Instructions For Form 4626 - 2005 printable pdf download

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Department of the Treasury

Internal Revenue Service

Instructions for Form 4626

Alternative Minimum Tax—Corporations

Section references are to the Internal Revenue Code unless otherwise noted.

•

AMT must be figured on a consolidated

Gross receipts include those of any

General Instructions

basis.

predecessor of the corporation,

including non-corporate entities.

•

Who Must File

For a short tax year, gross receipts

What’s New

must be annualized by multiplying them

•

No alternative minimum tax (AMT)

by 12 and dividing the result by the

If the corporation is a “small

adjustment is required for depreciation

number of months in the tax year.

corporation” exempt from the

of certain natural gas gathering lines

•

The gross receipts of all persons

AMT (as explained below), do

CAUTION

placed in service after April 11, 2005.

not file Form 4626.

treated as a single employer under

See page 3 of the instructions.

section 52(a), 52(b), 414(m), or 414(o)

•

Generally, file Form 4626 if either of

No AMT adjustment is required for

must be aggregated.

the following apply.

depreciation of qualified Gulf

•

The corporation’s taxable income or

Loss of small corporation status. If

Opportunity Zone property acquired

(loss) before the net operating loss

the corporation qualified as a small

after August 27, 2005, that is eligible for

(NOL) deduction plus its adjustments

corporation exempt from the AMT for its

the special depreciation allowance. See

and preferences total more than

previous tax year, but does not meet

page 3 of the instructions.

•

$40,000 or, if smaller, its allowable

the gross receipts test for its tax year

Interest income from qualified Gulf

exemption amount.

beginning in 2005, it loses its AMT

Opportunity Zone bonds issued after

•

The corporation claims any general

exemption status. Special rules apply in

December 21, 2005, is not a preference

business credit, the qualified electric

figuring AMT for the tax year beginning

item for AMT purposes. See page 5 of

vehicle credit, the nonconventional

in 2005 and all later years based on the

the instructions.

source fuel credit, or the credit for prior

•

“change date.” The change date is the

The 90%-of-alternative-minimum-

year minimum tax.

first day of the corporation’s tax year

taxable-income (AMTI) limit on the

beginning in 2005 (the first tax year for

alternative tax net operating loss

Exemption for Small

which the corporation ceased to be a

deduction (ATNOLD) does not apply to

Corporations

small corporation). Where this applies,

alternative tax net operating loss

complete Form 4626 taking into

(ATNOL) carrybacks and carryforwards

A corporation is treated as a small

account the following modifications.

attributable to qualified Gulf Opportunity

corporation exempt from the AMT for its

•

The adjustments for depreciation and

Zone losses arising in tax years ending

current tax year beginning in 2005 if:

amortization of pollution control facilities

after August 27, 2005. Such ATNOL

1. The current year is the

apply only to property placed in service

carrybacks and carryforwards can be

corporation’s first tax year in existence

on or after the change date.

applied to offset up to 100% of AMTI.

(regardless of its gross receipts for the

•

The adjustment for mining

See the instructions beginning on page

year), or

exploration and development costs

2. Both of the following apply.

•

applies only to amounts paid or

The 90-percent limit on the use of the

a. It was treated as a small

incurred on or after the change date.

AMT foreign tax credit to offset AMT no

corporation exempt from the AMT for all

•

The adjustment for long-term

longer applies. 100% of the AMT

prior tax years beginning after 1997.

contracts applies only to contracts

foreign tax credit can be used in

b. Its average annual gross receipts

entered into on or after the change

figuring the AMT. See page 8 of the

for the 3-tax-year period (or portion

date.

instructions.

thereof during which the corporation

•

When figuring the amount to enter on

An AMT adjustment is required for a

was in existence) ending before its tax

line 6, for any loss year beginning

corporation’s domestic production

year beginning in 2005 did not exceed

before the change date, use the

activities deduction. Adjusted current

$7.5 million ($5 million if the corporation

corporation’s regular tax NOL for that

earnings (ACE) is not increased. See

had only 1 prior tax year).

year.

page 6 of the instructions.

•

Figure the limitation on line 4d only

The following rules apply when

for prior tax years beginning on or after

Purpose of Form

figuring gross receipts under 2b above.

•

the change date.

Gross receipts must be figured using

Use Form 4626 to figure the alternative

•

the corporation’s tax accounting

Enter zero on line 2c of the Adjusted

minimum tax (AMT) under section 55

Current Earnings (ACE) Worksheet on

method and include total sales (net of

for a corporation that is not exempt

returns and allowances), amounts

page 12. When completing line 5 of the

from the AMT.

ACE Worksheet, take into account only

received for services, and income from

Consolidated returns. For an

investments and other sources. See

amounts from tax years beginning on or

after the change date. Also, for line 8 of

affiliated group filing a consolidated

Temporary Regulations section

return under the rules of section 1501,

1.448-1T(f)(2)(iv) for more details.

the ACE Worksheet, take into account

Cat. No. 64443L

Instructions For Form 4626 - 2005

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