Instructions For Alternative Minimum Tax - Corporations Form 4626

•

Line 5d. The adjustments provided in

such contracts for all applicable tax

The ACE loss is more than the AMT

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

years).

loss.

•

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

The corporation had an ACE loss

Subtract the ACE expense (if any)

and an AMT gain.

Line 5e. For any installment sale in a

from the regular tax expense and enter

tax year that began after 1989, a

the result on line 7. If the ACE expense

corporation generally cannot use the

is more than the regular tax expense,

Paperwork Reduction Act Notice.

installment method to figure ACE.

enter the result as a negative amount.

We ask for the information on this form

However, it may use the installment

to carry out the Internal Revenue laws

Line 8. Depletion

method for the applicable percentage

of the United States. You are required

When figuring ACE, the allowance for

(as determined under section 453A) of

to give us the information. We need it to

depletion for any property placed in

the gain from any installment sale to

ensure that you are complying with

service in a tax year that began after

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

these laws and to allow us to figure and

1989 generally must be determined

Subtract the installment sale income

collect the right amount of tax.

under the cost depletion method.

reported for AMT from the ACE income

You are not required to provide the

Subtract the ACE expense (if any)

from the sales and enter the result on

information requested on a form that is

from the AMT expense (used to figure

line 5e. If the ACE income from the

subject to the Paperwork Reduction Act

line 2l of Form 4626) and enter the

sales is less than the AMT amount,

unless the form displays a valid OMB

result on line 8 of the worksheet. If the

enter the difference as a negative

control number. Books or records

ACE expense is more than the AMT

amount.

relating to a form or its instructions

amount, enter the result as a negative

must be retained as long as their

Line 6. Disallowance of Loss on

amount.

contents may become material in the

Exchange of Debt Pools

Exception. Independent oil and gas

administration of any Internal Revenue

When figuring ACE, a corporation may

producers and royalty owners that

law. Generally, tax returns and return

not recognize any loss on the exchange

figured their regular tax depletion

information are confidential, as required

of any pool of debt obligations for any

deduction under section 613A(c) do not

by section 6103.

other pool of debt obligations having

have an adjustment for ACE purposes.

The time needed to complete and

substantially the same effective interest

Line 9. Basis Adjustments in

file this form will vary depending on

rates and maturities. Add back (that is,

Determining Gain or Loss From

individual circumstances. The

enter as a positive adjustment) on line

estimated average time is:

Sale or Exchange of Pre-1994

6 any such loss to the extent

Property

recognized for the regular tax.

Recordkeeping . . . . . . . 17 hr., 13 min.

If, during the tax year, the corporation

Line 7. Acquisition Expenses of

Learning about the law

disposed of property for which it is

Life Insurance Companies for

or the form . . . . . . . . . . 12 hr., 36 min.

making (or previously made) any of the

Qualified Foreign Contracts

Preparing and sending

ACE adjustments, refigure the

the form to the IRS . . . . 13 hr., 27 min.

For ACE, acquisition expenses of life

property’s adjusted basis for ACE. Then

insurance companies for qualified

refigure the property’s gain or loss.

If you have comments concerning

foreign contracts (as defined in section

the accuracy of these time estimates or

Enter the difference between the

807(e)(4) without regard to the

suggestions for making this form

AMT gain or loss (used to figure line 2e

treatment of reinsurance contract rules

simpler, we would be happy to hear

of Form 4626) and the ACE gain or

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

from you. See the instructions for the

loss. Enter the difference as a negative

capitalized and amortized by applying

tax return with which this form is filed.

amount if any of the following apply.

the treatment generally required under

•

The ACE gain is less than the AMT

generally accepted accounting

gain.

principles (and as if this rule applied to

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Instructions For Alternative Minimum Tax - Corporations Form 4626 - 2004 Page 10

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