[Code of Federal Regulations]
[Title 26, Volume 13]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR]

[Page 121-122]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
Procedure and Administration--Table of Contents
 
Sec.  1.6016-1  Declarations of estimated income tax by corporations.

    (a) Requirement. For taxable years ending on or after December 31, 
1955, a declaration of estimated tax shall be made by every corporation 
(including unincorporated business enterprises electing to be taxed as 
domestic corporations under section 1361), which is subject to taxation 
under section 11 or 1201(a), or subchapter L, chapter 1 of the Code 
(relating to insurance companies), if its income tax under such sections 
or such subchapter L for the taxable year can reasonably be expected to 
exceed the sum of $100,000 plus the amount of any estimated credits 
allowable under section 32 (relating to tax withheld at source on 
nonresident aliens and foreign corporations and on tax-free covenant 
bonds), section 33 (relating to taxes of foreign countries and 
possessions of the United States), and section 38 (relating to 
investment in certain depreciable property).

[[Page 122]]

    (b) Definition of estimated tax. The term ``estimated tax'', in the 
case of a corporation, means the excess of the amount which such 
corporation estimates as its income tax liability for the taxable year 
under section 11 or 1201(a), or subchapter L, chapter 1 of the Code, 
over the sum of $100,000 and any estimated credits under sections 32, 
33, and 38. However, for the rule with respect to the limitation upon 
the $100,000 exemption for members of certain electing affiliated 
groups, see section 243(b)(3)(C)(v) and the regulations thereunder.
    (c) Examples. The application of this section may be illustrated by 
the following examples:

    Example (1). M, a corporation subject to tax under section 11, 
reasonably anticipates that it will have taxable income of $224,000 for 
the calendar year 1964. The normal tax and surtax result in an expected 
liability of $105,000. M determines that it will not have any allowable 
credits under sections 32, 33, and 38 for 1964. Since M's expected tax 
($105,000) exceeds the exemption ($100,000), a declaration of estimated 
tax is required to be filed, reporting an estimated tax of $5,000 
($105,000-$100,000) for the calendar year 1964.
    Example (2). Under the facts stated in example (1), except that M 
estimates it will have an allowable foreign tax credit under section 33 
in the amount of $4,000 and an allowable investment credit under section 
38 in the amount of $3,000, no declaration is required, since M's 
expected tax ($105,000) does not exceed the $100,000 plus the allowable 
credits totaling $7,000.

[T.D. 6768, 29 FR 14921, Nov. 4, 1964]