Question

Last year, BTA Corporation, a calendar-year taxpayer, reported a net operating loss of $10,000 and a $0 tax liability. BTA confidently anticipates a current year tax liability of $240,000.

What minimum estimated tax payments should BTA make for the first, second, third, and fourth quartyers respectively (ignore the annualized income method), assuming the following?.
Required:
a. BTA is not considered to be a large corporation for estimatedtax purposes
b. BTA is considered to be a large corporation for estimated tax purposes?

Answer 1

Answer and Explanation:

a. In the case when the BTA does not have the tax liability previous year so it would use the present year liability to measure out the minimum predicted tax payment quarter wise

So the current year tax liability is $240,000

So the estimated tax payment is

= $240,000 × 25%

= $60,000 per quarter

b. In this given case also the predicted quarterly tax payment is $60,000 because the BTA cannot applied the previous year tax exception for any type of quarter