AICPA 2023 C Corporation Income Tax Return Checklist User Guide

: June 16, 2024
: AICPA

Table of Contents

AICPA 2023 C Corporation Income Tax Return Checklist
Product Information
Product Usage Instructions
Income

AICPA 2023 C Corporation Income Tax Return Checklist

Product Information

Specifications

Product Name: 2023 C Corporation Income Tax Return Checklist
Product Type: Tax Return Checklist
Form Number: Form 1120 (Short)

Product Usage Instructions

General

Determine if this is a first-year return or a final return. If it is, take additional steps as necessary. It is recommended to review the AICPA Tax Section’s Initial Business Return Filing Checklist and the IRS’s Closing a Business Checklist.
If you are a paid preparer, obtain a signed engagement letter.
Consider executing Form 2848 and/or Form 8821 to authorize representation before the IRS or state tax authority. Also, check if any state or local authorizations are required.
Request and review any correspondence with the IRS or state tax authority, including adjustments made to prior returns that could impact later returns.
Review the proforma or organizer for accuracy.
Review financial statements and footnotes for relevant information.
Review a copy of last year’s return that includes all forms and supporting schedules.
Check for carryover items.
Reconcile income and expenses with book entries and review the prior year’s Schedules M-1 or M-3.
Identify the authorized officer who will sign the return.
Confirm the taxpayer’s name, employer identification number, address, tax year, and business code.

Additional Steps

Obtain a copy of the federal and state Schedules K-1, K-2, and K-3 from each partnership or LLC in which the taxpayer is a partneror member.
Check if the corporation has gross receipts, on an aggregate basis (combined with relevant related parties), in excess of $29 million. If yes, confirm the use of the accrual basis of accounting, unless an exception applies, and consider other implications of exceeding this threshold.
Determine if the taxpayer has a written policy on the write-off of expenditures under a specified amount. If yes, check if it complies with the safe harbor election rules under Regs. Sec. 1.263(a)-1(f)(1).
If during the last half of the year, there were five or fewer individuals who own directly or indirectly more than 50% of the stock, consider the reporting requirements necessary.
Check if the corporation received (as a reward, award, or payment for property or services) or sold, exchanged, or otherwise disposed of a digital asset (or a financial interest in a digital asset) during the tax year. If yes, determine the reportable amount realized.
Determine if any qualified disaster relief provisions apply to the taxpayer for 2023 (related to due dates of federal and state/local returns).

Income

Request all Forms 1099 received by the taxpayer.
Determine if the taxpayer made or received any below-market interest loans or engaged in any transactions as to which Sec. 483 or Sec. 1274 apply. If yes, determine the amount of imputed interest.
Check if there were any related-party transactions. If yes, determine the effects of Sec. 267 and Sec. 1239.
Check if the installment method rules apply to any sales made by the taxpayer during the taxable year. If yes, obtain the necessary information.
Check if the taxpayer leased any vehicles for business use in the taxable year. If yes, calculate the appropriate income inclusion for leased vehicles and property under IRS tables.

FAQ

Q: What is the purpose of reviewing last year’s return?

A: Reviewing last year’s return helps ensure that all forms and supporting schedules are included and that any carryover items are properly accounted for.

Q: What should I do if the corporation exceeds $29 million in gross receipts?

A: If the corporation exceeds $29 million in gross receipts, you should confirm the use of the accrual basis of accounting, unless an exception applies. Additionally, consider the implications of exceeding this threshold.

Q: How can I determine the reportable amount realized for a digital asset?

A: To determine the reportable amount realized for a digital asset (or a financial interest in a digital asset), you need to review the transactions involving the asset during the tax year.

2023 C Corporation Income Tax Return Checklist Form 1120 (Short)

100) General

NOTE: This checklist does not include steps to assist clients with their compliance with the Corporate Transparency Act (“CTA”), including beneficial ownership information (“BOI”) reporting. If an engagement to assist with compliance with CTA is entered into, a separate engagement letter should be obtained. Consider consulting with your liability insurance provider and legal counsel for further information. Information regarding the BOI reporting requirements can be found at https://www.fincen.gov/boi.

200) Income

Financial transactions

Gain or loss on property

Other income

300) Deductions

Depreciation/amortization

Interest expense and Sec. 163(j) business interest limitation

Business gifts, travel, meals and entertainment

Charitable contributions

Uniform capitalization rules/long-term contracts(revenue)

Other deductions

Net operating losses (NOLs)

400) Credits

500) Elections

600) Tax Payments

700) Foreign transactions and reporting

800) Other federal and state/local filing issues

900) Professional responsibilities and reminders – FOR PAID PREPARER USE

2023 C Corporation Income Tax Return Checklist – Form 1120 (Short) | 10

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