Sec. 10101. Corporate alternative minimum tax
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Paragraph
(2)of section 55(b) is amended to read as follows: In the case of an applicable corporation, the tentative minimum tax for the taxable year shall be the excess of— 15 percent of the adjusted financial statement income for the taxable year (as determined under section 56A), over the corporate AMT foreign tax credit for the taxable year. In the case of any corporation which is not an applicable corporation, the tentative minimum tax for the taxable year shall be zero. . Section 59 is amended by adding at the end the following new subsection: For purposes of this part— The term applicable corporation means, with respect to any taxable year, any corporation (other than an S corporation, a regulated investment company, or a real estate investment trust) which meets the average annual adjusted financial statement income test of subparagraph
(B)for one or more taxable years which— are prior to such taxable year, and end after December 31, 2021. For purposes of this subsection— a corporation meets the average annual adjusted financial statement income test for a taxable year if the average annual adjusted financial statement income of such corporation (determined without regard to section 56A(d)) for the 3-taxable-year period ending with such taxable year exceeds $1,000,000,000, and in the case of a corporation described in paragraph (2), such corporation meets the average annual adjusted financial statement income test for a taxable year if— the corporation meets the requirements of clause
(i)for such taxable year (determined after the application of paragraph (2)), and the average annual adjusted financial statement income of such corporation (determined without regard to the application of paragraph
(2)and without regard to section 56A(d)) for the 3-taxable-year-period ending with such taxable year is $100,000,000 or more. Notwithstanding subparagraph (A), the term applicable corporation shall not include any corporation which otherwise meets the requirements of subparagraph
(A)if— such corporation— has a change in ownership, or has a specified number (to be determined by the Secretary and which shall, as appropriate, take into account the facts and circumstances of the taxpayer) of consecutive taxable years, including the most recent taxable year, in which the corporation does not meet the average annual adjusted financial statement income test of subparagraph (B), and the Secretary determines that it would not be appropriate to continue to treat such corporation as an applicable corporation. The preceding sentence shall not apply to any corporation if, after the Secretary makes the determination described in clause (ii), such corporation meets the average annual adjusted financial statement income test of subparagraph
(B)for any taxable year beginning after the first taxable year for which such determination applies. Solely for purposes of determining whether a corporation is an applicable corporation under this paragraph, all adjusted financial statement income of persons treated as a single employer with such corporation under subsection
(a)or
(b)of section 52 (determined with the modifications described in clause (ii)) shall be treated as adjusted financial statement income of such corporation, and adjusted financial statement income of such corporation shall be determined without regard to paragraphs (2)(D)(i) and
(11)of section 56A(c). For purposes of this subparagraph— section 52(a) shall be applied by substituting component members for members , and for purposes of applying section 52(b), the term trade or business shall include any activity treated as a trade or business under paragraph
(5)or
(6)of section 469(c) (determined without regard to the phrase To the extent provided in regulations in such paragraph (6)). For purposes of this subparagraph, the term component member has the meaning given such term by section 1563(b), except that the determination shall be made without regard to section 1563(b)(2). If the corporation was in existence for less than 3-taxable years, subparagraph
(B)shall be applied on the basis of the period during which such corporation was in existence. Adjusted financial statement income for any taxable year of less than 12 months shall be annualized by multiplying the adjusted financial statement income for the short period by 12 and dividing the result by the number of months in the short period. Any reference in this subparagraph to a corporation shall include a reference to any predecessor of such corporation. If a corporation is a member of a foreign-parented multinational group for any taxable year, then, solely for purposes of determining whether such corporation meets the average annual adjusted financial statement income test under paragraph (1)(B)(ii)(I) for such taxable year, the adjusted financial statement income of such corporation for such taxable year shall include the adjusted financial statement income of all members of such group. Solely for purposes of this subparagraph, adjusted financial statement income shall be determined without regard to paragraphs (2)(D)(i), (3), (4), and
