The Alto- Baxter affiliated group filed a consolidated return for the first time last year. The group does not come under the "large" corporation rules. For last year, the group reports a tax liability of $60,000. Cooper Corporation has a $30,000 tax liability last year. This year, the Alto- Baxter affiliated group purchased all of the Cooper stock. This year, the Alto- Baxter- Cooper group reports a $110,000 consolidated tax liability. To avoid penalties for the current year, the group must make timely estimated tax payments of how much during the year?

Question

Quizplus · Accepted Answer

The group must make estimated tax payments based on the lesser of 100% of last year's tax liability ($60,000) or 100% of this year's expected tax liability ($110,000). Since $60,000 is less, they should pay that amount to avoid penalties.

The Alto- Baxter Affiliated Group Filed a Consolidated Return for the First