Section 2: 30–40%T5

C Corporation Tax Compliance

Exam insight

C corporations pay a flat 21% tax at the entity level, and TCP tests whether you can bridge book income to taxable income and apply the special deductions and penalty taxes. Most of the work sits in the Schedule M-1/M-3 book-to-tax adjustments, the dividends-received deduction, and the NOL and capital loss limits.

What AICPA wants you to know

1Compute C corporation taxable income and the 21% flat tax from book income using Schedule M-1 adjustments.
2Apply the dividends-received deduction at the 50%, 65%, and 100% tiers, including the taxable-income limitation.
3Apply the 10% charitable contribution limit and the corporate capital loss carryback/carryforward rules.
4Apply the 80%-of-taxable-income NOL limitation with no carryback and indefinite carryforward.
5Identify when the accumulated earnings tax and personal holding company tax apply and how they are computed.
6Determine corporate estimated tax payment requirements and safe harbors.

Patterns in this topic

The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.

The C Corporation PlanRun the C corporation at 21 percent: take the DRD by ownership tier, cap the NOL at 80 percent, and weigh double taxation against 1202 QSBS.

Exam tip

Study smarter: before you expand each card, cover the screen and try to recall what the concept means from its title alone. Retrieving it from memory builds the recall the exam actually tests, and it beats re-reading.