(11)of section 56A(c). For purposes of subparagraph (A), the term foreign-parented multinational group means, with respect to any taxable year, two or more entities if— at least one entity is a domestic corporation and another entity is a foreign corporation, such entities are included in the same applicable financial statement with respect to such year, and either— the common parent of such entities is a foreign corporation, or if there is no common parent, the entities are treated as having a common parent which is a foreign corporation under subparagraph (D). For purposes of this paragraph, if a foreign corporation is engaged in a trade or business within the United States, such trade or business shall be treated as a separate domestic corporation that is wholly owned by the foreign corporation. The Secretary shall, applying the principles of this section, prescribe rules for the application of this paragraph, including rules for the determination of— the entities (if any) which are to be to be treated under subparagraph (B)(iii)(II) as having a common parent which is a foreign corporation, the entities to be included in a foreign-parented multinational group, and the common parent of a foreign-parented multinational group. The Secretary shall provide regulations or other guidance for the purposes of carrying out this subsection, including regulations or other guidance— providing a simplified method for determining whether a corporation meets the requirements of paragraph (1), and addressing the application of this subsection to a corporation that experiences a change in ownership. . Section 55(a)(2) is amended by inserting plus, in the case of an applicable corporation, the tax imposed by section 59A before the period at the end. Section 55(a) is amended by striking In the case of a taxpayer other than a corporation, there and inserting There . Section 55(b)(1) is amended— by striking so much as precedes subparagraph
(A)and inserting the following: In the case of a taxpayer other than a corporation— , and by adding at the end the following new subparagraph: The term alternative minimum taxable income means the taxable income of the taxpayer for the taxable year— determined with the adjustments provided in section 56 and section 58, and increased by the amount of the items of tax preference described in section 57. If a taxpayer is subject to the regular tax, such taxpayer shall be subject to the tax imposed by this section (and, if the regular tax is determined by reference to an amount other than taxable income, such amount shall be treated as the taxable income of such taxpayer for purposes of the preceding sentence). . Section 860E(a)(4) is amended by striking 55(b)(2) and inserting 55(b)(1)(D) . Section 897(a)(2)(A)(i) is amended by striking 55(b)(2) and inserting 55(b)(1)(D) . Section 11(d) is amended by striking the tax imposed by subsection
(a)and inserting the taxes imposed by subsection
(a)and section 55 . Section 12 is amended by adding at the end the following new paragraph: For alternative minimum tax, see section 55. . Section 882(a)(1) is amended by inserting , 55, after section 11 . Section 6425(c)(1)(A) is amended to read as follows: the sum of— the tax imposed by section 11 or subchapter L of chapter 1, whichever is applicable, plus the tax imposed by section 55, plus the tax imposed by section 59A, over . Section 6655(e)(2) is amended by inserting , adjusted financial statement income (as defined in section 56A), before and modified taxable income each place it appears in subparagraphs (A)(i) and (B)(i). Section 6655(g)(1)(A) is amended by redesignating clauses
(ii)and
(iii)as clauses
(iii)and (iv), respectively, and by inserting after clause
(i)the following new clause: the tax imposed by section 55, . Part VI of subchapter A of chapter 1 is amended by inserting after section 56 the following new section: For purposes of this part, the term adjusted financial statement income means, with respect to any corporation for any taxable year, the net income or loss of the taxpayer set forth on the taxpayer’s applicable financial statement for such taxable year, adjusted as provided in this section. For purposes of this section, the term applicable financial statement means, with respect to any taxable year, an applicable financial statement (as defined in section 451(b)(3) or as specified by the Secretary in regulations or other guidance) which covers such taxable year. Appropriate adjustments shall be made in adjusted financial statement income in any case in which an applicable financial statement covers a period other than the taxable year. If the financial results of a taxpayer are reported on the applicable financial statement for a group of entities, rules similar to the rules of section 451(b)(5) shall apply. Except as provided in regulations prescribed by the Secretary, if the taxpayer is part of an affiliated group of corporations filing a consolidated return for any taxable year, adjusted financial statement income for such group for such taxable year shall take into account items on the group’s applicable financial statement which are properly allocable to members of such group. In the case of any corporation which is not included on a consolidated return with the taxpayer, adjusted financial statement income of the taxpayer with respect to such other corporation shall be determined by only taking into account the dividends received from such other corporation (reduced to the extent provided by the Secretary in regulations or other guidance) and other amounts which are includible in gross income or deductible as a loss under this chapter (other than amounts required to be included under sections 951 and 951A or such other amounts as provided by the Secretary) with respect to such other corporation. Except as provided by the Secretary, if the taxpayer is a partner in a partnership, adjusted financial statement income of the taxpayer with respect to such partnership shall be adjusted to only take into account the taxpayer’s distributive share of adjusted financial statement income of such partnership. For the purposes of this part, the adjusted financial statement income of a partnership shall be the partnership’s net income or loss set forth on such partnership’s applicable financial statement (adjusted under rules similar to the rules of this section). If, for any taxable year, a taxpayer is a United States shareholder of one or more controlled foreign corporations, the adjusted financial statement income of such taxpayer with respect to such controlled foreign corporation (as determined under paragraph (2)(C)) shall be adjusted to also take into account such taxpayer’s pro rata share (determined under rules similar to the rules under section 951(a)(2)) of items taken into account in computing the net income or loss set forth on the applicable financial statement (as adjusted under rules similar to those that apply in determining adjusted financial statement income) of each such controlled foreign corporation with respect to which such taxpayer is a United States shareholder. In any case in which the adjustment determined under subparagraph
