Comments on the proposed regulations are still being accepted until January 16, 2025.
The U.S. Treasury Department and IRS today released a technical correction to proposed regulations relating to the corporate alternative minimum tax (CAMT), which were published in the Federal Register on September 13, 2024. Read TaxNewsFlash
The technical correction corrects various errors in the proposed regulations, including correcting proposed Treas. Reg. § 1.59-2(g)(2) to allow tax-exempt entities to take into account the adjustments provided in section 56A(c)(12) and proposed Treas. Reg. § 1.56A-14 (relating to adjusted financial statement income (AFSI) adjustments for tax-exempt entities) in applying the simplified method for determining applicable corporation status. Thus, in determining whether it is an applicable corporation under the simplified method, a tax-exempt organization may take into account only the AFSI (if any) (1) of unrelated trades or businesses, subject to the modifications in section 512(b) of the Code, or (2) derived from debt-financed property to the extent that income is treated as unrelated business taxable income.
Under the proposed regulations, corporations that satisfy the simplified method are generally not required to file Form 4626, Alternative Minimum Tax—Corporations. The requirements for satisfying the simplified method include having average annual AFSI of $500 million or less, with AFSI being determined without many of the adjustments set forth in section 56A(c) and (d). The technical correction makes clear that tax-exempt entities may take into account the specific adjustment applicable to them under section 56A(c)(12) for purposes of the simplified method.
The Treasury Department and IRS are still accepting comments on the proposed regulations, having extended the deadline from December 12, 2024, to January 16, 2025. Read TaxNewsFlash
For more information, contact your usual KPMG tax professional or one of the following Washington National Tax professionals:
Ruth Madrigal | ruthmadrigal@kpmg.com
Preston Quesenberry | pquesenberry@kpmg.com