Where on 1120 would prior year refund and interest go?


W

Wally

Hello all.
I'd like to know the following:

A company has until 10/15/2006 to file their 2005 corporate
form 1120 tax return.

1) If the company made an IRS filing penalty payment in 2005
where does this penalty payment amount get reflected, on
Schedule M-1?
2) In 2005 the company received a refund from y/e 2004.
Where does the refund amount get listed and also where does
the interest amount get reported?

Thanks.
Walter
 
Last edited by a moderator:
Ad

Advertisements

M

Mike Wellman

A company has until 10/15/2006 to file their 2005 corporate
form 1120 tax return.

1) If the company made an IRS filing penalty payment in 2005
where does this penalty payment amount get reflected, on
Schedule M-1?
Assuming you did the correct thing and never recognized the
penalty as an expense, it is not income either when abated.
It would be shown as a reconciling item between book and tax
income as an item of book income but not subject to federal
income tax.
2) In 2005 the company received a refund from y/e 2004.
Where does the refund amount get listed and also where does
the interest amount get reported?
First the interest - show it as current year interest
income. As for the refund, you should have setup a
receivable account when the tax return was prepared. It
should only affect the balance sheet. If the refund was
somehow unexpected, it is theoretically a prior period
adjustment but, unless material, I would reduce current year
tax. This is not pure accounting, but it is how things are
often done.

I am sure there are a few anal-retentive types that will
take issue with this - but I assume we are not talking
General Motors.
 
Last edited by a moderator:

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top