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California C Corp AMT Exemption

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    California C Corp AMT Exemption

    Hello,

    I am preparing a California C Corp return, the system calculates AMT tax for both federal and CA. Regular taxable income is 0 after NOL carryforward. After looking up a tax book, I found that small businesses are exempt from federal AMT, so I checked a box, the federal AMT tax is gone, but the state AMT is still there. I continued to look up the tax book, trying to find out if the state AMT should be removed as well but I haven't found anything.

    Are california C corporations exempt from AMT tax?

    Thanks.

    #2
    Originally posted by Maria
    Hello,

    I am preparing a California C Corp return, the system calculates AMT tax for both federal and CA. Regular taxable income is 0 after NOL carryforward. After looking up a tax book, I found that small businesses are exempt from federal AMT, so I checked a box, the federal AMT tax is gone, but the state AMT is still there. I continued to look up the tax book, trying to find out if the state AMT should be removed as well but I haven't found anything.

    Are california C corporations exempt from AMT tax?

    Thanks.
    California does not follow the federal exemption from AMT for small businesses. From the CA corporation instructions:

    "California does not conform to the following federal AMT provisions:
    • The elimination of AMT for small businesses."

    Also,

    "Who Must File. Corporations should file Schedule P (100) if the sum of: AMT
    adjustments, preference items, loss denials, other items as specified under IRC Section 59, and state net income exceeds $40,000."

    You can find the CA instructions by going to "Links" above, then "State Links," then "California."

    Comment


      #3
      I have the same answer from FTB

      Thanks so much for your help. Actually today I called the California Franchise Tax Board hotline and a lady told me that California does not have the same rule on this. Previously I searched through the state input screen (we use Prosystems) but did not find a box to check.

      A question like this should be answered by a person who is more experienced in our office. However, our office is so busy, everybody is busy doing their own stuff. No one has even 5 minutes to talk. I have been trying to solve my own problem, regardless the degree of complexity.

      Again, thanks a lot for your input.

      Comment


        #4
        "A question like this should be answered by a person who is more experienced in our office. However, our office is so busy, everybody is busy doing their own stuff. No one has even 5 minutes to talk. I have been trying to solve my own problem, regardless the degree of complexity."

        That's the exact reason this message board is so valuable. It's like having a bunch of tax professionals in the back room to bounce questions off. As long as you don't take the wrong side of the "Casual Partnership; Schedule C or Form 1065?" issue, everything will be fine.

        Comment

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