Instructions For Form 4626 - Alternative Minimum Tax-Corporations

Subtract the installment sale income

service in a tax year that began after

reported for AMT from the ACE income

1989 generally must be determined

Paperwork Reduction Act Notice.

from the sales and enter the result on

under the cost depletion method of

We ask for the information on this form

line 5e. If the ACE income from the

section 611.

to carry out the Internal Revenue laws

sales is less than the AMT amount,

of the United States. You are required

enter the difference as a negative

Subtract the ACE expense (if any)

to give us the information. We need it to

amount.

from the AMT expense (used to figure

ensure that you are complying with

line 2m of Form 4626) and enter the

Line 6—Disallowance of Loss

these laws and to allow us to figure and

result on line 8 of the worksheet. If the

on Exchange of Debt Pools

collect the right amount of tax.

ACE expense is more than the AMT

When figuring ACE, the corporation

amount, enter the result as a negative

may not recognize any loss on the

You are not required to provide the

amount.

exchange of any pool of debt

information requested on a form that is

obligations for any other pool of debt

subject to the Paperwork Reduction Act

Exception. Independent oil and gas

obligations having substantially the

unless the form displays a valid OMB

producers and royalty owners that

same effective interest rates and

control number. Books or records

figured their regular tax depletion

maturities. Add back (i.e., enter as a

relating to a form or its instructions

deduction under section 613A(c) do not

positive adjustment) on line 6 any such

must be retained as long as their

have an adjustment for ACE purposes.

loss to the extent recognized for the

contents may become material in the

regular tax.

administration of any Internal Revenue

Line 9—Basis Adjustments in

Line 7—Acquisition Expenses

law. Generally, tax returns and return

Determining Gain or Loss From

information are confidential, as required

of Life Insurance Companies

Sale or Exchange of Pre-1994

by section 6103.

for Qualified Foreign Contracts

Property

For ACE, acquisition expenses of life

The time needed to complete and

If, during the tax year, the corporation

insurance companies for qualified

file this form will vary depending on

disposed of property for which it is

foreign contracts (as defined in section

individual circumstances. The

making (or previously made) any of the

807(e)(4) without regard to the

section 56(g) ACE adjustments,

estimated average time is:

treatment of reinsurance contract rules

refigure the property’s adjusted basis

of section 848(e)(5)) must be

for ACE. Then refigure the property’s

Recordkeeping . . . . . . . 18 hr., 10 min.

capitalized and amortized by applying

gain or loss.

Learning about the law

the treatment generally required under

or the form . . . . . . . . . . 12 hr., 12 min.

generally accepted accounting

Preparing and sending

principles (and as if this rule applied to

Enter the difference between the

the form to the IRS . . . . 13 hr., 03 min.

such contracts for all applicable tax

AMT gain or loss (used to figure line 2e

years).

of Form 4626) and the ACE gain or

loss. Enter the difference as a negative

Subtract the ACE expense (if any)

If you have comments concerning

amount if:

from the regular tax expense and enter

the accuracy of these time estimates or

•

the result on line 7. If the ACE expense

The ACE gain is less than the AMT

suggestions for making this form

is more than the regular tax expense,

gain,

simpler, we would be happy to hear

enter the result as a negative amount.

•

The ACE loss is more than the AMT

from you. See the instructions for the

Line 8—Depletion

loss, or

tax return with which this form is filed.

•

The corporation had an ACE loss

When figuring ACE, the allowance for

and an AMT gain.

depletion for any property placed in

-10-

Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2002 Page 10

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