Instructions For Form 4626 - 2001 Page 7
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11Line 7—Alternative
In 1998, Corporation C had to
modification to those rules described in
increase its AMTI by the full amount of
section 56(d)(1)(B)(ii).
Minimum Taxable
its potential ACE adjustment. It was not
If, for any tax year that began before
allowed to use any part of its 1997
Income
1987, the corporation had minimum tax
unallowed potential negative ACE
that was deferred under section 56(b)
For a corporation that held a residual
adjustment of $75,000 to reduce its
(as in effect before the enactment of
interest in a REMIC and is not a thrift
1998 positive ACE adjustment of
the Tax Reform Act of 1986) and that
institution, line 7 may not be less than
$225,000.
deferred tax has not been paid, reduce
the total of the amounts shown on line
In 1999, Corporation C was allowed
the amount of ATNOL carryforwards
2c of Schedule(s) Q (Form 1066),
to reduce its AMTI by the full amount of
that may be carried forward to this year
Quarterly Notice to Residual Interest
its potential negative ACE adjustment
by the corporation’s preferences that
Holder of REMIC Taxable Income or
because that amount is less than its
caused the deferred add-on minimum
Net Loss Allocation, for the periods
line 4d limit of $225,000.
tax. (Section 701(f)(2)(B) of the Tax
included in the corporation’s tax year. If
Reform Act of 1986.)
In 2000, Corporation C was allowed
the total of the line 2c amounts is larger
to reduce its AMTI by only $150,000. Its
than the amount the corporation would
For tax years ending in 2001 or
potential negative ACE adjustment of
otherwise enter on line 7, enter that
2002, the ATNOLD is generally limited
$300,000 was limited to its 1998
total and write “Sch. Q” on the dotted
to AMTI (figured without regard to the
increase in AMTI of $225,000 minus its
line next to line 7.
ATNOLD). However, if an ATNOL is
1999 reduction in AMTI of $75,000.
carried back to the tax year from a tax
Line 9—Exemption
In 2001, Corporation C must
year ending after 2002, or for ATNOLs
increase its AMTI by the full amount of
carried back from the tax year to tax
Phase-Out Computation
its potential ACE adjustment. It may not
years ending before 2001, the ATNOLD
use any part of its 2000 unallowed
is limited to the sum of:
Line 9a. If this Form 4626 is for a
potential negative ACE adjustment of
1. The smaller of:
member of a controlled group of
$150,000 to reduce its 2001 positive
corporations, subtract $150,000 from
a. The sum of the ATNOL
ACE adjustment of $112,500.
the combined AMTI of all members of
carrybacks to the tax year from tax
Corporation C would complete the
the controlled group. Divide the result
years ending before 2001 or after 2002
relevant portion of its 2001 Form 4626
among the members of the group in the
and the ATNOL carryforwards to the tax
as follows.
same manner as the $40,000 tentative
year (unless the tax year ended in 2001
exemption is divided among the
Line
Amount
or 2002) or
members. Enter this member’s share
b. Ninety percent of AMTI for the tax
4a
$250,000
on line 9a. The tentative exemption
year (figured without regard to the
4b
150,000
must be divided equally among the
ATNOLD), plus
members, unless all members consent
4c
112,500
2. The smaller of:
to a different allocation. See section
4d
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a. The sum of the ATNOL
1561 for details.
carrybacks to the tax year from a tax
4e
112,500
Line 9c. If this Form 4626 is for a
year ending in 2001 or 2002 and the
ATNOL carryforwards to the tax year (if
member of a controlled group of
the tax year ended in 2001 or 2002), or
corporations, reduce the member’s
Line 6—Alternative Tax
share of the $40,000 tentative
b. AMTI for the tax year (figured
Net Operating Loss
without regard to the ATNOLD) reduced
exemption by the amount entered on
by the amount determined under 1
line 9b.
Deduction (ATNOLD)
above.
The ATNOLD is the sum of the ATNOL
Line 12—Alternative
To figure AMTI without regard to the
carrybacks and carryforwards to the tax
ATNOLD, use a second Form 4626 as
Minimum Tax Foreign
year, subject to the limitation explained
a worksheet. Complete the form
below. For a corporation that held a
Tax Credit (AMTFTC)
through line 5, but when figuring lines
residual interest in a real estate
2m and 2r, treat line 6 as if it were zero.
The AMTFTC is the foreign tax credit
mortgage investment conduit (REMIC),
The amount figured on line 5 of the
refigured as follows.
figure the ATNOLD without regard to
second Form 4626 is the corporation’s
any excess inclusion.
1. Complete a separate AMT Form
AMTI figured without regard to the
1118, Foreign Tax Credits —
For a loss year that began after
ATNOLD.
Corporations, for each separate
1986, the ATNOL is the excess of the
The amount of any ATNOL that is
limitation category specified at the top
deductions allowed in figuring AMTI
not deductible may be carried back or
of Form 1118. Include as a separate
(excluding the ATNOLD) over the
forward using the rules outlined in
limitation category dividends received
income included in AMTI. This excess
section 172(b). An election under
from a corporation that qualifies for the
is figured with the modifications in
section 172(b)(3) to forego the
possessions tax credit if the
section 172(d), taking into account the
carryback period for the regular tax also
dividends-received deduction for those
adjustments in sections 56 and 58 and
applies for the AMT.
dividends is disallowed under the ACE
preferences in section 57 (that is, the
rules.
section 172(d) modifications must be
The ATNOL carried back or forward
separately figured for the ATNOL).
may differ from the NOL (if any) that is
Note: In determining if any income is
In applying the rules relating to the
carried back or forward for the regular
“high-taxed” in applying the separate
determination of the amount of
tax. Keep adequate records for both the
limitation categories, use the AMT rate
carrybacks and carryforwards, use the
AMT and the regular tax.
(20%) instead of the regular tax rate.
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