Instructions For Form 4626 - Alternative Minimum Tax-Corporations

adjustment for depreciation if it was

for the AMT using ADS (that is, the

Property Placed in Service Before

placed in service before 2016. It is not

straight line method over the facility's

1999

subject to an AMT adjustment for

class life). For facilities placed in service

depreciation if it was placed in service

after 1998, figure the amortization

IF the property is

THEN use the

. .

. . . . .

after 2015.

deduction for the AMT under MACRS

Any part of the cost of any property

using the straight line method. Figure

Section 1250 property. Straight line method

over 40 years.

that the corporation elected to expense

the AMT deduction using 100% of the

under section 179. The reduction to the

asset's amortizable basis. Do not

Tangible property

Straight line method

depreciable basis of section 179

reduce the corporation's AMT basis by

(other than section

over the property's

property by the amount of the section

1250 property)

AMT class life.

the 20% section 291 adjustment that

depreciated using the

179 expense deduction is the same for

applied for the regular tax.

straight line method for

the regular tax and the AMT.

the regular tax.

Enter the difference between the

Certain public utility property (if a

AMT deduction and the regular tax

normalization method of accounting is

Any other tangible

150% declining

deduction on line 2b. If the AMT

property.

balance method,

not used), motion picture films and

switching to the

deduction is more than the regular tax

video tape, sound recordings, and

straight line method

deduction, enter the difference as a

property that the corporation elects to

the first tax year it

negative amount.

exclude from MACRS by using a

gives a larger

depreciation method that is not based

Line 2c. Amortization of Mining

deduction, over the

on a term of years, such as the

property's AMT class

Exploration and Development

unit-of-production method.

life.

Costs

Any natural gas gathering line (as

How is the AMT class life

defined in section 168(i)(17)) placed in

Do not make this adjustment for

determined? For property placed in

service after April 11, 2005, the original

costs for which the corporation

service before 1999, the class life used

use of which begins with the corporation

elected the optional 10-year

for the AMT is not necessarily the same

after April 11, 2005, and which is not

CAUTION

write-off for the regular tax.

as the recovery period used for the

under self-construction or subject to a

regular tax.

binding contract in existence before

For the AMT, the regular tax deductions

April 12, 2005.

The class lives are listed in Rev.

under sections 616(a) and 617(a) are

Proc. 87-56, 1987-2 C.B. 674, Rev.

not allowed. Instead, capitalize these

Proc. 88-22, 1988-1 C.B. 785, and in

costs and amortize them ratably over a

How Is Depreciation Refigured for

Pub. 946, How To Depreciate Property.

10-year period beginning with the tax

the AMT?

year in which the corporation paid or

See Pub. 946 for tables that can

incurred them. The 10-year amortization

Property placed in service after

be used to figure AMT

TIP

applies to 100% of the mining

1998. Use the same convention and

depreciation. Rev. Proc. 89-15,

development and exploration costs paid

recovery period used for the regular tax.

1989-1 C.B. 816, and Pub. 946 have

or incurred during the tax year. Do not

Use the straight line method for section

special rules for short tax years and for

reduce the corporation's AMT basis by

1250 property. For property other than

property disposed of before the end of

the 30% section 291 adjustment that

section 1250 property, use the 150%

the recovery period.

applied for the regular tax.

declining balance method, switching to

the straight line method the first tax year

If the corporation had a loss on

it gives a larger deduction.

How Is the Line 2a Adjustment

property for which mining exploration

Figured?

Property placed in service before

and development costs have not been

1999. Refigure depreciation for the

Subtract the AMT deduction for

fully amortized for the AMT, the AMT

AMT using ADS, with the same

depreciation from the regular tax

deduction is the smaller of (a) the loss

convention used for the regular tax. See

deduction and enter the result on

allowable for the costs had they

the table below for the method and

line 2a. If the AMT deduction is more

remained capitalized, or (b) the

recovery period to use.

than the regular tax deduction, enter the

remaining costs to be amortized for the

difference as a negative amount.

AMT.

In addition to the AMT adjustment to

Subtract the AMT deduction from the

the deduction for depreciation, also

regular tax deduction. Enter the result

adjust the amount of depreciation that

on line 2c. If the AMT deduction is more

was capitalized, if any, to account for

than the regular tax deduction, enter the

the difference between the rules for the

difference as a negative amount.

regular tax and the AMT. Include on this

Line 2d. Amortization of

line the current year adjustment to

Circulation Expenditures

taxable income, if any, resulting from

the difference.

Complete this line only if the

Line 2b. Amortization of

corporation is a personal

holding company. Do not make

Certified Pollution Control

CAUTION

this adjustment for expenditures of a

Facilities

personal holding company for which the

For facilities placed in service before

company elected the optional 3-year

1999, figure the amortization deduction

write-off for the regular tax.

-3-

Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2017 Page 3

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