Taxes: Corporate AMT

Question 1

Taxes:
Corporate AMT
Small Corporation Exemption

Answer 1

Small Corporation Exemption
Gross Reciepts Test
- avg annual gross reciepts for pas 3 years do not exceed $7.5M
- new corporations, always zero in first year

Question 2

Taxes:
Corporate AMT
Preferences

Answer 2

Preferences

• tax exempt interest on private activity bonds
• excess of % depletion over adjusted basis
• excess intangible drilling and development costs

Question 3

Taxes:
Corporate AMT
Adjustments

Answer 3

Adjustments

• AMT applies only to 3,5,7,10 year property depreciated using the 200% double declining balance
• differences in gain/loss caused by different bases in assets
• difference in % completion over completed contract

Question 4

Taxes:
Corporate AMT
Adjusted Current Earnings

Answer 4

Adjusted Current Earnings
Adjustments:
\+ life insurance proceeds less expenses
\+ municipal interest income
\+ 70% DRD
\+/- installment method
\+ intangible drilling
\+ organizations expense amortization
No Adjustments:
- excess charitable donations
- net capital losses
- penalties
- disallowed travel & entertainment
- federal income taxes
80% & 100% DRD
*** if ACE>AMTI then 75% of difference