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



The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.