Instructions For Form 4626 - Alternative Minimum Tax-Corporations

Recordkeeping

Allocating Differently

Take this adjustment into account on

line 2k.

Treated Items Between

Certain items of income, deductions,

credits, etc., receive different tax

Certain Entities and Their

What Depreciation Must Be

treatment for the AMT than for the

Investors

regular tax. Therefore, the corporation

Refigured for the AMT?

For a regulated investment company, a

should keep adequate records to

Generally, the corporation must refigure

real estate investment trust, or a

support items refigured for the AMT.

depreciation for the AMT, including

common trust fund, see section 59(d)

Examples include:

depreciation allocable to inventory

for details on allocating certain

Tax forms used for regular tax

costs, for the following.

differently treated items between the

purposes that are completed a second

Property placed in service after 1998

entity and its investors.

time to refigure items of income,

depreciated for the regular tax using the

deductions, etc., for the AMT;

200% declining balance method

Optional Write-Off for

The computation of a carryback or

(generally 3-, 5-, 7-, or 10-year property

Certain Expenditures

carryforward to other tax years of

under the modified accelerated cost

certain deductions or credits (for

recovery system (MACRS)), except for

There is no AMT adjustment for the

example, NOL, capital loss, and foreign

certain qualified property eligible for the

following items if the corporation elects

tax credit) if the AMT amount is different

special depreciation allowance

to deduct them ratably over the period

from the regular tax amount;

(discussed later).

of time shown for the regular tax.

The computation of a carryforward of

Circulation expenditures (personal

Section 1250 property placed in

a passive loss or tax shelter farm activity

holding companies only)—3 years.

service after 1998 that is not

loss if the AMT amount is different from

Mining exploration and development

depreciated for the regular tax using the

the regular tax amount; and

straight line method.

costs—10 years.

A “running balance” of the excess of

Tangible property placed in service

Intangible drilling costs—60 months.

the corporation's total increases in

after 1986 and before 1999. (If the

alternative minimum taxable income

See section 59(e) for more details.

transitional election was made under

(AMTI) from prior year adjusted current

section 203(a)(1)(B) of the Tax Reform

Specific Instructions

earnings (ACE) adjustments over the

Act of 1986, this rule applies to property

total reductions in AMTI from prior year

placed in service after July 31, 1986.)

ACE adjustments (see the instructions

Line 1. Taxable Income or

for line 4d).

What Depreciation Is Not

(Loss) Before Net

Short Period Return

Refigured for the AMT?

Operating Loss Deduction

If the corporation is filing for a period of

Do not refigure depreciation for the AMT

Enter the corporation's taxable income

less than 12 months, AMTI must be

for the following.

or (loss) before the NOL deduction,

annualized and the tentative minimum

Residential rental property placed in

after the special deductions, and without

tax prorated based on the number of

service after 1998.

regard to any excess inclusion (for

months in the short period. Complete

Nonresidential real property with a

example, if filing Form 1120, subtract

Form 4626 as follows.

class life of 27.5 years or more

line 29b from line 28 of that form).

(generally, a building and its structural

1. Complete lines 1 through 6 in the

Line 2. Adjustments and

components) placed in service after

normal manner. Subtract line 6 from

1998 that is depreciated for the regular

line 5 to figure AMTI for the short period,

Preferences

tax using the straight line method.

but do not enter it on line 7.

Other section 1250 property placed in

To avoid duplication, do not

2. Multiply AMTI for the short period

service after 1998 that is depreciated for

include any AMT adjustment or

by 12. Divide the result by the number of

the regular tax using the straight line

preference taken into account

months in the short period. Enter this

CAUTION

method.

on line 2i, 2j, 2k, or 2o in the amounts to

result on line 7 and write “Sec. 443(d)

Property (other than section 1250

be entered on any other line of this form.

(1)” on the dotted line to the left of the

property) placed in service after 1998

entry space.

that is depreciated for the regular tax

Line 2a. Depreciation of

3. Complete lines 8 through 11.

using the 150% declining balance

Post-1986 Property

method or the straight line method.

4. Subtract line 11 from line 10.

What Adjustments Are Not

Property for which the corporation

Multiply the result by the number of

elected to use the alternative

Included as Depreciation

months in the short period and divide

depreciation system (ADS) for the

that result by 12. Enter the final result on

Adjustments?

regular tax.

line 12 and write “Sec. 443(d)(2)” on the

Do not make a depreciation adjustment

Any qualified property eligible for a

dotted line to the left of the entry space.

on line 2a for:

special depreciation allowance if the

5. Complete the rest of the form in

A tax shelter farm activity. Take this

depreciable basis of the property for the

the normal manner.

adjustment into account on line 2i.

AMT is the same as for the regular tax.

Passive activities. Take this

In addition, no adjustment is required for

adjustment into account on line 2j.

any depreciation figured on the

An activity for which the corporation is

remaining basis of the qualified

not at risk, or income or loss from a

property. However, if the corporation

partnership interest, or stock in an S

elected not to have any special

corporation if the basis limitations apply.

depreciation allowance apply, the

property may be subject to an AMT

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Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2017 Page 2

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