Bass Corp., a calendar year C corporation, made qualifying Year 2 estimated tax deposits based on its actual Year 1 tax liability. On March 15, Year 3, Bass filed a timely automatic extension request for its Year 2 corporate income tax return.  Estimated tax deposits and the extension payment totaled $7,600.  This amount was 95% of the total tax shown on Bass' final Year 2 corporate income tax return.  Bass paid $400 additional tax on the final Year 2 corporate income tax return filed before the extended due date.  For the Year 2 calendar year, Bass was subject to pay:

   I.     Interest on the $400 tax payment made in Year 3.
   II.    A tax delinquency penalty.

Becker's answer is I only

My question: Why the company not suject to a penalty? the book said that a corporation should pay 100% of the tax show on the current year return, and the question only have 95%, so why not penalty? 

Musiccamor04!

ThX! Now i got it! my god...i hate tricky question. ^^

Can anyone help me correct me on my understanding on NOL

When i am calculating the NOL in current year, I did not take the previous NOL carryfoward into account and also I do not include the charity contribution deduction. So i start with :

Gross income(include dividend income) - expense - dividend received deduction---------> Then i get a NOL?

Why are we calculating the NOL and under what kind of circumstance will we use the NOL in the calculation?