Instructions For Form 4626 - 2003 printable pdf download

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Department of the Treasury

Internal Revenue Service

Instructions for Form 4626

Alternative Minimum Tax—Corporations

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

method and include total sales (net of

only amounts from tax years beginning

General Instructions

returns and allowances), amounts

on or after the change date. Also, for

received for services, and income from

line 8 of the ACE Worksheet, take into

Purpose of Form

investments and other sources. See

account only property placed in service

Temporary Regulations section

on or after the change date.

Use Form 4626 to figure the alternative

1.448-1T(f)(2)(iv) for more details.

See section 55(e)(3) for exceptions

minimum tax (AMT) under section 55

•

related to any item acquired in a

Gross receipts include those of any

for a corporation that is not exempt

predecessor of the corporation,

corporate acquisition or to any

from the AMT.

including non-corporate entities.

substituted basis property, if an AMT

•

Note: For an affiliated group filing a

provision applied to the item or property

For a short tax year, gross receipts

consolidated return under the rules of

while it was held by the transferor.

must be annualized by multiplying them

section 1501, AMT must be figured on

by 12 and dividing the result by the

Note: Once the corporation loses its

a consolidated basis.

number of months in the tax year.

small corporation status, it cannot

•

The gross receipts of all persons

qualify for any subsequent tax year.

Who Must File

treated as a single employer under

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

If the corporation is a “small

Credit for Prior Year

must be aggregated.

corporation” exempt from the AMT (as

explained below), do not file Form

Minimum Tax

Loss of small corporation status. If

4626. Otherwise, file Form 4626 if:

the corporation qualified as a small

•

A corporation may be able to take a

The corporation’s taxable income or

corporation exempt from the AMT for its

minimum tax credit against the regular

(loss) before the net operating loss

previous tax year, but does not meet

tax for AMT incurred in prior years. See

(NOL) deduction plus its adjustments

the gross receipts test for its tax year

Form 8827, Credit for Prior Year

and preferences total more than

beginning in 2003, it loses its AMT

Minimum Tax — Corporations, for

$40,000 or, if smaller, its allowable

exemption status. Special rules apply in

details.

exemption amount or

figuring AMT for the tax year beginning

•

The corporation claims any general

in 2003 and all later years based on the

Recordkeeping

business credit, the qualified electric

“change date.” The change date is the

vehicle credit, the nonconventional

first day of the corporation’s tax year

Certain items of income, deductions,

source fuel credit, or the credit for prior

beginning in 2003. Where this applies,

credits, etc., receive different tax

year minimum tax.

complete Form 4626 taking into

treatment for the AMT than for the

account the following modifications.

regular tax. Therefore, the corporation

Exemption for Small

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The adjustments for depreciation and

should keep adequate records to

Corporations

amortization of pollution control facilities

support items refigured for the AMT.

apply only to property placed in service

Examples include:

A corporation is treated as a small

•

on or after the change date.

Tax forms completed a second time

corporation exempt from the AMT for its

•

The adjustment for mining

to refigure the AMT;

tax year beginning in 2003 if that year

•

exploration and development costs

The computation of a carryback or

is the corporation’s first tax year in

applies only to amounts paid or

carryforward to other tax years of

existence (regardless of its gross

incurred on or after the change date.

certain deductions or credits (e.g., net

receipts for the year) or:

•

The adjustment for long-term

operating loss, capital loss, and foreign

1. It was treated as a small

contracts applies only to contracts

tax credit) if the AMT amount is

corporation exempt from the AMT for all

entered into on or after the change

different from the regular tax amount;

prior tax years beginning after 1997

•

date.

The computation of a carryforward of

and

•

When figuring the amount to enter on

a passive loss or tax shelter farm

2. Its average annual gross receipts

line 6, for any loss year beginning

activity loss if the AMT amount is

for the 3-tax-year period (or portion

before the change date, use the

different from the regular tax amount;

thereof during which the corporation

corporation’s regular tax NOL for that

and

was in existence) ending before its tax

•

year.

A “running balance” of the excess of

year beginning in 2003 did not exceed

•

Figure the limitation on line 4d only

the corporation’s total increases in

$7.5 million ($5 million if the corporation

for prior tax years beginning on or after

alternative minimum taxable income

had only 1 prior tax year).

the change date.

(AMTI) from prior year adjusted current

•

The following rules apply when

Enter zero on line 2c of the Adjusted

earnings (ACE) adjustments over the

figuring gross receipts under 2 above.

Current Earnings (ACE) Worksheet

total reductions in AMTI from prior year

•

Gross receipts must be figured using

on page 11. When completing line 5 of

ACE adjustments (see the instructions

the corporation’s tax accounting

the ACE Worksheet, take into account

for line 4d on page 6).

Cat. No. 64443L

Instructions For Form 4626 - 2003

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