Home / CPA Course / REG

C corporations

REG Chapter 19 · Area V · Blueprint V.B

A C corporation is a taxpayer in its own right: it pays a flat 21% on its taxable income, and its shareholders pay again when profits come out as dividends. This chapter follows Coastal Pottery Inc. from formation under §351 to its tax return: corporate taxable income, the dividends-received deduction, net operating and capital losses, credits and estimated tax, then earnings and profits and how distributions are taxed, and finally state taxes, where nexus decides whether a state can tax at all and allocation and apportionment decide how much. The Blueprint asks you to calculate taxable income, losses and credits, and to apportion income among states. Figures are for tax year 2026.

In this chapter

1. Forming a corporation under §351
2. Corporate taxable income
3. The dividends-received deduction
4. Net operating losses and capital losses
5. Corporate tax, credits and estimated payments
6. Earnings and profits
7. Distributions to shareholders
8. State taxes: nexus
9. Allocation and apportionment

This chapter has 9 lessons, 50 practice MCQs with explanations and 20 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Formation
• taxable income
• dividends received deduction
• net operating and capital losses
• credits
• E&P and distributions
• nexus, allocation and apportionment

Chapter 18: Book and tax differences · Chapter 20: S corporations