructed and donated no later than 3 years after either acquisition or substantial completion of construction to an educational organization for educational purposes within the United States. File 2011 tax return Contributions to organizations conducting lobbying activities. File 2011 tax return   Contributions made to an organization that conducts lobbying activities are not deductible if: The lobbying activities relate to matters of direct financial interest to the donor's trade or business and The principal purpose of the contribution was to avoid federal income tax by obtaining a deduction for activities that would have been nondeductible under the lobbying expense rules if conducted directly by the donor. File 2011 tax return More information. File 2011 tax return   For more information on charitable contributions, including substantiation and recordkeeping requirements, see section 170 of the Internal Revenue Code, the related regulations, and Publication 526. File 2011 tax return Capital Losses A corporation can deduct capital losses only up to the amount of its capital gains. File 2011 tax return In other words, if a corporation has an excess capital loss, it cannot deduct the loss in the current tax year. File 2011 tax return Instead, it carries the loss to other tax years and deducts it from any net capital gains that occur in those years. File 2011 tax return A capital loss is carried to other years in the following order. File 2011 tax return 3 years prior to the loss year. File 2011 tax return 2 years prior to the loss year. File 2011 tax return 1 year prior to the loss year. File 2011 tax return Any loss remaining is carried forward for 5 years. File 2011 tax return When you carry a net capital loss to another tax year, treat it as a short-term loss. File 2011 tax return It does not retain its original identity as long term or short term. File 2011 tax return Example. File 2011 tax return A calendar year corporation has a net short-term capital gain of $3,000 and a net long-term capital loss of $9,000. File 2011 tax return The short-term gain offsets some of the long-term loss, leaving a net capital loss of $6,000. File 2011 tax return The corporation treats this $6,000 as a short-term loss when carried back or forward. File 2011 tax return The corporation carries the $6,000 short-term loss back 3 years. File 2011 tax return In year 1, the corporation had a net short-term capital gain of $8,000 and a net long-term capital gain of $5,000. File 2011 tax return It subtracts the $6,000 short-term loss first from the net short-term gain. File 2011 tax return This results in a net capital gain for year 1 of $7,000. File 2011 tax return This consists of a net short-term capital gain of $2,000 ($8,000 − $6,000) and a net long-term capital gain of $5,000. File 2011 tax return S corporation status. File 2011 tax return   A corporation may not carry a capital loss from, or to, a year for which it is an S corporation. File 2011 tax return Rules for carryover and carryback. File 2011 tax return   When carrying a capital loss from one year to another, the following rules apply. File 2011 tax return When figuring the current year's net capital loss, you cannot combine it with a capital loss carried from another year. File 2011 tax return In other words, you can carry capital losses only to years that would otherwise have a total net capital gain. File 2011 tax return If you carry capital losses from 2 or more years to the same year, deduct the loss from the earliest year first. File 2011 tax return You cannot use a capital loss carried from another year to produce or increase a net operating loss in the year to which you carry it back. File 2011 tax return Refunds. File 2011 tax return   When you carry back a capital loss to an earlier tax year, refigure your tax for that year. File 2011 tax return If your corrected tax is less than the tax you originally owed, use either Form 1139, Corporate Application for Tentative Refund, or Form 1120X, Amended U. File 2011 tax return S. File 2011 tax return Corporation Income Tax Return, to apply for a refund. File 2011 tax return Form 1139. File 2011 tax return    A corporation can get a refund faster by using Form 1139. File 2011 tax return It cannot file Form 1139 before filing the return for the corporation's capital loss year, but it must file Form 1139 no later than 1 year after the year it sustains the capital loss. File 2011 tax return Form 1120X. File 2011 tax return   If the corporation does not file Form 1139, it must file Form 1120X to apply for a refund. File 2011 tax return The corporation must file the Form 1120X within 3 years of the due date, includin