AMT Reporting Currency Approach

The system parameter defaults new datasets to the Reporting Currency Approach. The Reporting Currency approach expands the Alternative Minimum Tax (AMT) calculation:

•NOL Automation does not need to be activated to automate the AMT.
•There is the ability to enter and consider the AMT Net Operating Loss Carryover Balance.
•The AMT Estimator report displays in Reporting Currency under the Filing Group reports.
•The AMT is computed using the unit's data in reporting currency. The AMT is posted to the parent unit by converting from reporting currency to the parent unit's local currency.
•The AMT Liability or AMT Recapture is automatically posted to the After Tax Temporary Difference with the adjustment code AMT_SYS.

Note: The Reporting Currency approach can be overridden on each dataset with the dataset parameter name USE_OLD_AMTESTIMATOR and the parameter value 1.

 

Alternative Minimum Tax Estimator

Regular Tax Calculation

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

Starts with Federal Taxable Income (Pre-NOL) from the Tax Provision Report and then adds back any entered AMT preference items. The result is then 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 Tentative Minimum Tax is compared with the Adjusted Cash Provision to determine if there is an AMT Liability or 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.