The AMT adjustment for current earnings comes into focus with new Proposed Regs
Article Abstract:
The alternative minimum taxable income (AMTI) for corporations will increase to 75% of the excess of adjusted current earnings (ACE) over the AMTI before adjustment for taxable years after 1989. The IRS has issued Proposed Regulation 1.56(g)-1, which requires corporations subject to the environmental tax or the AMT under Section 55 to calculate the ACE adjustment to AMTI. Corporations exempt from the Proposed Regulation are S corporations, regulated investment companies, real estate investment trusts, and real estate mortgage investment conduits. Corporations must follow the rules for calculating regular taxable income when calculating ACE, unless otherwise specified. The installment method generally should not be used when determining ACE. Corporations are not allowed to use the amortization deductions for circulation expenditures stated in Section 173 of the Internal Revenue Code.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
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Compensation planning in the family corporation
Article Abstract:
Corporate tax rates have exceeded personal tax rates for the first time in history since the repeal of the General Utilities doctrine. For closely held family corporations, this means that the disbursement of a deductible corporate payment to employee-owners can generate net tax savings. The purpose of compensation planning in closely-held, family corporations is to create an ideal mix of benefits and compensation that maximizes corporate deductions while minimizing the income disbursed to employee-owners. Distributions of earnings as deductible compensation by closely-held, family corporations will be scrutinized by the IRS, which will seek to determine whether the compensation is reasonable. Reasonable compensation are payments made for the performance of services, and the amount of the payment must be reasonable according to circumstances.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1991
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New Regs show how to make book income adjustment for corporate minimum tax
Article Abstract:
Proposed and temporary IRS regulations concerning the payment of estimated tax by corporations and book adjustments of corporate alternative minimum taxes are discussed. Book income adjustment is one of the adjustments that increases alternative minimum taxable income. The book income adjustment equals half of the amount that adjusted net book income exceeds alternative minimum taxable income for a taxable year.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1987
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