Instructions For Form 4626 - Alternative Minimum Tax-Corporations

holding company, the AMT amount),

foreign contracts (as defined in section

loss. Enter the difference as a negative

enter the result as a negative amount.

amount if any of the following apply.

807(e)(4) without regard to the

•

The ACE gain is less than the AMT

treatment of reinsurance contract rules

Do not make this adjustment for

gain.

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

expenditures for which the

•

The ACE loss is more than the AMT

capitalized and amortized by applying

corporation elected the optional

CAUTION

loss.

the treatment generally required under

3-year write-off under section 59(e) for

•

The corporation had an ACE loss

generally accepted accounting

the regular tax.

and an AMT gain.

principles (and as if this rule applied to

Line 5c. When figuring ACE, the

such contracts for all applicable tax

amortization provisions of section 248

Paperwork Reduction Act Notice.

years).

do not apply. Therefore, charge all

We ask for the information on this form

organizational expenditures to a capital

to carry out the Internal Revenue laws

account and do not take them into

of the United States. You are required

Subtract the ACE expense (if any)

account when figuring ACE until the

to give us the information. We need it to

from the regular tax expense and enter

corporation is sold or otherwise

ensure that you are complying with

the result on line 7. If the ACE expense

disposed of. Enter on line 5c all

these laws and to allow us to figure and

is more than the regular tax expense,

amortization deductions for

collect the right amount of tax.

enter the result as a negative amount.

organizational expenditures that were

You are not required to provide the

taken for the regular tax during the tax

information requested on a form that is

Line 8. Depletion

year.

subject to the Paperwork Reduction Act

Line 5d. The adjustments provided in

When figuring ACE, the allowance for

unless the form displays a valid OMB

section 312(n)(4) apply in figuring ACE.

control number. Books or records

depletion for any property placed in

See Regulations section 1.56(g)-1(f)(3).

relating to a form or its instructions

service in a tax year that began after

must be retained as long as their

Line 5e. For any installment sale in a

1989 generally must be determined

contents may become material in the

tax year that began after 1989, a

under the cost depletion method.

administration of any Internal Revenue

corporation generally cannot use the

law. Generally, tax returns and return

installment method to figure ACE.

Subtract the ACE expense (if any)

information are confidential, as required

However, it may use the installment

from the AMT expense (used to figure

by section 6103.

method for the applicable percentage

line 2l of Form 4626) and enter the

(as determined under section 453A) of

The time needed to complete and

result on line 8 of the worksheet. If the

the gain from any installment sale to

file this form will vary depending on

ACE expense is more than the AMT

which section 453A(a)(1) applies.

individual circumstances. The

amount, enter the result as a negative

estimated average time is:

Subtract the installment sale income

amount.

reported for AMT from the ACE income

Recordkeeping . . . . . . . 18 hr., 39 min.

from the sales and enter the result on

Exception. Independent oil and gas

Learning about the law

line 5e. If the ACE income from the

producers and royalty owners that

or the form . . . . . . . . . . 12 hr., 00 min.

sales is less than the AMT amount,

figured their regular tax depletion

Preparing and sending

enter the difference as a negative

deduction under section 613A(c) do not

the form to the IRS . . . . 12 hr., 51 min.

amount.

have an adjustment for ACE purposes.

Line 6. Disallowance of Loss on

If you have comments concerning

Exchange of Debt Pools

the accuracy of these time estimates or

Line 9. Basis Adjustments in

suggestions for making this form

When figuring ACE, a corporation may

Determining Gain or Loss From

simpler, we would be happy to hear

not recognize any loss on the exchange

Sale or Exchange of Pre-1994

from you. See the instructions for the

of any pool of debt obligations for any

tax return with which this form is filed.

Property

other pool of debt obligations having

substantially the same effective interest

If, during the tax year, the corporation

rates and maturities. Add back (that is,

disposed of property for which it is

enter as a positive adjustment) on line

making (or previously made) any of the

6 any such loss to the extent

ACE adjustments, refigure the

recognized for the regular tax.

property’s adjusted basis for ACE. Then

Line 7. Acquisition Expenses of

refigure the property’s gain or loss.

Life Insurance Companies for

Qualified Foreign Contracts

Enter the difference between the

AMT gain or loss (used to figure line 2e

For ACE, acquisition expenses of life

of Form 4626) and the ACE gain or

insurance companies for qualified

-10-

Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2011 Page 10

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