OnPoint – Initial Guidance on Corporate Alternative Minimum Tax Released

The Inflation Reduction Act imposed a new corporate alternative minimum tax for taxable years beginning after 2022. Prior to issuance of proposed regulations, taxpayers may rely on the guidance set forth in Notice 2023-7 for application of the corporate AMT.

This OnPoint reviews key rules, definitions, and examples included in Treasury’s initial guidance on application of the new corporate AMT, which clarifies the following time-sensitive issues:

• Application of AMT to certain corporate transactions
• §56A(c)(13) depreciation adjustment rules for adjusted financial statement income (AFSI)
• Safe harbor method for determining applicable corporation status
• AFSI adjustments for certain credits
• Applicability of partnership-related AFSI adjustment

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