Instructions For Form 4626 - Alternative Minimum Tax-Corporations

2011

Department of the Treasury

Internal Revenue Service

Instructions for Form 4626

Alternative Minimum Tax—Corporations

•

b. Its average annual gross receipts

Figure the limitation on line 4d only

Section references are to the Internal

for all 3-tax-year periods (or portions

for prior tax years beginning on or after

Revenue Code unless otherwise noted.

thereof during which the corporation

the change date.

•

was in existence) ending before its tax

Enter zero on line 2c of the Adjusted

What’s New

year beginning in 2011 did not exceed

Current Earnings (ACE) Worksheet.

$7.5 million ($5 million for the

When completing line 5 of the ACE

corporation’s first 3-tax-year period.

Worksheet, take into account only

Future developments. The IRS has

See section 55(e)).

amounts from tax years beginning on or

created a page on IRS.gov for

after the change date. Also, for line 8 of

information about Form 4626 and its

the ACE Worksheet, take into account

instructions, at

The following rules apply when

only property placed in service on or

Information about any future

figuring gross receipts under 2b above.

•

after the change date.

developments affecting Form 4626

Gross receipts must be figured using

(such as legislation enacted after we

the corporation’s tax accounting

Note. No additional modification in

release it) will be posted on that page.

method and include total sales (net of

figuring AMT is required for exceptions

returns and allowances), amounts

related to any item acquired in a

General Instructions

received for services, and income from

corporate acquisition under section 381

investments and other sources. See

or to any substituted basis property, if

Temporary Regulations section

any of the AMT adjustment

Purpose of Form

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

modifications listed earlier applied to

•

Gross receipts include those of any

the item or property while it was held by

Use Form 4626 to figure the alternative

predecessor of the corporation,

minimum tax (AMT) under section 55

the transferor.

including non-corporate entities.

for a corporation that is not exempt

•

For a short tax year, gross receipts

Once the corporation loses its

from the AMT.

small corporation status, it

must be annualized by multiplying them

Consolidated returns. For an

cannot qualify for any

by 12 and dividing the result by the

CAUTION

affiliated group filing a consolidated

subsequent tax year.

number of months in the tax year.

return under the rules of section 1501,

•

The gross receipts of all persons

AMT must be figured on a consolidated

Credit for Prior Year

treated as a single employer under

basis.

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

Minimum Tax

must be aggregated.

Who Must File

A corporation may be able to take a

Loss of small corporation status. If

Generally, file Form 4626 if any of the

minimum tax credit against the regular

the corporation qualified as a small

following apply.

tax for AMT incurred in prior years. See

corporation exempt from the AMT for its

•

The corporation is not a “small

Form 8827, Credit for Prior Year

previous tax year, but does not meet

corporation” exempt from the AMT (as

Minimum Tax — Corporations, for

the gross receipts test for its tax year

explained below).

details.

beginning in 2011, it loses its AMT

•

The corporation’s taxable income or

exemption status. Special rules apply in

Recordkeeping

(loss) before the net operating loss

figuring AMT for the tax year beginning

(NOL) deduction plus its adjustments

on the “change date.” The change date

Certain items of income, deductions,

and preferences total more than

is the first day of the corporation’s tax

credits, etc., receive different tax

$40,000 or, if smaller, its allowable

year for which the corporation ceased

treatment for the AMT than for the

exemption amount.

to be a small corporation. Where this

regular tax. Therefore, the corporation

•

The corporation claims any general

applies, complete Form 4626 taking

should keep adequate records to

business credit, any qualified electric

into account the following modifications.

support items refigured for the AMT.

vehicle passive activity credit from prior

•

The adjustments for depreciation and

Examples include:

years, or the credit for prior year

•

amortization of pollution control facilities

Tax forms used for regular tax

minimum tax.

apply only to property placed in service

purposes that are completed a second

Exemption for Small

on or after the change date.

time to refigure items of income,

•

The adjustment for mining

deductions, etc., for the AMT;

Corporations

•

exploration and development costs

The computation of a carryback or

A corporation is treated as a small

applies only to amounts paid or

carryforward to other tax years of

corporation exempt from the AMT for its

incurred on or after the change date.

certain deductions or credits (for

current tax year beginning in 2011 if:

•

The adjustment for long-term

example, net operating loss, capital

1. The current year is the

contracts applies only to contracts

loss, and foreign tax credit) if the AMT

corporation’s first tax year in existence

entered into on or after the change

amount is different from the regular tax

(regardless of its gross receipts for the

date.

amount;

•

year), or

When figuring the amount to enter on

The computation of a carryforward of

2. Both of the following apply.

line 6, for any loss year beginning

a passive loss or tax shelter farm

a. It was treated as a small

before the change date, use the

activity loss if the AMT amount is

corporation exempt from the AMT for all

corporation’s regular tax NOL for that

different from the regular tax amount;

prior tax years beginning after 1997.

year.

and

Nov 18, 2011

Cat. No. 64443L

Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2011

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