Instructions For Form 4626 - 2003 (Page 7 of 11) in pdf

tax. Keep adequate records for both the

limitation categories, use the AMT rate

Line

Amount

AMT and the regular tax.

(20%) instead of the regular tax rate.

$250,000

2. For each separate AMT Form

150,000

Line 7—Alternative

1118, if the corporation previously

112,500

made or is making the simplified

-0-

Minimum Taxable

limitation election (discussed on page

112,500

Income

8), skip Schedule A and enter on

Schedule B, Part II, line 6, the same

For a corporation that held a residual

amount you entered on that line for the

Line 6—Alternative Tax

interest in a REMIC and is not a thrift

regular tax. Otherwise, complete

institution, line 7 may not be less than

Net Operating Loss

Schedule A using only income and

the total of the amounts shown on line

deductions that are allowed for the

Deduction (ATNOLD)

2c of Schedule(s) Q (Form 1066),

AMT and attributable to sources outside

Quarterly Notice to Residual Interest

The ATNOLD is the sum of the ATNOL

the United States.

Holder of REMIC Taxable Income or

carrybacks and carryforwards to the tax

3. For each separate AMT Form

Net Loss Allocation, for the periods

year, subject to the limitation explained

1118, complete Schedule B, Part II.

included in the corporation’s tax year. If

below. For a corporation that held a

Enter any AMTFTC carryover on

the total of the line 2c amounts is larger

residual interest in a real estate

Schedule B, Part II, line 4. Enter the

than the amount the corporation would

mortgage investment conduit (REMIC),

AMTI from Form 4626, line 7, on

otherwise enter on line 7, enter that

figure the ATNOLD without regard to

Schedule B, Part II, line 7a. Enter the

total and write “Sch. Q” on the dotted

any excess inclusion.

amount from Form 4626, line 10, on

line next to line 7.

Schedule B, Part II, line 9.

NOLs arising in tax years

Line 8—Exemption

beginning before August 6,

Note: When completing Schedule B,

1997, may be carried forward

treat as a tax paid to a foreign country

Phase-Out Computation

CAUTION

no more than 15 years.

75% of any withholding or income tax

Therefore, the corporation may not

paid to a U.S. possession on dividends

Line 8a. If this Form 4626 is for a

carry forward an NOL to this tax year

received from a corporation that

member of a controlled group of

from a loss year beginning before 1988.

qualifies for the possessions tax credit

corporations, subtract $150,000 from

(if the dividends-received deduction for

the combined AMTI of all members of

The ATNOL for a loss year is the

those dividends is disallowed under the

the controlled group. Divide the result

excess of the deductions allowed in

ACE rules).

among the members of the group in the

figuring AMTI (excluding the ATNOLD)

4. Complete Schedule B, Part III, of

same manner as the $40,000 tentative

over the income included in AMTI. This

the summary AMT Form 1118. The

exemption is divided among the

excess is figured with the modifications

total foreign tax credit on line 13 is

members. Enter this member’s share

in section 172(d), taking into account

limited to the tax on Form 4626, line 10,

on line 8a. The tentative exemption

the adjustments in sections 56 and 58

minus 10% of the tax that would be on

must be divided equally among the

and preferences in section 57 (that is,

that line if Form 4626 were refigured

members, unless all members consent

the section 172(d) modifications must

using zero on line 6 and without regard

to a different allocation. See section

be separately figured for the ATNOL).

to the exception for intangible drilling

1561 for details.

In applying the rules relating to the

costs (IDCs) under section 57(a)(2)(E).

Line 8c. If this Form 4626 is for a

determination of the amount of

member of a controlled group of

carrybacks and carryforwards, use the

If there is no entry on Form 4626,

corporations, reduce the member’s

line 6, and no IDCs (or the exception

modification to those rules described in

share of the $40,000 tentative

section 56(d)(1)(B)(ii).

does not apply to the corporation),

exemption by the amount entered on

enter on Form 4626, line 11, the

The ATNOLD is limited to 90% of

line 8b.

smaller of:

AMTI determined without regard to the

•

90% of Form 4626, line 10, or

ATNOLD. To figure AMTI without

Line 11—Alternative

•

The amount from the AMT Form

regard to the ATNOLD, use a second

1118, Schedule B, Part III, line 13.

Form 4626 as a worksheet. Complete

Minimum Tax Foreign

If Form 4626, line 6, has an amount

the second Form 4626 through line 5,

Tax Credit (AMTFTC)

or the exception for IDCs applies to the

but when figuring lines 2l and 2o, treat

corporation:

line 6 as if it were zero. The amount

The AMTFTC is the foreign tax credit

figured on line 5 of the second Form

1. Refigure what the tax on line 10

refigured as follows.

4626 is the corporation’s AMTI

would have been if line 6 were zero and

1. Complete a separate AMT Form

determined without regard to the

the exception did not apply,

1118, Foreign Tax Credit —

ATNOLD.

2. Multiply that amount by 10%,

Corporations, for each separate

3. Subtract the result from the tax

The amount of any ATNOL that is

limitation category specified at the top

on line 10, and

not deductible may be carried back or

of Form 1118. Include as a separate

4. Enter on Form 4626, line 11, the

forward using the rules outlined in

limitation category dividends received

smaller of that amount or the amount

section 172(b). An election under

from a corporation that qualifies for the

from the AMT Form 1118, Schedule B,

section 172(b)(3) to forego the

possessions tax credit if the

Part III, line 13.

carryback period for the regular tax also

dividends-received deduction for those

applies for the AMT.

dividends is disallowed under the ACE

The corporation may use any

rules.

The ATNOL carried back or forward

reasonable method, consistently

applied, to apportion the disallowed

may differ from the NOL (if any) that is

Note: In determining if any income is

carried back or forward for the regular

“high-taxed” in applying the separate

amount among the separate limitation

-7-

Instructions For Form 4626 - 2003 Page 7

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