Corporate Alternative Minimum Tax (AMT), vols. 1-2.

• Author: Kent, John P.Z.

Corporate Alternative Minimum Tax (AMT), Volumes I and II, CCH Tax Transactions Library, by Byrle M. Abbin, Stephen R. Corrick, Marc D. Levy, and Robert W. Hriszko.

The Tax Reform Act of 1986 replaced the corporate "addon" minimum tax with the Alternative Minimum Tax, a complex and often misunderstood tax based upon a parallel tax system.

The AMT was introduced to ensure that all corporations with economic profits paid some measure of corporate income taxes. In reality, the repeal of the investment tax credit had substantially achieved this objective. The AMT was driven more by perception than reality.

As a practical matter, the AMT has added enormous complexity to an already confusing tax structure and has become a substantial, unintended source of revenue for the Federal Government. The AMT represents bad economic and tax policy--it discourages capital formation, particularly in recessionary times when it is most needed. The AMT works against companies that seek to become more efficient and competitive by plowing profits back into corporate capital. The tax hampers the ability of Corporate America to carry out long-range planning activities, adding needless complexity and uncertainty.

With the ascendance of the separate AMT tax system, it behooves corporate taxpayers to better understand not only the mechanics but also the economic challenge to affected taxpayers on making business decisions, especially those that involve long term investment. Fortunately, a two-volume analysis by four Arthur Andersen partners makes both of these challenges easier to cope with. The volumes, which are part of the CCH Tax Transactions Library, go far beyond a black letter analysis. To be sure, the technical rules are thoroughly discussed. The strength of this work lies in numerous practical examples spread throughout, as well as major exhibits that are second nature to accountants. For those involved in international business, there are two detailed case studies showing a computerized print-out and analysis of the complexities of the AMT foreign tax credit limitation, including separate basket calculations. Examples of filled-out Forms 4626 for a domestic corporation over a two-year period, including use of the AMT credit...