Instructions For Form 4626 - 2001 (Page 10 of 11) in pdf

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corporation is sold or otherwise

the treatment generally required under

The ACE gain is less than the AMT

disposed of. Enter on line 5c all

generally accepted accounting

gain,

•

amortization deductions for

principles (and as if this rule applied to

The ACE loss is more than the AMT

organizational expenditures that were

such contracts for all applicable tax

loss, or

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taken for the regular tax during the tax

years).

The corporation had an ACE loss

year.

and an AMT gain.

Subtract the ACE expense (if any)

Line 5d. The adjustments provided in

from the regular tax expense and enter

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

the result on line 7. If the ACE expense

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

is more than the regular tax expense,

Paperwork Reduction Act Notice.

Line 5e. For any installment sale in a

enter the result as a negative amount.

We ask for the information on this form

tax year that began after 1989, the

to carry out the Internal Revenue laws

Line 8—Depletion

corporation generally cannot use the

of the United States. You are required

installment method to figure ACE.

When figuring ACE, the allowance for

to give us the information. We need it to

However, it may use the installment

depletion for any property placed in

ensure that you are complying with

method for the applicable percentage

service in a tax year that began after

these laws and to allow us to figure and

(as determined under section 453A) of

1989 generally must be determined

collect the right amount of tax.

the gain from any installment sale to

under the cost depletion method of

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

You are not required to provide the

section 611.

information requested on a form that is

Subtract the installment sale income

Subtract the ACE expense (if any)

subject to the Paperwork Reduction Act

reported for AMT from the ACE income

from the AMT expense (used to figure

unless the form displays a valid OMB

from the sales and enter the result on

line 2m of Form 4626) and enter the

control number. Books or records

line 5e. If the ACE income from the

result on line 8 of the worksheet. If the

relating to a form or its instructions

sales is less than the AMT amount,

ACE expense is more than the AMT

must be retained as long as their

enter the difference as a negative

amount, enter the result as a negative

contents may become material in the

amount.

administration of any Internal Revenue

Line 6—Disallowance of Loss

law. Generally, tax returns and return

Exception. Independent oil and gas

on Exchange of Debt Pools

information are confidential, as required

producers and royalty owners that

by section 6103.

When figuring ACE, the corporation

figured their regular tax depletion

may not recognize any loss on the

deduction under section 613A(c) do not

The time needed to complete and

exchange of any pool of debt

have an adjustment for ACE purposes.

file this form will vary depending on

obligations for any other pool of debt

Line 9—Basis Adjustments in

individual circumstances. The

obligations having substantially the

estimated average time is:

Determining Gain or Loss From

same effective interest rates and

maturities. Add back (i.e., enter as a

Sale or Exchange of Pre-1994

Recordkeeping . . . . . . . 18 hr., 10 min.

positive adjustment) on line 6 any such

Property

Learning about the law

loss to the extent recognized for the

If, during the tax year, the corporation

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

regular tax.

disposed of property for which it is

Preparing and sending

Line 7—Acquisition Expenses

making (or previously made) any of the

the form to the IRS . . . . 13 hr., 03 min.

section 56(g) ACE adjustments,

of Life Insurance Companies

refigure the property’s adjusted basis

for Qualified Foreign Contracts

If you have comments concerning

for ACE. Then refigure the property’s

For ACE, acquisition expenses of life

the accuracy of these time estimates or

gain or loss.

insurance companies for qualified

suggestions for making this form

foreign contracts (as defined in section

Enter the difference between the

simpler, we would be happy to hear

807(e)(4) without regard to the

AMT gain or loss (used to figure line 2e

from you. See the instructions for the

treatment of reinsurance contract rules

of Form 4626) and the ACE gain or

tax return with which this form is filed.

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

loss. Enter the difference as a negative

capitalized and amortized by applying

amount if:

-10-

Instructions For Form 4626 - 2001 Page 10

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