C Corporations
Notes from a continuing-education course on the C corporation income tax — Thomson Reuters Checkpoint Learning, C Corporations: Overview of Corporate Income Tax, taken in 2019 (final exam passed). Four chapters: taxable income and the accounting method and tax year elections; capital gains and losses with organizational, start-up and research costs; compensation limits and bad debts; charitable contributions. The course was current to the 2017 tax act. Everything that has moved since — mostly the July 2025 tax law — is brought current and tagged.
What changed since the course
| Corporate rate | Flat 21%, unchanged since 2018. The 2025 law left it alone. No preferential rate for capital gains. |
| Research costs | Domestic R&E deductible again for tax years beginning after 2024 (new §174A). The course’s three-choice framework was gone for 2022–2024 and is back in modified form. Foreign research still amortized over 15 years. |
| Interest limit | §163(j) 30%-of-ATI limit now uses an EBITDA base again (depreciation and amortization added back) for tax years beginning after 2024. |
| Cash method | §448(c) gross receipts test is indexed: $31 million for 2025; $80 million for manufacturing taxpayers for tax years beginning after 2025. The course said $25 million. |
| Charitable | New 1% floor on corporate contributions for tax years beginning after 2025, under the 10% ceiling. The course’s examples ignore the floor. |
| Due dates | June 30 year-end corporations move from September 15 to October 15 for tax years beginning after 2025. All others: 15th of the 4th month, six-month extension. |
| Advance payments | Rev. Proc. 2004-34 is gone; Reg. §1.451-8 (deferral method) and §451(b) (book conformity) govern. Same one-year deferral. |
| Executive pay | §162(m) adds the next five highest-paid employees from 2027 and aggregates controlled groups from 2026. |
| Unchanged | Capital loss 3-back / 5-forward; §195 and §248 $5,000 / $50,000 / 180 months; §280G 3× test and 20% excise; §166 bad debts; 10% charitable ceiling and 5-year carryover; substantiation thresholds. |
What goes in, what comes out, what is disallowed
Cash, accrual and hybrid; the 12-month rule; advance payments; Form 3115
Calendar and fiscal years, short years, Form 1128, estimates
Netting, §1231, the 3-back / 5-forward rule
§248, §195, §174 and the 2025 restoration of expensing
Reasonable compensation, §280G, §162(m), §166
Property rules, the 10% ceiling and the new 1% floor, substantiation
One-liners from the study questions and the final exam
How the course is organized
- Chapter 1 — types of corporations; corporate gross income and deductions; cash, accrual and hybrid methods; the 12-month rule; advance payments; economic performance; the tax year election and changing it. Study Questions 1–14.
- Chapter 2 — capital gains and losses and the netting process; §1231; organizational and start-up costs; research and experimental costs. Study Questions 15–26.
- Chapter 3 — unreasonable compensation; golden parachutes (§280G); the $1 million cap (§162(m)) before and after 2018; bad debts (§166). Study Questions 27–41.
- Chapter 4 — charitable contributions: ordinary income property, enhanced deductions, long-term capital gain property, the 10% limit and carryovers, substantiation. Study Questions 42–56.
- Final exam — 57-question bank, 25 drawn per sitting. The one-liners on the Quick Notes page come from those questions and the chapter study questions.
Sources used for the update
- P.L. 119-21, the One Big Beautiful Bill Act (July 4, 2025) — §174A, §163(j), §448(c), §170(b)(2) floor, §162(m), §168(k), §179
- Rev. Proc. 2024-40 (2025 inflation adjustments, §448(c)); Rev. Proc. 2025-32 (2026 adjustments) check
- Rev. Proc. 2025-28 (transition guidance for §174A); Rev. Proc. 2025-23 (list of automatic accounting method changes) check
- T.D. 9941 (Reg. §§1.451-3 and 1.451-8, advance payments and AFS conformity); T.D. 9932 (final §162(m) regulations)
- Form 1120 and Form 7004 instructions (due dates and extensions); Form 1128 and Form 3115 instructions
- Where I could not confirm a 2026 figure from a primary source the line carries a check tag.
Private reference, not client advice. Notes taken from a 2019 continuing-education course (Thomson Reuters Checkpoint Learning, C Corporations — Overview of Corporate Income Tax); figures and rules brought current to 2026 in October 2026 (P.L. 119-21, Rev. Proc. 2024-40, Rev. Proc. 2025-32). Verify current-year amounts before relying on them.