Which of the following statements is correct regarding the taxation of C corporations?

a. Schedule M-2 is used to reconcile net income computed for financial accounting purposes with taxable income reported on the corporation's tax return

b. The corporate return is filed on Form 1120S

c. Corporations can receive an automatic extension of nine months for filing the corporate return by filing Form 7004 by the due date for the return

d. A corporation with total assets of $7.5 million or more is required to file Schedule M-3 e. None of these

Question

Social Studies

Leah Owen

30 November, 11:26

Which of the following statements is correct regarding the taxation of C corporations?

a. Schedule M-2 is used to reconcile net income computed for financial accounting purposes with taxable income reported on the corporation's tax return

b. The corporate return is filed on Form 1120S

c. Corporations can receive an automatic extension of nine months for filing the corporate return by filing Form 7004 by the due date for the return

d. A corporation with total assets of $7.5 million or more is required to file Schedule M-3 e. None of these

+3

Answers (2)

Know the Answer?

Kaylie Ritter · Answer 1

e

Explanation:

Non of these are correct

The corporate level is where c corporations first pay tax. Taxes are not paid on every dollar earned. Instead expenses made as operating expenses are deducted by c corporations from revenues, reducing the taxable income of the business.

Also, in a C Corporation, shareholders get taxed if the company distributes dividends to them. When the corporation pays dividends, shareholders pay tax on these dividends. This causes double taxation on some shareholders. if a C Corporation makes profit and dividends are distributed to shareholders then there will be cases of double double taxation.

Ivy Gillespie · Answer 2

e. None of these

Explanation:

Let's list the use of option a to e

Schedule M-1 are been use to reconcile net income been calculated for financial accounting reasons with income taxable reported on the corporation's tax return. Schedule M-2 is been use to reconcile starting unappropriated kept earnings with finishing unappropriated kept earnings (that's for option a.). We know that Form 1120 is the meant for tax return for a C corporation. While Form 1120 S is meant for the the tax gain for an S corporation (that's for option b.). An automatic increasemeant of six (6) months (five months in the case of a calendar year corporation) is available by registering a timely Form 7004 for (the option c) while corporation having assets amounting to $10,00,000 or more than that are expected to fill the schedule M-3 form (which is option c)

Seeing all the explanation of the other options, no one matches the answer so option e is the answer