United States: Updated instructions highlight potential need to request CAMT information from partnerships
Many sovereign wealth funds and large public pensions plans have begun the complex task of analyzing their investment structures
Many SWFs and large public pensions plans have begun analyzing their investment structures
The IRS on 9 April 2024 updated the 2023 K-1 instructions for partners to indicate that partners (both corporations that are partners and upper-tier partnerships with indirect or direct corporate partners) will be required to request information needed to determine their corporate alternative minimum tax (CAMT) and to maintain such CAMT information (as well as the request itself) in the partner’s books and records.
While taxpayers await the release of the CAMT regulations, many sovereign wealth funds and large public pensions plans have begun the complex task of analyzing their investment structures to scope out the potential application and estimation of CAMT as part of the current 2023 U.S. tax compliance season.
This release is an important reminder that despite CAMT only directly affecting the tax liability of corporations, there are several CAMT provisions that affect partnerships and their partners. Net income or loss attributable to a partnership interest generally is taken into account for determining whether a corporation is subject to CAMT. If a corporate partner is subject to CAMT, it generally must include its distributive share of partnership adjusted financial statement income (ASFI) for purposes of determining its CAMT liability. Corporate partners may need to consider what information they need from partnerships to comply with CAMT taking into account their particular circumstances.
For more information, read the KPMG report: CAMT recent developments - changes to instructions for Schedule K-1.
To discuss the effects of these changes, contact any member of the KPMG Sovereign Wealth and Pension Funds Tax team, including:
Janice Russell | janicerussell@KPMG.com
Linda Ng | lng1@kpmg.com
Dan Winnick | danielwinnick@kpmg.com
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