Instructions For Form 4626 - Alternative Minimum Tax-Corporations

2017

Department of the Treasury

Internal Revenue Service

Instructions for Form 4626

Alternative Minimum Tax—Corporations

Exemption for Small

complete Form 4626 taking into account

Section references are to the Internal Revenue

Code unless otherwise noted.

the following modifications.

Corporations

The adjustments for depreciation and

Future Developments

A corporation is treated as a small

amortization of pollution control facilities

corporation exempt from the AMT for its

For the latest information about

apply only to property placed in service

current tax year if:

developments to Form 4626 and its

on or after the change date.

1. The current year is the

instructions, such as legislation enacted

The adjustment for mining exploration

after they were published, go to

corporation's first tax year in existence

and development costs applies only to

(regardless of its gross receipts for the

IRS.gov/Form4626.

amounts paid or incurred on or after the

year), or

change date.

What’s New

The adjustment for long-term

2. Both of the following apply.

contracts applies only to contracts

a. It was treated as a small

American Samoa economic develop-

entered into on or after the change date.

corporation exempt from the AMT for all

ment credit. The alternative minimum

When figuring the amount to enter on

prior tax years beginning after 1997.

tax (AMT) adjustments for the American

line 6, for any loss year beginning

Samoa economic development credit

b. Its average annual gross receipts

before the change date, use the

expired December 31, 2016. To find out

for all 3-tax-year periods (or portions

corporation's regular tax NOL for that

if legislation extended this provision and

thereof during which the corporation

year.

made it (and other expired provisions

was in existence) ending before its

Figure the limitation on line 4d only

affecting AMT) applicable for 2017, go

current tax year did not exceed $7.5

for prior tax years beginning on or after

to IRS.gov/Extenders.

million ($5 million for the corporation's

the change date.

first 3-tax-year period). See section

Enter zero on line 2c of the Adjusted

General Instructions

55(e).

Current Earnings (ACE) Worksheet.

When completing line 5 of the ACE

The following rules apply when

Purpose of Form

Worksheet, take into account only

figuring gross receipts under 2b above.

amounts from tax years beginning on or

Use Form 4626 to figure the AMT under

Gross receipts must be figured using

after the change date. Also, for line 8 of

the corporation's tax accounting method

section 55 for a corporation that is not

the ACE Worksheet, take into account

and include total sales (net of returns

exempt from the AMT.

only property placed in service on or

and allowances), amounts received for

Consolidated returns. For an

after the change date.

services, and income from investments

affiliated group filing a consolidated

and other sources. See Temporary

return under the rules of section 1501,

Note. No additional modification in

Regulations section 1.448-1T(f)(2)(iv)

AMT must be figured on a consolidated

figuring AMT is required for exceptions

for more details.

basis.

related to any item acquired in a

Gross receipts include those of any

corporate acquisition under section 381

predecessor of the corporation,

Who Must File

or to any substituted basis property, if

including non-corporate entities.

any of the AMT adjustment

Generally, file Form 4626 if any of the

For a short tax year, gross receipts

modifications listed earlier applied to the

following apply.

must be annualized by multiplying them

item or property while it was held by the

The corporation is not a “small

by 12 and dividing the result by the

transferor.

corporation” exempt from the AMT (as

number of months in the tax year.

explained below).

The gross receipts of all persons

Once the corporation loses its

The corporation's taxable income or

treated as a single employer under

small corporation status, it

(loss) before the net operating loss

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

cannot qualify for any

CAUTION

(NOL) deduction plus its adjustments

must be aggregated.

subsequent tax year.

and preferences total more than

Loss of small corporation status. If

$40,000 or, if smaller, its allowable

Credit for Prior Year

the corporation qualified as a small

exemption amount.

corporation exempt from the AMT for its

Minimum Tax

The corporation claims any general

previous tax year, but does not meet the

business credit, any qualified electric

A corporation may be able to take a

gross receipts test for its current tax

vehicle passive activity credit from prior

minimum tax credit against the regular

year, it loses its AMT exemption status.

years, or the credit for prior year

tax for AMT incurred in prior years. See

Special rules apply in figuring AMT for

minimum tax.

Form 8827, Credit for Prior Year

the tax year beginning on the “change

Minimum Tax—Corporations, for

date.” The change date is the first day of

details.

the corporation's tax year for which the

corporation ceased to be a small

corporation. Where this applies,

Jan 25, 2018

Cat. No. 64443L

Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2017

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