This template calculates the accumulated earnings tax. The accumulated earnings tax (AET) is a penalty tax imposed on corporations for unreasonably accumulating earnings in the corporation. The tax is assessed at the highest individual tax rate on the corporation’s accumulated income and is in addition to the regular corporate income tax. The tax is assessed by the IRS, rather than self-assessed by the taxpayer.
If the input worksheet is completed, a journal entry is also generated to record the tax liability.
All of the information needed to produce the computation is entered on the Input worksheet. The yellow highlighted cells are calculated fields, and no data should be entered in these cells. Gray cells are not calculated fields, but data should not be entered in these cells.
- Section 243 dividends received deduction
- Section 244 deduction for dividends received on certain preferred stock
- Section 245 deduction for dividends received from certain foreign corporations
- Section 247 deduction for dividends paid on certain preferred stock of public utilities
- Section 561(a)(1) dividends paid during the tax year, not including dividends paid during the first 2½ months of the tax year that are considered Section 563 dividends for the prior year
- Section 565 consent dividends
- Section 563 dividends paid within the 2½ months after the close of the tax year
Capital loss carryovers (Enter the amount of capital loss carryovers because these amounts are disallowed in computing accumulated taxable income. The current year disallowed capital losses are entered below.)
Excess charitable contributions (Enter charitable contributions made during the year in excess of the deduction portion.)
Capital losses disallowed (Enter the amount of current year capital losses that are disallowed for regular tax purposes.)
Excess of net long-term capital gains (LTCG) over short-term capital losses (STCL)
Taxes on excess net LTCG over STCL
Deduction allowed to bank affiliates (Enter the deduction for amounts used to purchase marketable securities, as required by the Board of Governors of the Federal Reserve System.)
Federal and foreign income taxes accrued or deemed paid during the year (This amount does not include the accumulated earnings tax, the personal holding company tax, or any taxes imposed by corresponding sections of a prior income tax law.)
Current year E&P retained for reasonable business needs:
- Working capital requirement
- Other reasonable needs
Accumulated E&P at end of prior year
Dividends paid from E&P after close of prior year, treated as paid during prior year