Instructions For Form 4626 - 2010 Page 8

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statement showing the computation.
applied, to apportion the disallowed
Adjusted Current
The corporation may use the format of
amount among the separate limitation
the 2009 Form 4626, Part II, as a
categories (including the general
Earnings (ACE)
guide.
limitation income category). Any AMT
Worksheet Instructions
foreign tax credit for each separate
Line 11. Alternative
limitation category that the corporation
cannot claim (because of the limitation
Treatment of Certain
Minimum Tax Foreign
fraction) is treated as a credit carryback
Ownership Changes
Tax Credit (AMTFTC)
or carryforward for that limitation
If a corporation with a net unrealized
category under section 904(c). Because
The AMTFTC is the foreign tax credit
built-in loss (within the meaning of
these amounts may differ from the
refigured as follows.
section 382(h)) undergoes an
amounts that are carried back or
1. Complete a separate AMT Form
ownership change (within the meaning
forward for the regular tax, keep
1118, Foreign Tax
of section 382(g) and Regulations
adequate records for both the AMT and
Credit — Corporations, for each
section 1.56(g)-1(k)(2)), refigure the
regular tax. When carried back or
separate limitation category specified at
adjusted basis of each asset of the
forward, the credit is reported on
the top of Form 1118. Include as a
corporation (immediately after the
separate limitation category dividends
Schedule B, Part II, line 5, of the
ownership change). The new adjusted
received from a corporation that
carryover year’s AMT Form 1118 for
basis of each asset is its proportionate
qualifies for the American Samoa
that separate limitation category.
share (based on respective fair market
economic development credit if the
values) of the fair market value of the
dividends-received deduction for those
corporation’s assets (determined under
Simplified Limitation
dividends is disallowed under the ACE
section 382(h)) immediately before the
Election
rules.
ownership change.
In determining if any income is
To determine if the corporation has a
The corporation may elect to use a
“high-taxed” in applying the separate
net unrealized built-in loss immediately
simplified section 904 limitation to figure
limitation categories, use the AMT rate
before an ownership change, use the
its AMTFTC. The corporation must
(20%) instead of the regular tax rate.
aggregate adjusted basis of its assets
make the election for its first tax year
2. For each separate AMT Form
used for figuring its ACE. Also, use
beginning after 1997 for which it claims
1118, if the corporation previously
these new adjusted bases for all future
an AMTFTC. If it does not make the
made or is making the simplified
ACE calculations (such as depreciation
election for that tax year, it may not
limitation election (discussed below),
and gain or loss on disposition of an
make the election for a later tax year.
skip Schedule A and enter on Schedule
asset).
Once made, the election applies to all
B, Part II, line 7, the same amount you
Line 2. ACE Depreciation
later tax years and may only be
entered on that line for the regular tax.
Adjustment
revoked with IRS consent.
Otherwise, complete Schedule A using
only income and deductions that are
Line 2a. AMT depreciation.
allowed for the AMT and attributable to
If the corporation made the election
Generally, the amount entered on this
sources outside the United States.
for each of its AMT separate limitations,
line is the depreciation the corporation
3. For each separate AMT Form
the corporation uses its separate
claimed for the regular tax (Form 4562,
1118, complete Schedule B, Part II.
limitation income or loss that it
line 22), modified by the AMT
Enter any AMTFTC carryover on
determined for the regular tax (instead
depreciation adjustments reported on
Schedule B, Part II, line 5. Enter the
of refiguring the separate limitation
lines 2a and 2o of Form 4626.
AMTI from Form 4626, line 7, on
income or loss for the AMT, as
Line 2b(1). Post-1993 property. For
Schedule B, Part II, line 8a. Enter the
described earlier).
property placed in service after 1993,
amount from Form 4626, line 10, on
the ACE depreciation is the same as
Schedule B, Part II, line 10. When
the AMT depreciation. Therefore, enter
completing Schedule B, treat as a tax
Line 13
on line 2b(1) the same depreciation
paid to a foreign country 75% of any
expense you included on line 2a of this
Enter the corporation’s regular tax
withholding or income tax paid to
worksheet for such property.
liability (as defined in section 26(b))
American Samoa on dividends received
Line 2b(2). Post-1989, pre-1994
minus any foreign tax credit and minus
from a corporation that qualifies for the
property. For property placed in
American Samoa economic
any American Samoa economic
service in a tax year that began after
development credit (if the
development credit (for example, Form
1989 and before 1994, use the ADS
dividends-received deduction for those
1120, Schedule J, line 2; minus any
depreciation described in section
dividends is disallowed under the ACE
foreign tax credit entered on Schedule
168(g). However, for property (a)
rules).
J, line 5a; and minus any American
placed in service in a tax year that
4. For the AMT Form 1118,
Samoa economic development credit
began after 1989 and (b) described in
complete Schedule B, Part III,
from Form 5735 included on Schedule
sections 168(f)(1) through (4), use the
Summary of Separate Credits. The total
J, line 5b). Do not include any:
same depreciation claimed for the
foreign tax credit is the amount on line
Tax on accumulation distribution of
regular tax and enter it on line 2b(5).
6.
trusts from Form 4970,
Line 2b(3). Pre-1990 MACRS
5. Enter on Form 4626, line 11, the
smaller of:
property. For MACRS property
Recapture of investment credit
The amount on Form 4626, line
generally placed in service after 1986
(under section 49(b) or 50(a)) from
10, or
and in a tax year that began before
Form 4255,
The amount from the AMT Form
1990, figure depreciation by using the
Recapture of low-income housing
1118, Schedule B, Part III, line 6.
property’s AMT adjusted basis as of the
credit (under section 42(j) or (k)) from
close of the last tax year beginning
Form 8611, or
The corporation can use any
before 1990 and by using the straight
reasonable method, consistently
Recapture of any other credit.
line method over the remainder of the
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