By default, the system uses the Reporting Currency Approach along with the AMT Automation functionality. The Reporting Currency approach expands the Alternative Minimum Tax (AMT) calculation.

•No need to activate the NOL Automation to automate the AMT.

•Consider and enter the AMT Net Operating Loss Carryover Balance.

•Review the AMT Estimator report with reporting currency in Filing Group reports.

•Compute the AMT using the unit's data in reporting currency. The system posts the AMT to the parent unit by converting the reporting currency to the parent unit's local currency.

 

Alternative Minimum Tax Estimator

Regular Tax Calculation

The system starts with Federal Tax Current from the Tax Provision report and then considers the impact of Foreign Tax Credits from either Cash Tax Adjustments or user-designated After Tax Temporary Difference activity to arrive at an Adjusted Cash Provision.

 

Alternative Tax Calculation

The system starts with Federal Taxable Income (Pre-NOL) from the Tax Provision Report and then adds back any entered AMT preference items. The result is offset up to 90% with the AMT NOL to arrive at Alternative Minimum Taxable Income that is rate effected by the AMT rate to arrive at the AMT (pre credits). It then considers any entered AMT Foreign Tax Credits to arrive at the Tentative Minimum Tax.

 

AMT Liability (Recapture)

The system compares the Tentative Minimum Tax with the Adjusted Cash Provision to determine if an AMT Liability exists or a potential Recapture of an AMT carryover from prior years.

•If the Tentative Minimum Tax is higher than the Adjusted Cash Provision, the system posts that amount to the Parent Unit in the Filing Group as activity in the After Tax Temporary Difference section with the adjustment code AMT_SYS.

•If the Tentative Minimum Tax is less than the Adjusted Cash Provision, the system looks to the beginning balance of the After Tax Temporary Difference with the adjustment code AMT_SYS in the filing group's parent unit beginning balance. To the extent there is a balance, it will recapture that amount in activity.