FAE174: Franchise and Excise Financial Institution and Captive REIT Tax Return Kit (includes Schedules A-H, SF, J, K, SE, M, N, T, U, V) (2024)
Tennessee · Tennessee DOR · Used for tax years 2024
Tennessee Form FAE174 is the 2024 franchise and excise tax return for financial institutions and captive real estate investment trusts. It reports net worth, income subject to excise tax, credits, payments, and the resulting tax due or overpayment.
Who files this form
FAE174 is Tennessee’s 2024 franchise and excise tax return for financial institutions and captive real estate investment trusts (REITs).
Schedule I asks for all group members included in a combined return and all disregarded single-member LLCs included in the return. The supplied form does not give full rules for determining who is required to file.
What you'll need
Have the information needed for the schedules that apply to you:
- Business identification: Legal name, mailing address, FEIN, Tennessee account number, NAICS code, Secretary of State control number, and the date Tennessee operations began.
- Federal tax return information: Gross receipts or sales and the income and deduction amounts requested by the applicable Schedule J1, J2, J3, or J4.
- Financial records: Assets, liabilities, net worth, and Tennessee and everywhere receipts. Captive REIT apportionment schedules also request property, payroll, and sales information.
- Payment records: Available prior-year overpayment, quarterly estimated payments, and any extension payment.
- Group details: Names, identification numbers, states of organization, and ownership information for members and disregarded entities listed on Schedule I.
- Carryover and credit information: Prior-year losses and industrial machinery and research and development equipment credits, if applicable.
Schedule J requires attached schedules for the pass-through entity amounts reported on Lines 15 and 30. Attach Form IE when reporting the intangible expense deduction on Schedule J, Line 27.
Common mistakes
- Not rounding amounts: The form says to round to the nearest dollar.
- Completing Schedule A, Line 2 without the property-measure election: Only taxpayers electing to calculate franchise tax based on the property measure enter an amount. All others must leave it blank.
- Claiming too much total credit: Schedule C, Line 9 cannot exceed Line 8.
- Including a future interest carryforward in current deductions: Schedule J, Line 35 specifically excludes Line 33b.
- Completing Schedule M when all earnings are business earnings: The form says not to complete that schedule in this case. Allocation and apportionment schedules may be used only by taxpayers doing business outside Tennessee under the cited rules.
- Overlooking industrial machinery credit recapture: The form requires partial recapture if the equipment was sold or removed from Tennessee before the end of its life established for federal income tax purposes.
Questions people ask
What tax rates does the form use?
Schedule A calculates franchise tax at 25 cents per $100, or major fraction thereof, on the greater of Lines 1 and 2, with a $100 minimum. Schedule B calculates excise tax at 6.5% of the income on Line 4, then adds any credit recapture.
Is there an excise tax standard deduction?
Yes. Schedule J, Line 37 uses the lesser of Line 36 or $50,000, with zero entered if negative. Schedule M, Line 10 uses $50,000 minus the amount reported on Schedule J, Line 37, limited to Schedule M, Line 9.
What can I do with an overpayment?
If Schedule C, Line 16 shows an overpayment, the form lets you request a credit toward next year’s tax, a refund, or both.
How long can net operating losses be carried forward?
Schedule U says net operating losses may be carried forward for up to 15 years or until fully used, whichever happens first.