Instructions For Form 4626 - Alternative Minimum Tax-Corporations

adjustments exceed its total reductions

mortgage investment conduit (REMIC),

Increase or (reduction)

in AMTI from prior year ACE

figure the ATNOLD without regard to

in AMTI from ACE

adjustments (line 4d). The purpose of

any excess inclusion.

adjustment

line 4d is to provide a “running balance”

Year

Line 4e

The ATNOL for a loss year is the

of this limitation amount. As such, the

excess of the deductions allowed in

2013

corporation must keep adequate

2014

225,000

figuring AMTI (excluding the ATNOLD)

records (for example, a copy of Form

2015

(75,000)

over the income included in AMTI. This

4626 completed at least through line 5)

2016

(150,000)

excess is figured with the modifications

from year to year (even in years in which

2017

112,500

in section 172(d), taking into account

it does not owe any AMT).

the adjustments in sections 56 and 58

Any potential negative ACE

and preferences in section 57 (that is,

In 2013, Corporation C was not

adjustment that is not allowed as a

the section 172(d) modifications must

allowed to reduce its AMTI by any part

negative ACE adjustment in a tax year

be separately figured for the ATNOL).

of the potential negative ACE

because of the line 4d limitation cannot

adjustment because it had no increases

In applying the rules relating to the

be used to reduce a positive ACE

in AMTI from prior year ACE

determination of the amount of

adjustment in any other tax year.

adjustments.

carrybacks and carryforwards, use the

Combine lines 4d and 4e of the 2016

modification to those rules described in

Form 4626 and enter the result on

In 2014, Corporation C had to

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

line 4d of the 2017 form, but do not

increase its AMTI by the full amount of

enter less than zero.

The ATNOLD is generally limited to

its potential ACE adjustment. It was not

90% of AMTI determined without regard

allowed to use any part of its 2013

Example. Corporation C, a

to the ATNOLD and any domestic

unallowed potential negative ACE

calendar-year corporation, was

production activities deduction under

adjustment of $75,000 to reduce its

incorporated January 1, 2013. Its ACE

section 199. To figure AMTI without

2014 positive ACE adjustment of

and pre-adjustment AMTI for 2013

regard to the ATNOLD, use a second

$225,000.

through 2017 were as follows.

Form 4626 as a worksheet. Complete

In 2015, Corporation C was allowed

the second Form 4626 through line 5,

Pre-

to reduce its AMTI by the full amount of

but when figuring lines 2l and 2o, treat

adjustment

its potential negative ACE adjustment

line 6 as if it were zero. The amount

ACE

AMTI

because that amount is less than its

figured on line 5 of the second Form

Year

Line 4a

Line 3

line 4d limit of $225,000.

4626 is the corporation's AMTI

2013

$700,000

$800,000

determined without regard to the

2014

900,000

600,000

In 2016, Corporation C was allowed

ATNOLD. Add any domestic production

2015

400,000

500,000

to reduce its AMTI by only $150,000. Its

activities deduction to this tentative

2016

(100,000)

300,000

potential negative ACE adjustment of

total. The ATNOLD limitation is 90% of

2017

250,000

100,000

$300,000 was limited to its 2014

this amount.

increase in AMTI of $225,000 minus its

However, if an ATNOL carried back

2015 reduction in AMTI of $75,000.

Corporation C subtracts its

or carried forward to the tax year is

pre-adjustment AMTI from its ACE in

In 2017, Corporation C must increase

attributable to qualified disaster losses,

each of the years and then multiplies the

its AMTI by the full amount of its

qualified Gulf Opportunity Zone losses,

result by 75% to get the following

potential ACE adjustment. It cannot use

qualified recovery assistance losses,

potential ACE adjustments for 2013

any part of its 2016 unallowed potential

qualified disaster recovery assistance

through 2017.

negative ACE adjustment of $150,000

losses, or an applicable 2008 or 2009

to reduce its 2017 positive ACE

NOL for which the corporation elected a

ACE minus

Potential

adjustment of $112,500. Corporation C

3-, 4-, or 5-year carryback period, the

pre-adjustment

ACE

would complete the relevant portion of

ATNOLD for the tax year is limited to the

AMTI

adjustment

its 2017 Form 4626 as follows.

sum of:

Year

Line 4b

Line 4c

1. The smaller of:

2013

$(100,000)

$ (75,000)

Line

Amount

2014

300,000

225,000

a. The sum of the ATNOL

$250,000

2015

(100,000)

(75,000)

carrybacks and carryforwards to the tax

150,000

2016

(400,000)

(300,000)

year attributable to net operating losses

112,500

2017

150,000

112,500

other than qualified disaster losses,

-0-

qualified Gulf Opportunity Zone losses,

112,500

qualified recovery assistance losses,

Under these facts, Corporation C has

qualified disaster recovery assistance

the following increases or reductions in

losses, and applicable 2008 and 2009

Line 6. Alternative Tax Net

AMTI for 2013 through 2017.

NOLs for which the corporation made

Operating Loss Deduction

the election under section 172(b)(1)(H);

(ATNOLD)

b. 90% of AMTI for the tax year

The ATNOLD is the sum of the

(figured without regard to the ATNOLD,

alternative tax net operating loss

as discussed earlier, and the domestic

(ATNOL) carrybacks and carryforwards

production activities deduction under

to the tax year, subject to the limitation

section 199); plus

explained below. For a corporation that

held a residual interest in a real estate

2. The smaller of:

-7-

Instructions For Form 4626 - Alternative Minimum Tax-Corporations - 2017 Page 7

Related Articles

Related forms

Related Categories