Instructions For Form 4626 - Alternative Minimum Tax-Corporations

difference as a negative amount if the

section 613(a) and the limit based on

Intangible drilling costs (IDCs) from oil,

corporation had:

taxable income, with certain

gas, and geothermal properties are a

An AMT loss and a regular tax gain,

adjustments, under section 613A(d)(1).

preference to the extent excess IDCs

An AMT loss that exceeds the regular

Also, the depletion deduction for mines,

exceed 65% of the net income from the

tax loss, or

wells, and other natural deposits is

properties. Figure the preference for all

A regular tax gain that exceeds the

limited to the property's adjusted basis

geothermal deposits separately from the

AMT gain.

at the end of the year, as refigured for

preference for all oil and gas properties

the AMT, unless the corporation is an

that are not geothermal deposits.

independent producer or royalty owner

Tax Shelter Farm Activities That

Excess IDCs. Excess IDCs are the

claiming percentage depletion for oil

Are Passive Activities

excess of:

and gas wells. Figure this limit

The amount of IDCs the corporation

Refigure all gains and losses reported

separately for each property. When

paid or incurred for oil, gas, or

for the regular tax by taking into account

refiguring the property's adjusted basis,

geothermal properties that it elected to

the corporation's AMT adjustments and

take into account any AMT adjustments

expense for the regular tax (not

preferences and AMT prior year

the corporation made this year or in

including any IDCs paid or incurred for

unallowed losses.

previous years that affect basis (other

nonproductive wells) reduced by the

than the current year's depletion). Do

section 291(b)(1) adjustment for

Use the same rules as outlined

not include in the property's adjusted

integrated oil companies and increased

above for other passive activities, with

basis any unrecovered costs of

by any IDCs allowed to be amortized

the following modifications.

depreciable tangible property used to

under section 291(b)(2) over

AMT gains from tax shelter farm

exploit the deposits (for example,

The amount that would have been

activities that are passive activities may

machinery, tools, pipes, etc.).

allowed if the corporation had amortized

be used to offset AMT losses from other

For iron ore and coal (including

that amount over a 120-month period

passive activities.

lignite), apply the section 291

starting with the month the well was

AMT losses from tax shelter farm

adjustment before figuring this

placed in production or, alternatively,

activities that are passive activities may

preference.

had elected any method that is

not be used to offset AMT gains from

permissible in determining cost

other passive activities. These losses

Enter on line 2l the difference

depletion.

must be suspended and carried forward

between the regular tax and the AMT

indefinitely until the corporation has a

deduction. If the AMT deduction is more

Net income from oil, gas, and geo-

gain in a subsequent year from that

than the regular tax deduction, enter the

thermal properties. Net income is the

same activity or it disposes of the

difference as a negative amount.

gross income the corporation received

activity.

or accrued from all oil, gas, and

Line 2m. Tax-Exempt Interest

geothermal wells minus the deductions

Line 2k. Loss Limitations

Income From Specified Private

allocable to these properties (reduced

Refigure gains and losses reported for

Activity Bonds

by the excess IDCs). When refiguring

the regular tax from at-risk activities and

net income, use only income and

Enter on line 2m interest income from

the corporation's share of distributive

deductions allowed for the AMT.

specified private activity bonds, reduced

items from partnerships by taking into

by any deduction that would have been

Exception. The preference for IDCs

account the corporation's AMT

allowable if the interest were includible

from oil and gas wells does not apply to

adjustments and preferences. If the

in gross income for the regular tax.

corporations that are independent

corporation has recomputed losses that

producers (that is, not integrated oil

must be limited for the AMT by section

Generally, a specified private activity

companies as defined in section 291(b)

465 or section 704(d) or the corporation

bond is any private activity bond (as

(4)). However, this benefit may be

reported losses for the regular tax from

defined in section 141) issued after

limited. First, figure the IDC preference

at-risk activities or distributive shares of

August 7, 1986, on which the interest is

as if this exception did not apply. Then,

partnership losses that were limited by

not includible in gross income for the

for purposes of this exception, complete

those sections, figure the difference

regular tax. Specified private activity

a second Form 4626 through line 5,

between the loss limited for the AMT

bonds do not include:

including the IDC preference. If the

and the loss limited for the regular tax

Qualified 501(c)(3) bonds;

amount of the IDC preference exceeds

for each applicable at-risk activity or

Certain housing bonds issued after

40% of the amount figured for line 5,

distributive share of partnership loss.

July 30, 2008; and

enter the excess on line 2n (the benefit

“Loss limited” means the amount of loss

Bonds issued in 2009 and 2010.

of this exception is limited). If the

that is not allowable for the year

See section 57(a)(5)(C) for more

amount of the IDC preference is equal

because of the limitations above.

information and other exceptions.

to or less than 40% of the amount

Enter on line 2k the excess of the

Do not include interest on qualified

figured for line 5, do not include an

loss limited for the AMT over the loss

Gulf Opportunity Zone bonds or

amount on line 2n for oil and gas wells

limited for the regular tax. If the loss

qualified Midwestern disaster area

(the benefit of this exception is not

limited for the regular tax is more than

bonds.

limited).

the loss limited for the AMT, enter the

Line 2n. Intangible Drilling

Line 2o. Other Adjustments and

difference as a negative amount.

Costs

Preferences

Line 2l. Depletion

Do not make this adjustment for

Enter the net amount of any other

Refigure depletion using only income

costs for which the corporation

adjustments and preferences, including

and deductions allowed for the AMT

elected the optional 60-month

the following.

when refiguring the limit based on

CAUTION

write-off for the regular tax.

taxable income from the property under

-5-

Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2017 Page 5

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