Instructions For Form 4626 - 2001 printable pdf download

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Department of the Treasury

Internal Revenue Service

Instructions for Form 4626

(Rev. April 2002)

Alternative Minimum Tax—Corporations

Section references are to the Internal Revenue Code unless otherwise noted.

and preferences total more than

first day of the corporation’s tax year

General Instructions

$40,000 or, if smaller, its allowable

beginning in 2001. Complete Form

exemption amount or

4626 taking into account the following

•

The corporation claims any general

modifications.

Changes To Note

•

business credit, the qualified electric

The adjustments for depreciation and

The Job Creation and Worker

vehicle credit, the nonconventional

amortization of pollution control facilities

Assistance Act of 2002 made the

source fuel credit, or the credit for prior

apply only to property placed in service

following changes that affect tax years

year minimum tax.

on or after the change date.

•

ending in 2001 or 2002. As a result of

The adjustment for mining

Exemption for Small

the changes, these 2001 Instructions

exploration and development costs

Corporations

for Form 4626 have been revised. No

applies only to amounts paid or

changes have been made to the 2001

incurred on or after the change date.

A corporation is treated as a small

•

Form 4626.

The adjustment for long-term

corporation exempt from the AMT for its

•

A special depreciation allowance

contracts applies only to contracts

tax year beginning in 2001 if that year

applies to qualified property placed in

entered into on or after the change

is the corporation’s first tax year in

service after September 10, 2001. No

date.

existence (regardless of its gross

•

alternative minimum tax (AMT)

When figuring the amount to enter on

receipts for the year) or:

adjustment is required for any property

line 6, for any loss year beginning

1. It was treated as a small

that qualifies for the special allowance.

before the change date, use the

corporation exempt from the AMT for all

See What Depreciation Is Not

corporation’s regular tax NOL for that

prior tax years beginning after 1997

Refigured for the AMT? on page 2.

year.

•

and

The deduction for an alternative tax

Figure the limitation on line 4d only

2. Its average annual gross receipts

net operating loss (ATNOL) carried

for prior tax years beginning on or after

for the 3-tax-year period (or portion

forward to a tax year ending in 2001 or

the change date.

thereof during which the corporation

•

2002, or arising in a tax year ending in

Enter zero on line 2c of the Adjusted

was in existence) ending before its tax

2001 or 2002 and carried back to a

Current Earnings (ACE) Worksheet

year beginning in 2001 did not exceed

prior tax year, is not limited to 90% of

on page 11. When completing line 5 of

$7.5 million ($5 million if the corporation

alternative minimum taxable income

the ACE Worksheet, take into account

had only 1 prior tax year).

(AMTI) (figured without regard to the

only amounts from tax years beginning

ATNOL deduction). See the instructions

on or after the change date. Also, for

The following rules apply when

for line 6 on page 7.

line 8 of the ACE Worksheet, take into

figuring gross receipts under 2 above.

•

account only property placed in service

Gross receipts are reduced by any

Note: If these changes affect the

on or after the change date.

returns and allowances made during

corporation’s AMT liability for its tax

See section 55(e)(3) for exceptions

the tax year.

year ending in 2001 or 2002, and the

•

related to any item acquired in a

Gross receipts include those of any

corporation has already filed its tax

corporate acquisition or to any

predecessor of the corporation.

return, it must file an amended return.

•

substituted basis property, if an AMT

For a short tax year, gross receipts

provision applied to the item or property

must be annualized by multiplying them

Purpose of Form

while it was held by the transferor.

by 12 and dividing the result by the

Use Form 4626 to figure the AMT

number of months in the tax year.

Note: Once the corporation loses its

under section 55 for a corporation that

•

The gross receipts of all persons

small corporation status, it cannot

is not exempt from the AMT.

treated as a single employer under

qualify for any subsequent tax year.

Note: For an affiliated group filing a

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

consolidated return under the rules of

must be aggregated.

Recordkeeping

section 1501, AMT must be figured on

Loss of small corporation status. If

a consolidated basis.

the corporation qualified as a small

Certain items of income, deductions,

corporation exempt from the AMT for its

credits, etc., receive different tax

Who Must File

previous tax year, but does not meet

treatment for the AMT than for the

If the corporation is not a “small

the gross receipts test for its tax year

regular tax. Therefore, the corporation

corporation” exempt from the AMT (as

beginning in 2001, it loses its AMT

should keep adequate records to

explained below), file Form 4626 if:

exemption status. Special rules apply in

support items refigured for the AMT.

•

The corporation’s taxable income or

figuring AMT for the tax year beginning

Examples include:

•

(loss) before the net operating loss

in 2001 and all later years based on the

Tax forms completed a second time

(NOL) deduction plus its adjustments

“change date.” The change date is the

to refigure the AMT;

Cat. No. 64443L

Instructions For Form 4626 - 2001

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