Period of underpayment

# 1.

May 1, if a calendar year, or the 15th day of the fourth month following the close of the taxable year, if a fiscal year, or

# 2.

With respect to any portion of the underpayment, the date on which such portion is paid. For purposes of this subdivision, a payment of estimated tax on any installment date shall be considered a payment of any previous underpayment only to the extent such payment exceeds the amount of the installment determined under subdivision 1 of 23VAC10-115-161 for such installment date.

# 3.

Example: The principles of 23VAC10-115-160, 23VAC10-115-161, and 23VAC10-115-162 may be illustrated by the following: On or before May 1, 1988, the trustee of The Jones Trust could reasonably expect the fiduciary's Virginia tax liability for calendar year 1988 to exceed $150. Therefore, the trustee timely makes four installment payments: $1,500 on May 1, 1988, and June 15, 1988, and $2,000 on September 15, 1988, and January 15, 1989. When the fiduciary income tax return is filed on May 1, 1989, the tax liability is $10,000. The total paid ($7,000) is less than 90% of the tax ($9,000). Therefore, an addition to the tax in the amount of $174.56 is due, computed as follows:

INSTALLMENT 1st 2nd 3rd 4th

AMOUNT OF UNDERPAYMENT

90% of the tax / 4 2,250.00 2,250.00 2,250.00 2,250.00

Actual Payment 1,500.00 1,500.00 2,000.00 2,000.00

Underpayment 750.00 750.00 250.00 250.00

PERIOD OF UNDERPAYMENT

Date due 5/1/88 6/15/88 9/15/88 1/15/89

Date Paid 5/1/89 5/1/89 5/1/89 5/1/89

No. of days (total) 365 320 228 106

No. of days underpayment is

subject to each rate

4/1/88 - 6/30/88 at 10% 60 15 0 0

7/1/88 - 9/30/88 at 10% 92 92 15 0

10/1/88 - 12/31/88 at 11% 92 92 92 0

1/1/89 - 5/1/89 at 11% 121 121 121 106

ADDITION TO THE TAX

4/1/88 - 6/30/88 at 10% 12.33 3.08 0.00 0.00

7/1/88 - 9/30/88 at 10% 18.90 18.90 1.03 0.00

10/1/88 - 12/31/88 at 11% 20.79 20.79 6.93 0.00

1/1/89 - 5/1/89 at 11% 27.35 27.35 9.12 7.99

Total addition = 174.56 79.37 70.12 17.08 7.99