Instructions For Form 4626 - Alternative Minimum Tax-Corporations

Line 9—Exemption

increase in AMTI of $225,000 minus its

beginning in 2002), the ATNOLD for the

2000 reduction in AMTI of $75,000.

tax year is limited to the sum of:

Phase-Out Computation

1. The smaller of:

In 2002, Corporation C must

increase its AMTI by the full amount of

a. The sum of the ATNOL

Line 9a. If this Form 4626 is for a

its potential ACE adjustment. It may not

member of a controlled group of

carrybacks to the tax year from tax

use any part of its 2001 unallowed

years ending before 2001 or after 2002

corporations, subtract $150,000 from

potential negative ACE adjustment of

and, if the tax year does not end in

the combined AMTI of all members of

$150,000 to reduce its 2002 positive

the controlled group. Divide the result

2001 or 2002, the ATNOL

ACE adjustment of $112,500.

carryforwards to the tax year or

among the members of the group in the

Corporation C would complete the

same manner as the $40,000 tentative

b. Ninety percent of AMTI for the tax

relevant portion of its 2002 Form 4626

exemption is divided among the

year (figured without regard to the

as follows.

members. Enter this member’s share

ATNOLD), plus

on line 9a. The tentative exemption

2. The smaller of:

Line

Amount

must be divided equally among the

a. The sum of the ATNOL

$250,000

members, unless all members consent

carrybacks to the tax year from a tax

to a different allocation. See section

150,000

year ending in 2001 or 2002 and, if the

1561 for details.

tax year ends in 2001 or 2002, the

112,500

ATNOL carryforwards to the tax year,

Line 9c. If this Form 4626 is for a

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member of a controlled group of

112,500

b. AMTI for the tax year (figured

corporations, reduce the member’s

without regard to the ATNOLD) reduced

share of the $40,000 tentative

by the amount determined under 1

exemption by the amount entered on

Line 6—Alternative Tax

above.

line 9b.

Net Operating Loss

To figure AMTI without regard to the

Line 12—Alternative

ATNOLD, use a second Form 4626 as

Deduction (ATNOLD)

a worksheet. Complete the form

Minimum Tax Foreign

The ATNOLD is the sum of the ATNOL

through line 5, but when figuring lines

carrybacks and carryforwards to the tax

2m and 2r, treat line 6 as if it were zero.

Tax Credit (AMTFTC)

year, subject to the limitation explained

The amount figured on line 5 of the

The AMTFTC is the foreign tax credit

below. For a corporation that held a

second Form 4626 is the corporation’s

refigured as follows.

residual interest in a real estate

AMTI figured without regard to the

mortgage investment conduit (REMIC),

1. Complete a separate AMT Form

ATNOLD.

figure the ATNOLD without regard to

1118, Foreign Tax Credit —

any excess inclusion.

The amount of any ATNOL that is

Corporation, for each separate

not deductible may be carried back or

limitation category specified at the top

NOLs arising in tax year

forward using the rules outlined in

of Form 1118. Include as a separate

beginning before August 6,

section 172(b). An election under

limitation category dividends received

1997, may be carried forward no

CAUTION

section 172(b)(3) to forego the

from a corporation that qualifies for the

more than 15 years. Therefore, the

carryback period for the regular tax also

possessions tax credit if the

corporation may not carry forward an

applies for the AMT.

dividends-received deduction for those

NOL to this tax year from a loss year

dividends is disallowed under the ACE

beginning before 1987.

The ATNOL carried back or forward

rules.

may differ from the NOL (if any) that is

The ATNOL for a loss year is the

Note: In determining if any income is

carried back or forward for the regular

excess of the deductions allowed in

“high-taxed” in applying the separate

tax. Keep adequate records for both the

figuring AMTI (excluding the ATNOLD)

limitation categories, use the AMT rate

AMT and the regular tax.

over the income included in AMTI. This

(20%) instead of the regular tax rate.

excess is figured with the modifications

2. If the corporation previously

in section 172(d), taking into account

Line 7—Alternative

made or is making the simplified

the adjustments in sections 56 and 58

Minimum Taxable

limitation election (discussed on page

and preferences in section 57 (that is,

8), skip Schedule A of the AMT Form

the section 172(d) modifications must

Income

1118 and enter on Schedule B, Part II,

be separately figured for the ATNOL).

line 6, the same amount you entered on

For a corporation that held a residual

In applying the rules relating to the

that line for the regular tax. Otherwise,

interest in a REMIC and is not a thrift

determination of the amount of

complete Schedule A using only

institution, line 7 may not be less than

carrybacks and carryforwards, use the

income and deductions that are allowed

the total of the amounts shown on line

modification to those rules described in

for the AMT and attributable to sources

2c of Schedule(s) Q (Form 1066),

section 56(d)(1)(B)(ii).

outside the United States.

Quarterly Notice to Residual Interest

3. Complete Schedule B, Part II, of

For tax years ending in 2002, the

Holder of REMIC Taxable Income or

ATNOLD is generally limited to AMTI

Net Loss Allocation, for the periods

the AMT Form 1118. Enter any

(figured without regard to the

included in the corporation’s tax year. If

AMTFTC carryover on Schedule B, Part

II, line 4, of the AMT Form 1118. Enter

ATNOLD). If an ATNOL is carried back

the total of the line 2c amounts is larger

to the tax year from a tax year ending

than the amount the corporation would

the AMTI from Form 4626, line 7, on

after 2002, however, and for the tax

otherwise enter on line 7, enter that

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

amount from Form 4626, line 11, on

years ending after 2002 (and for

total and write “Sch. Q” on the dotted

Schedule B, Part II, line 9.

ATNOLs carried back from a tax year

line next to line 7.

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Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2002 Page 7

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