FAE174: Franchise and Excise Financial Institution and Captive REIT Tax Return Kit (includes Schedules A-F, H-K, SE, SF, M, N, T, U, V) (2025)
Tennessee · Tennessee DOR · Used for tax years 2025
Tennessee Form FAE174 is the 2025 franchise and excise tax return for financial institutions and captive real estate investment trusts. It reports net worth, taxable income, credits, payments, and the resulting tax due or overpayment, along with information about group members an
Who files this form
FAE174 is Tennessee’s franchise and excise tax return for financial institutions and captive real estate investment trusts (REITs).
Schedule I requires you to list all group members and disregarded single-member LLCs included in the combined return. The supplied form does not give complete rules for deciding whether an entity must file.
What you'll need
Have the following information and records ready, as applicable:
- Business details: Tennessee account number, FEIN, NAICS code, Secretary of State control number, legal name, mailing address, tax-year dates, and the date Tennessee operations began.
- Federal tax returns: The form draws on federal income, deductions, and gross receipts. Depending on your entity, it references Forms 1065, 1120S, 1120, 1120-REIT, 990-T, or Form 1040 schedules and Form 4797.
- Financial records: Assets, liabilities, indebtedness, and Tennessee and everywhere receipts. Captive REIT apportionment also calls for property and payroll information.
- Payment records: Prior-year overpayments, quarterly estimated payments, and extension payments.
- Group ownership records: Names, identification numbers, states of organization, and ownership details for entities listed on Schedule I.
- Carryover and credit records: Prior-year losses, credits used or expired, and qualifying equipment purchases or recapture information.
The form specifically calls for attachments for certain entries, including Form IE for Schedule J, Line 27; schedules for pass-through entity amounts on Lines 15 and 30; and a schedule for the optional deduction addback on Line 38.
Common mistakes
- Filling in Schedule A, Line 2 without the property-measure election. The form tells all other taxpayers to leave this line blank.
- Claiming credits above the stated limit. Schedule C, Line 9 cannot exceed Line 8.
- Including future business interest deductions in current deductions. Schedule J, Line 35 expressly excludes Line 33b, the business interest expense carryforward.
- Completing Schedule M when all earnings are business earnings. The form says not to complete that schedule in this situation.
- Missing equipment credit recapture. Schedule T requires partial recapture when equipment is sold or removed from Tennessee before the end of its federally established useful life.
- Leaving an overpayment unallocated. If Schedule C, Line 16 shows an overpayment, complete the credit-to-next-year and/or refund fields.
Questions people ask
What franchise and excise tax rates appear on the form?
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 tax credit recapture.
Can I apply an overpayment to next year?
Yes. If Schedule C, Line 16 shows an overpayment, the form lets you enter an amount to credit to next year’s tax, an amount to refund, or both.
Which apportionment schedule does a captive REIT use?
Schedule N is for captive REIT franchise tax apportionment. Captive REITs must complete Schedule N1 for excise tax apportionment. Eligible captive REITs electing the property, payroll, and triple-weighted sales method for franchise tax use Schedule N1 for both taxes.
How long can net operating losses be carried forward?
Schedule U says net operating losses may be carried forward to offset income for up to 15 years or until fully used, whichever happens first.