1045 Question

[JG EA]

Client who is subject in all profit years to AMT has an NOL that I am trying to carry back. But there is no AMT NOL to carry back.

In working with 2004, there is heavy depreciation and the tax actually increases (because of the 6251) in that year. For 2005 the tax decreases and all the NOL is used up.

My question is do they net the two figures for the tax relief? Or do they just say nothing was used in 2004 and just look at 2005?

[Davc]

Client who is subject in all profit years to AMT has an NOL that I am trying to carry back. But there is no AMT NOL to carry back.

I'd recheck that to be absolutely certain. Manually.

In working with 2004, there is heavy depreciation and the tax actually increases (because of the 6251) in that year.

I don't believe that's possible. The max tax in the carry back year if there is no AMT NOL would be the greater of the re figured regular tax or the original tentative AMT tax.

My question is do they net the two figures for the tax relief? Or do they just say nothing was used in 2004 and just look at 2005?

They look at both years.

[JG EA]

I'd recheck that to be absolutely certain. Manually.

I did do by hand but it seems correct because the depreciation is about the same as the loss - no AMT NOL in 2006. By the way this is previously started depreciation and I have nothing to 179 this year. But I will recheck and make sure I haven't overlooked something.

I don't believe that's possible. The max tax in the carry back year if there is no AMT NOL would be the greater of the re figured regular tax or the original tentative AMT tax.

I hope you're right, but wouldn't you refigure the AMT in 2004 with the NOL on 6251. Are you saying I don't have to do that? That would be wonderful!!!

They look at both years.

Thanks for this information I was really confused by this.

[Roland Slugg]

No AMT NOL?

But there is no AMT NOL to carry back.

This is almost surely not true. The ATNOLD is the same as the RNOLD, except that (1) the ATNOLD can't exceed 90% of the AMTI and (2) for the loss year all AMT adjustments and preferences must be taken into account. See IRC §56(d)

[JG EA]

Roland

This is almost surely not true. The ATNOLD is the same as the RNOLD, except that (1) the ATNOLD can't exceed 90% of the AMTI and (2) for the loss year all AMT adjustments and preferences must be taken into account. See IRC §56(d)

Then I really don't understand the line 27 instructions for 6251. Could you tell me where I went wrong on my AMT NOL Worksheet?
Taxable income for 2006 (30,000)
Sum of AMT adjustments and preferences from 6251 34,000
No capital gain or losses.
I translated this to mean no NOL AMT. I must be way off base here.