Vireo Corporation,a calendar year C corporation,has taxable income of $1.3 million and $3 million for 2009 and 2010,respectively.The minimum 2010 estimated tax installment payments for Vireo are:
A)April 15,2010,$110,500;June 15,2010,$110,500;September 15,2010,$110,500;December 15,2010,$110,500.
B)April 15,2010,$110,500;June 15,2010,$399,500;September 15,2010,$399,500;December 15,2010,$399,500.
C)April 15,2010,$110,500;June 15,2010,$399,500;September 15,2010,$255,000;December 15,2010,$255,000.
D)April 15,2010,$255,000;June 15,2010,$255,000;September 15,2010,$255,000;December 15,2010,$255,000.
E)None of the above.

Question

Quizplus · Accepted Answer

C corporations generally must make estimated tax payments in four equal installments. The payments are due on April 15, June 15, September 15, and December 15 of the tax year. To avoid an underpayment penalty, the corporation must pay the lesser of 100% of the tax shown on the current year's return or 100% of the tax shown on the previous year's return (110% if the previous year's taxable income was greater than $1 million). In this case, the tax shown on Vireo's 2009 return was $1.3 million, so the estimated tax payments for 2010 should be at least $1.3 million divided by four, or $325,000 per installment. The only option that meets this requirement is Choice C, which calls for payments of $110,500 on April 15, $399,500 on June 15 and September 15, and $255,000 on December 15.

Vireo Corporation,a Calendar Year C Corporation,has Taxable Income of $1