Application to Businesses and Trusts
Small businesses are given an AMT exemption under three circumstances:
- All corporations are exempt in their first year of existence,
- The corporation will be exempt in their second year if gross receipts were less than $5,000,000 in the first year and
- The corporation will be exempt in the third year and years going forward, if average annual gross receipts for all prior three-year periods are less than $7,500,000.
Once the business fails the gross receipts test, it will be subjected to AMT going forward.
S-Corporations are pass-through entities, so they are not subjected to AMT at the entity level.
C-Corporations are typically larger companies and are subjected to the AMT (Form 4626) if taxable income for regular tax purposes, in combination with any preference and adjustment items, exceeds $40,000.
For the exam, you'll need to know that corporate owned life insurance will affect the AMT of a C-Corporation. If a key employee dies and life insurance is paid to the corporation, it can be taxed up to 15%.
If you're the beneficiary of a trust or estate, your share of AMTI will be shown on Schedule K-1 and will be your responsibility to include with your individual tax filing. The estate or trust will be responsible to pay tax on any remaining AMTI.
TaxesShould you worry about the AMT? Even if you're subject to it, there are exemptions and strategies for reducing your tax bill.
TaxesLearn how refundable AMT credits can help you save on taxes, AMT bills and more.
TaxesTo lower your tax bill, make sure that you're taking all the exemptions that apply to you.
TaxesUnderstand the difference between the federal estate tax and state-specific estate taxes. Learn about some of the worst states with estate taxes.
TaxesUnderstand the tax implications of running a small business in California, and learn which state taxes apply based on business type.
Financial AdvisorAs rules and exemptions tied to the estate tax change, so should your estate plan. Here's why updating it is so important.
Financial AdvisorA quick estate planning guide for high-net-worth individuals to help minimize taxes and costs, protect assets and plan for care.
TaxesLearn how small businesses are taxed in New York, and understand how tax rates vary based on whether the business is an S corporation, LLC or partnership.
Financial AdvisorMany institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
TaxesA corporate tax is a tax levied on the profits a corporation generates.