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Pub. 542, Corporations 2004 Tax Year

Introductory Material

This is archived information that pertains only to the 2004 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Attention: This publication will not be revised for use in preparing 2004 returns. For the next revision, we are considering using a new format that will not require annual updates. Since the tax law this publication covers generally does not significantly change from year to year, you can use this 2003 text as a general guide to prepare 2004 returns. To find changes that may affect 2004 returns, see What's New in your income tax return instructions; Publication 553, Highlights of 2004 Tax Changes; or What's Hot In Tax Forms, Pubs, and Other Tax Products at www.irs.gov/formspubs. To comment on this revision process, see Comments and Suggestions on page 2.

Important Change for 2003

Accumulated earnings tax. Effective January 1, 2003, the accumulated earnings tax has decreased from 38% to 15%. For more information, see Accumulated Earnings Tax.

Important Reminders

Reportable transactions. You must file Form 8886, Reportable Transaction Disclosure Statement, to report certain transactions. Reportable corporate transactions include:

  1. Transactions that are the same as or substantially similar to tax avoidance transactions identified by the IRS,

  2. Transactions offered to you under conditions of confidentiality,

  3. Transactions for which you have, or a related party has, contractual protection against disallowance of the tax benefits,

  4. Transactions that result in losses of at least $10 million in any single year or $20 million in any combination of years,

  5. Transactions resulting in book-tax differences of more than $10 million in any year, and

  6. Transactions with asset holding periods of 45 days or less and that result in a tax credit of more than $250,000.

For more information, see the Instructions for Form 8886.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child.

Introduction

This publication discusses the general tax laws that apply to ordinary domestic corporations. It explains the tax law in plain language so it will be easier to understand. However, the information given does not cover every situation and is not intended to replace the law or change its meaning.

Some corporations may meet the qualifications for electing to be S corporations. For information on S corporations, see the instructions for Form 1120S, U.S. Income Tax Return for an S Corporation.

Comments and suggestions.   We welcome your comments about this publication and your suggestions for future editions.

  You can email us at *taxforms@irs.gov. Please put “Publications Comment” on the subject line.

  You can write to us at the following address:


Internal Revenue Service
Business Forms and Publications
SE:W:CAR:MP:T:B
1111 Constitution Ave. NW
Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

Useful Items - You may want to see:

Publication

  • 535 Business Expenses

  • 538 Accounting Periods and Methods

  • 544 Sales and Other Dispositions of Assets

  • 925 Passive Activity and At-Risk Rules

Form (and Instructions)

  • 1096
    Annual Summary and Transmittal of U.S. Information Returns

  • 1099–DIV
    Dividends and Distributions

  • 1120
    U.S. Corporation Income Tax
    Return

  • 1120–A
    U.S. Corporation Short-Form Income Tax Return

  • 1120–W
    (WORKSHEET) Estimated Tax for Corporations

  • 1120X
    Amended U.S. Corporation
    Income Tax Return

  • 1138
    Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback

  • 1139
    Corporation Application for
    Tentative Refund

  • 2220
    Underpayment of Estimated Tax by Corporations

  • 3800
    General Business Credit

  • 4466
    Corporation Application for Quick Refund of Overpayment of
    Estimated Tax

  • 4562
    Depreciation and Amortization
    (Including Information on Listed Property)

  • 4626
    Alternative Minimum Tax—Corporations

  • 5452
    Corporate Report of Nondividend Distributions

  • 7004
    Application for Automatic
    Extension of Time To File
    Corporation Income Tax Return

  • 8109
    Federal Tax Deposit Coupon

  • 8810
    Corporate Passive Activity Loss and Credit Limitations

  • 8832
    Entity Classification Election

See How To Get Tax Help near the end of this publication for information about getting publications and forms.

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