Instructions For Form 4626 - 2005 (Page 8 of 12) in pdf

arising in tax years ending after August

the combined AMTI of all members of

those dividends is disallowed under the

27, 2005, the ATNOLD for the tax year

the controlled group. Divide the result

ACE rules).

is limited to the sum of:

among the members of the group in the

4. For the AMT Form 1118,

same manner as the $40,000 tentative

complete Schedule B, Part III,

1. The smaller of:

exemption is divided among the

Summary of Separate Credits. The total

a. The sum of the ATNOL

members. Enter this member’s share

foreign tax credit is the amount on line

carrybacks and carryforwards to the tax

on line 8a. The tentative exemption

11.

year attributable to net operating losses

must be divided equally among the

5. Enter on Form 4626, line 11, the

other than qualified Gulf Opportunity

members, unless all members consent

smaller of:

Zone losses, or

•

to a different allocation. See section

The amount on Form 4626, line

b. Ninety percent of AMTI for the tax

1561 for details.

10, or

year (figured without regard to the

•

The amount from the AMT Form

ATNOLD, as discussed on page 7, and

Line 8c. If this Form 4626 is for a

1118, Schedule B, Part III, line 11.

the domestic production activities

member of a controlled group of

deduction under section 199) plus

corporations, reduce the member’s

The corporation can use any

2. The smaller of:

share of the $40,000 tentative

reasonable method, consistently

exemption by the amount entered on

a. The sum of the ATNOL

applied, to apportion the disallowed

line 8b.

carrybacks to the tax year attributable

amount among the separate limitation

to qualified Gulf Opportunity Zone

categories (including the general

losses, or

Line 11. Alternative

limitation income category). Any AMT

b. 100% of AMTI for the tax year

foreign tax credit for each separate

Minimum Tax Foreign

(figured without regard to the ATNOLD,

limitation category that the corporation

as discussed on page 7, and the

cannot claim (because of the limitation

Tax Credit (AMTFTC)

domestic production activities deduction

fraction) is treated as a credit carryback

The AMTFTC is the foreign tax credit

under section 199) reduced by the

or carryforward for that limitation

refigured as follows.

amount determined under 1, above.

category under section 904(c). Because

1. Complete a separate AMT Form

these amounts may differ from the

Enter on line 6 the smaller of the

1118, Foreign Tax Credit —

amounts that are carried back or

ATNOLD or the ATNOLD limitation.

Corporations, for each separate

forward for the regular tax, keep

limitation category specified at the top

The ATNOL can be carried back or

adequate records for both the AMT and

of Form 1118. Include as a separate

forward using the rules outlined in

regular tax. When carried back or

limitation category dividends received

section 172(b). An election under

forward, the credit is reported on

from a corporation that qualifies for the

section 172(b)(3) to forego the

Schedule B, Part II, line 4, of the

possessions tax credit if the

carryback period for the regular tax also

carryover year’s AMT Form 1118 for

dividends-received deduction for those

applies for the AMT.

that separate limitation category.

dividends is disallowed under the ACE

The ATNOL carried back or forward

Simplified Limitation

rules.

may differ from the NOL (if any) that is

Election

In determining if any income is

carried back or forward for the regular

“high-taxed” in applying the separate

tax. Keep adequate records for both the

The corporation may elect to use a

limitation categories, use the AMT rate

AMT and the regular tax.

simplified section 904 limitation to figure

(20%) instead of the regular tax rate.

its AMTFTC. The corporation must

2. For each separate AMT Form

Line 7. Alternative

make the election for its first tax year

1118, if the corporation previously

beginning after 1997 for which it claims

Minimum Taxable

made or is making the simplified

an AMTFTC. If it does not make the

limitation election (discussed below),

election for that tax year, it may not

Income

skip Schedule A and enter on Schedule

make the election for a later tax year.

For a corporation that held a residual

B, Part II, line 6, the same amount you

Once made, the election applies to all

interest in a REMIC and is not a thrift

entered on that line for the regular tax.

later tax years and may only be

institution, line 7 may not be less than

Otherwise, complete Schedule A using

revoked with IRS consent.

the total of the amounts shown on

only income and deductions that are

If the corporation made the election

Schedule(s) Q (Form 1066), Quarterly

allowed for the AMT and attributable to

for each of its AMT separate limitations,

Notice to Residual Interest Holder of

sources outside the United States.

the corporation uses its separate

REMIC Taxable Income or Net Loss

3. For each separate AMT Form

limitation income or loss that it

Allocation, line 2c, for the periods

1118, complete Schedule B, Part II.

determined for the regular tax (instead

included in the corporation’s tax year. If

Enter any AMTFTC carryover on

of refiguring the separate limitation

the total of the line 2c amounts is larger

Schedule B, Part II, line 4. Enter the

income or loss for the AMT, as

than the amount the corporation would

AMTI from Form 4626, line 7, on

described earlier).

otherwise enter on line 7, enter that

Schedule B, Part II, line 7a. Enter the

total and write “Sch. Q” on the dotted

amount from Form 4626, line 10, on

Line 13

line next to line 7.

Schedule B, Part II, line 9.

When completing Schedule B, treat

Enter the corporation’s regular tax

Line 8. Exemption

as a tax paid to a foreign country 75%

liability (as defined in section 26(b))

of any withholding or income tax paid to

minus any foreign tax credit and

Phase-Out Computation

a U.S. possession on dividends

possessions tax credit (for example, for

Line 8a. If this Form 4626 is for a

received from a corporation that

Form 1120: Schedule J, line 3, minus

member of a controlled group of

qualifies for the possessions tax credit

the sum of Schedule J, lines 6a and

corporations, subtract $150,000 from

(if the dividends-received deduction for

6b). Do not include any:

-8-

Instructions For Form 4626 - 2005 Page 8

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