Instructions For Schedule O (Form 1120) - 2011 (Page 6 of 9) in pdf

The maximum amount of tax that a

allocated proportionately among the

Report the AMT exemption amount

corporation owes under the 15% tax

component members which avail

and the phaseout of the exemption

bracket is $7,500. The maximum

themselves of the next higher tax

amount in Part IV, columns (c) and

amount of tax that a corporation owes

bracket, and so on, until the entire

(d), respectively.

under the 25% tax bracket is $6,250.

amount of the additional taxes has

The maximum amount of tax that a

been fully apportioned among the

Specific Instructions

corporation owes under the 34% tax

component members. For example,

bracket is $3,374,500.

the first $9,500 of additional tax

liability of a controlled group is

Step 2. The percentage calculated

Identifying Information

apportioned entirely to the component

under step 1 is multiplied by the total

members that availed themselves of

Component member filing

tax-benefit amount received by all the

the benefit of the 15% tax bracket.

Schedule O. On page 1, enter the

members of the group from their use

of this tax bracket. This computed

name and employer identification

Allocation of AMT Exemption

amount equals the portion of the

number (EIN) of the component

Amount and the Reduction

group’s tax-benefit amount received

member filing this Schedule O.

of the AMT Exemption

by a particular member from using its

In Part II, column (a), line 1, enter

portion of this tax bracket.

Amount

the component member’s name and

Step 3. The amount determined

EIN. In column (b), enter the

In determining the AMT liability of a

member’s tax year ending date

under step 2 is divided by the total

corporation, the amount of AMTI to

(Yr-Mo). In Parts III and IV, column

tax-benefit amount, received by all

which the AMT rate is applied is

(a), line 1, enter only the name of the

the component members of the group

reduced by the $40,000 AMT

from using all the tax brackets to

component member.

exemption amount. For a controlled

which any component member’s

Other component members of the

group of corporations, the AMT

income was subject.

controlled group. For Parts II, III,

exemption amount must be

and IV, column (a), lines 2 through

apportioned among the component

Step 4. The percentage calculated

10, and Part II, column (b), enter the

members of the group. That amount

under step 3 is multiplied by the

corresponding information for each of

must be divided equally among the

amount of the group’s additional

the other component members of the

component members for those tax

taxes. The amount determined under

controlled group, in the same manner

years, which are subject to the same

this step 4 equals the amount of the

as the member filing this Schedule O.

December 31 testing date, except

additional taxes apportioned to such

If more space is needed, attach

where all those members have

component member for that tax

additional sheets.

adopted an apportionment plan

bracket.

providing for an unequal

Consolidated groups. If several

Step 5. If a component member is

apportionment of the AMT exemption

component members are also

liable for regular tax (not including the

amount. If so, the component

members of a single consolidated

additional taxes imposed by section

members of the group will apportion

group, then with respect to those

11(b)(1)) under more than one tax

the AMT exemption amount

members, in Parts II, III, and IV,

bracket, that member must calculate

according to the terms of that

column (a), and Part II, column (b),

the amount of additional taxes with

apportionment plan.

enter only the information of the

respect to each tax bracket to be

common parent of the consolidated

apportioned to that member.

The $40,000 AMT exemption

group.

amount shall be reduced, but not

Accordingly, steps 1 through 4

below zero, as the amount of AMTI

If any component members of

must be applied for each tax bracket

increases. For a controlled group of

the controlled group are also

applicable to that member. The sum

TIP

corporations, to compute the amount

members of a consolidated

of all the amounts of additional taxes

of this reduction to the AMT

group, the parent of such

apportioned to a component member

exemption amount, the AMTI of all

consolidated group should file only

from each tax bracket, to which that

component members must be

one Schedule O on behalf of all such

member is subject, is the total

combined in order to compute the

members of the controlled group.

amount of the additional taxes

amount of that reduction. This

Such form must contain the required

apportioned to that member.

exemption amount completely phases

information for each such member.

The FIFO method. Under a

out when a controlled group’s

See Regulations section

first-in-first-out (FIFO) method for

combined AMTI is at least $310,000.

1.1561-3(a)(2).

allocating the additional taxes among

This reduction to the AMT exemption

the component members of the

Part I. Apportionment

amount will effectively be allocated to

controlled group, the first dollars of

each of the component members to

Plan Information

additional taxes imposed by section

which the exemption amount was

11(b)(1) owed by the component

apportioned and will effectively be

Line 1. Type of controlled group.

members of a controlled group are to

apportioned to the component

A component member of a controlled

be allocated proportionately to those

members in the same manner as is

group must check the applicable box

members availing themselves of the

the exemption amount.

to indicate the type of group. For

lowest tax bracket (the first tax

more information, see Types of

bracket), up to the amount of the

Only the positive AMTI of those

Controlled Groups, earlier.

tax-benefit received by those

component members of a controlled

members from having availed

group are combined for purposes of

For a brother-sister controlled

themselves of that tax-bracket

determining those members’

group, check box 1b whether that

amount. Any remaining amount of

reduction of the AMT exemption

group is a brother-sister group for

unallocated additional taxes is then

amount.

purposes of applying only the 50%

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Instructions For Schedule O (Form 1120) - 2011 Page 6

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