Volos Company (a calendar-year corporation) began operations in March of 2016 and was not profitable through December of 2017. Volos has been profitable for the first quarter of 2018 and is trying to determine its first quarter estimated tax payment. It will have no estimated tax payment requirement in 2018 because it had no tax liability for the 2017 tax year and has been in business for at least 12 months.

Question

Quizplus · Accepted Answer

Estimated taxes are due if the corporation expects to incur a tax liability of $500 or more for the year. A corporation can base its estimated payments on the prior year's tax liability only if it is positive, which is not the case here.

Volos Company (A Calendar-Year Corporation) Began Operations in March of 2016