Video: Calculating Tax Savings for C Corporations

Tax planning for C corporations involves strategizing to minimize tax liability through lawful use of tax laws and regulations while considering the timing of income, deductions, and credits, and the selection of investments and types of revenue.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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All right, enough of the fluff in the introduction. Now for the meat of it all, or if you're vegetarian, the bean burger of it all. Here we go. We're going to start off by calculating the tax savings from utilizing those net operating losses and those capital loss carryovers for C-Corps. Now, you could easily see this in a simulation with a big schedule where you have to carry the loss over to multiple years, right? How much of that loss can you use each year? The tax rules on this can change year to year, depending on who knows. The next will obviously update you based on the tax rules, but this has changed, I would say relatively significantly over the last 10 years, depending on the Tax Cuts and Jobs Act and what specific amounts you can use in what specific years. So just keep in mind, this is something that does change from time to time. And I say relatively because a lot of the other tax code just does not change. So if something changes even a little bit, it's a pretty good amount of change. All right, enough of that. Now we know that we can use, now these are rules we went over already in our other C-Corp lessons, right? We can use NOLs and capital loss carryovers to reduce our taxable income, to save money. Great. Wonderful. But how do we do that? Well, we're going to see how we do that. In utilizing net operating losses, now what's the difference, right? Net operating loss, this is from our net income. We report net loss on our 10, or not 1065, on our 1120. Always getting those tax forms mixed up, but make sure you get those down for the exam. And

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C corporations

Module: 3 Concepts, 30 Videos

Corporations: Consolidated Tax Returns Overview

1:22

Introduction to Consolidated Tax Returns

2:25

Entities Not Able to File a Consolidated Return

3:20

Requirements for Affiliated Groups