modified taxable income

(2) Determination of annualized income installment (A) In general In the case of any required installment, the annualized income installment is the excess (if any) of— (i) an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income and modified taxable income— (I) for the first 3 months of the taxable year, in the case of the 1st required installment, (II) for the first 3 months of the taxable year, in the case of the 2nd required installment, (III) for the first 6 months of the taxable year in the case of the 3rd required installment, and (IV) for the first 9 months of the taxable year, in the case of the 4th required installment, over (ii) the aggregate amount of any prior required installments for the taxable year. (B) Special rules For purposes of this paragraph— (i) Annualization The taxable income and modified taxable income shall be placed on an annualized basis under regulations prescribed by the Secretary. (ii) Applicable percentage In the case of the following required installments: The applicable percentage is: 1st 25 2nd 50 3rd 75 4th 100. (iii) Modified taxable income The term “modified taxable income” has the meaning given such term by section 59A(c)(1). (C) Election for different annualization periods (i) If the taxpayer makes an election under this clause— (I) subclause (I) of subparagraph (A)(i) shall be applied by substituting “2 months” for “3 months”, (II) subclause (II) of subparagraph (A)(i) shall be applied by substituting “4 months” for “3 months”, (III) subclause (III) of subparagraph (A)(i) shall be applied by substituting “7 months” for “6 months”, and (IV) subclause (IV) of subparagraph (A)(i) shall be applied by substituting “10 months” for “9 months”. (ii) If the taxpayer makes an election under this clause— (I) subclause (II) of subparagraph (A)(i) shall be applied by substituting “5 months” for “3 months”, (II) subclause (III) of subparagraph (A)(i) shall be applied by substituting “8 months” for “6 months”, and (III) subclause (IV) of subparagraph (A)(i) shall be applied by substituting “11 months” for “9 months”. (iii) An election under clause (i) or (ii) shall apply to the taxable year for which made and such an election shall be effective only if made on or before the date required for the payment of the first required installment for such taxable year.

Source

26 USC § 6655(e)(2)


Scoping language

For purposes of this paragraph
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