(A)would result in a negative adjustment for such taxable year— no adjustment shall be made under this paragraph for such taxable year, and the amount of the adjustment determined under this paragraph for the succeeding taxable year (determined without regard to this paragraph) shall be reduced by an amount equal to the negative adjustment for such taxable year. In the case of a foreign corporation, to determine adjusted financial statement income, the principles of section 882 shall apply. Adjusted financial statement income shall be appropriately adjusted to disregard any Federal income taxes, or income, war profits, or excess profits taxes (within the meaning of section 901) with respect to a foreign country or possession of the United States, which are taken into account on the taxpayer’s applicable financial statement. To the extent provided by the Secretary, the preceding sentence shall not apply to income, war profits, or excess profits taxes (within the meaning of section 901) that are imposed by a foreign country or possession of the United States and taken into account on the taxpayer’s applicable financial statement if the taxpayer does not choose to have the benefits of subpart A of part III of subchapter N for the taxable year. The Secretary shall prescribe such regulations or other guidance as may be necessary and appropriate to provide for the proper treatment of current and deferred taxes for purposes of this paragraph, including the time at which such taxes are properly taken into account. Adjusted financial statement income shall be adjusted to take into account any adjusted financial statement income of a disregarded entity owned by the taxpayer. In the case of a cooperative to which section 1381 applies, the adjusted financial statement income (determined without regard to this paragraph) shall be reduced by the amounts referred to in section 1382(b) (relating to patronage dividends and per-unit retain allocations) to the extent such amounts were not otherwise taken into account in determining adjusted financial statement income. Adjusted financial statement income shall be appropriately adjusted to allow— cost recovery and depletion attributable to property the basis of which is determined under section 21(c) of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1620(c) ), and deductions for amounts payable made pursuant to section 7(i) or section 7(j) of such Act ( 43 U.S.C. 1606(i) and 1606(j)) only at such time as the deductions are allowed for tax purposes. Adjusted financial statement income shall be appropriately adjusted to disregard any amount treated as a payment against the tax imposed by subtitle A pursuant to an election under section 48D(d) or 6417, to the extent such amount was not otherwise taken into account under paragraph (5). Adjusted financial statement income shall be adjusted so as not to include any item of income in connection with a mortgage servicing contract any earlier than when such income is included in gross income under any other provision of this chapter. The Secretary shall provide regulations to prevent the avoidance of taxes imposed by this chapter with respect to amounts not representing reasonable compensation (as determined by the Secretary) with respect to a mortgage servicing contract. Except as otherwise provided in rules prescribed by the Secretary in regulations or other guidance, adjusted financial statement income shall be— adjusted to disregard any amount of income, cost, or expense that would otherwise be included on the applicable financial statement in connection with any covered benefit plan, increased by any amount of income in connection with any such covered benefit plan that is included in the gross income of the corporation under any other provision of this chapter, and reduced by deductions allowed under any other provision of this chapter with respect to any such covered benefit plan. For purposes of this paragraph, the term covered benefit plan means— a defined benefit plan (other than a multiemployer plan described in section 414(f)) if the trust which is part of such plan is an employees’ trust described in section 401(a) which is exempt from tax under section 501(a), any qualified foreign plan (as defined in section 404A(e)), or any other defined benefit plan which provides post-employment benefits other than pension benefits. In the case of an organization subject to tax under section 511, adjusted financial statement income shall be appropriately adjusted to only take into account any adjusted financial statement income— of an unrelated trade or business (as defined in section 513) of such organization, or derived from debt-financed property (as defined in section 514) to the extent that income from such property is treated as unrelated business taxable income. Adjusted financial statement income shall be— reduced by depreciation deductions allowed under section 167 with respect to property to which section 168 applies to the extent of the amount allowed as deductions in computing taxable income for the taxable year, and appropriately adjusted— to disregard any amount of depreciation expense that is taken into account on the taxpayer's applicable financial statement with respect to such property, and to take into account any other item specified by the Secretary in order to provide that such property is accounted for in the same manner as it is accounted for under this chapter. Adjusted financial statement income shall be— reduced by amortization deductions allowed under section 197 with respect to qualified wireless spectrum to the extent of the amount allowed as deductions in computing taxable income for the taxable year, and appropriately adjusted— to disregard any amount of amortization expense that is taken into account on the taxpayer's applicable financial statement with respect to such qualified wireless spectrum, and to take into account any other item specified by the Secretary in order to provide that such qualified wireless spectrum is accounted for in the same manner as it is accounted for under this chapter. For purposes of this paragraph, the term qualified wireless spectrum means wireless spectrum which— is used in the trade or business of a wireless telecommunications carrier, and was acquired after December 31, 2007, and before the date of enactment of this section. The Secretary shall issue regulations or other guidance to provide for such adjustments to adjusted financial statement income as the Secretary determines necessary to carry out the purposes of this section, including adjustments— to prevent the omission or duplication of any item, and to carry out the principles of part II of subchapter C of this chapter (relating to corporate liquidations), part III of subchapter C of this chapter (relating to corporate organizations and reorganizations), and part II of subchapter K of this chapter (relating to partnership contributions and distributions). Adjusted financial statement income (determined after application of subsection
(c)and without regard to this subsection) shall be reduced by an amount equal to the lesser of— the aggregate amount of financial statement net operating loss carryovers to the taxable year, or 80 percent of adjusted financial statement income computed without regard to the deduction allowable under this subsection. A financial statement net operating loss for any taxable year shall be a financial statement net operating loss carryover to each taxable year following the taxable year of the loss. The portion of such loss which shall be carried to subsequent taxable years shall be the amount of such loss remaining (if any) after the application of paragraph (1). For purposes of this subsection, the term financial statement net operating loss means the amount of the net loss (if any) set forth on the corporation’s applicable financial statement (determined after application of subsection
(c)and without regard to this subsection) for taxable years ending after December 31, 2019. The Secretary shall provide for such regulations and other guidance as necessary to carry out the purposes of this section, including regulations and other guidance relating to the effect of the rules of this section on partnerships with income taken into account by an applicable corporation. . The table of sections for part VI of subchapter A of chapter 1 is amended by inserting after the item relating to section 56 the following new item: Sec. 56A. Adjusted financial statement income. . Section 59 , as amended by this section, is amended by adding at the end the following new subsection: For purposes of this part, if an applicable corporation chooses to have the benefits of subpart A of part III of subchapter N for any taxable year, the corporate AMT foreign tax credit for the taxable year of the applicable corporation is an amount equal to sum of— the lesser of— the aggregate of the applicable corporation’s pro rata share (as determined under section 56A(c)(3)) of the amount of income, war profits, and excess profits taxes (within the meaning of section 901) imposed by any foreign country or possession of the United States which are— taken into account on the applicable financial statement of each controlled foreign corporation with respect to which the applicable corporation is a United States shareholder, and paid or accrued (for Federal income tax purposes) by each such controlled foreign corporation, or the product of the amount of the adjustment under section 56A(c)(3) and the percentage specified in section 55(b)(2)(A)(i), and in the case of an applicable corporation that is a domestic corporation, the amount of income, war profits, and excess profits taxes (within the meaning of section 901) imposed by any foreign country or possession of the United States to the extent such taxes are— taken into account on the applicable corporation’s applicable financial statement, and paid or accrued (for Federal income tax purposes) by the applicable corporation. For any taxable year for which an applicable corporation chooses to have the benefits of subpart A of part III of subchapter N, the excess of the amount described in paragraph (1)(A)(i) over the amount described in paragraph (1)(A)(ii) shall increase the amount described in paragraph (1)(A)(i) in any of the first 5 succeeding taxable years to the extent not taken into account in a prior taxable year. The Secretary shall provide for such regulations or other guidance as is necessary to carry out the purposes of this subsection. . Section 38(c)(6)(E) is amended to read as follows: In the case of a corporation— the first sentence of paragraph
(1)shall be applied by substituting 25 percent of the taxpayer's net income tax as exceeds $25,000 for the greater of and all that follows, paragraph (2)(A) shall be applied without regard to clause (ii)(I) thereof, and paragraph (4)(A) shall be applied without regard to clause (ii)(I) thereof. . Section 53(e) is amended to read as follows: In the case of a corporation— subsection (b)(1) shall be applied by substituting the net minimum tax for all prior taxable years beginning after 2022 for the adjusted net minimum tax imposed for all prior taxable years beginning after 1986 , and the amount determined under subsection (c)(1) shall be increased by the amount of tax imposed under section 59A for the taxable year. . Section 53(d) is amended— in paragraph (2), by striking , except that in the case and all that follows through treated as zero , and by striking paragraph (3). The amendments made by this section shall apply to taxable years beginning after December 31, 2022.
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