§55. Alternative minimum tax imposed

(a) General rule

There is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to the excess (if any) of-

(1) the tentative minimum tax for the taxable year, over

(2) the regular tax for the taxable year.

(b) Tentative minimum tax

For purposes of this part-

(1) Amount of tentative tax

(A) Noncorporate taxpayers

(i) In general

In the case of a taxpayer other than a corporation, the tentative minimum tax for the taxable year is the sum of-

(I) 26 percent of so much of the taxable excess as does not exceed $175,000, plus

(II) 28 percent of so much of the taxable excess as exceeds $175,000.

 The amount determined under the preceding sentence shall be reduced by the alternative minimum tax foreign tax credit for the taxable year.

(ii) Taxable excess

For purposes of clause (i), the term "taxable excess" means so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount.

(iii) Married individual filing separate return

In the case of a married individual filing a separate return, clause (i) shall be applied by substituting "$87,500" for "$175,000" each place it appears. For purposes of the preceding sentence, marital status shall be determined under section 7703.

(B) Corporations

In the case of a corporation, the tentative minimum tax for the taxable year is-

(i) 20 percent of so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount, reduced by

(ii) the alternative minimum tax foreign tax credit for the taxable year.

(2) Alternative minimum taxable income

The term "alternative minimum taxable income" means the taxable income of the taxpayer for the taxable year-

(A) determined with the adjustments provided in section 56 and section 58, and

(B) 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).

(c) Regular tax

(1) In general

For purposes of this section, the term "regular tax" means the regular tax liability for the taxable year (as defined in section 26(b)) reduced by the foreign tax credit allowable under section 27(a) and the section 936 credit allowable under section 27(b). Such term shall not include any tax imposed by section 402(d) and shall not include any increase in tax under section 49(b) or 50(a) or subsection (j) or (k) of section 42.

(2) Cross references

For provisions providing that certain credits are not allowable against the tax imposed by this section, see sections 26(a), 28(d)(2), 29(b)(6), 30(b)(3), and 38(c).

(d) Exemption amount

For purposes of this section-

(1) Exemption amount for taxpayers other than corporations

In the case of a taxpayer other than a corporation, the term "exemption amount" means-

(A) $45,000 in the case of-

(i) a joint return, or

(ii) a surviving spouse,

(B) $33,750 in the case of an individual who-

(i) is not a married individual, and

(ii) is not a surviving spouse, and

(C) $22,500 in the case of-

(i) a married individual who files a separate return, or

(ii) an estate or trust.

For purposes of this paragraph, the term "surviving spouse" has the meaning given to such term by section 2(a), and marital status shall be determined under section 7703.

(2) Corporations

In the case of a corporation, the term "exemption amount" means $40,000.

(3) Phase-out of exemption amount

The exemption amount of any taxpayer shall be reduced (but not below zero) by an amount equal to 25 percent of the amount by which the alternative minimum taxable income of the taxpayer exceeds-

(A) $150,000 in the case of a taxpayer described in paragraph (1)(A) or (2),

(B) $112,500 in the case of a taxpayer described in paragraph (1)(B), and

(C) $75,000 in the case of a taxpayer described in paragraph (1)(C).

In the case of a taxpayer described in paragraph (1)(C)(i), alternative minimum taxable income shall be increased by the lesser of (i) 25 percent of the excess of alternative minimum taxable income (determined without regard to this sentence) over $165,000 or (ii) $22,500.

(Added and amended Pub. L. 99–514, title II, §252(c), title VII, §701(a), Oct. 22, 1986, 100 Stat. 2205 , 2321; Pub. L. 100–647, title I, §§1002(l)(27), 1007(a), Nov. 10, 1988, 102 Stat. 3381 , 3428; Pub. L. 101–508, title XI, §§11102(a), 11813(b)(5), Nov. 5, 1990, 104 Stat. 1388–406 , 1388-551; Pub. L. 102–318, title V, §521(b)(1), July 3, 1992, 106 Stat. 310 ; Pub. L. 102–486, title XIX, §1913(b)(2)(D), Oct. 24, 1992, 106 Stat. 3020 ; Pub. L. 103–66, title XIII, §13203(a)–(c)(1), Aug. 10, 1993, 107 Stat. 461 , 462.)

Prior Provisions

A prior section 55, Pub. L. 95–600, title IV, §421(a), Nov. 6, 1978, 92 Stat. 2871 ; amended Pub. L. 96–222, title I, §104(a)(4)(A)–(D), (G), (H)(i), (ii), (viii), Apr. 1, 1980, 94 Stat. 215–218 ; Pub. L. 96–223, title II, §232(b)(2)(A), (c)(2), Apr. 2, 1980, 94 Stat. 276 , 277; Pub. L. 96–603, §4(a), (b), Dec. 28, 1980, 94 Stat. 3513 , 3514; Pub. L. 97–34, title I, §101(d)(1), title II, §221(b)(1)(A), title III, §331(d)(1)(A), Aug. 13, 1981, 95 Stat. 183 , 246, 294; Pub. L. 97–248, title II, §201(a), Sept. 3, 1982, 96 Stat. 411 ; Pub. L. 97–354, §5(a)(13), Oct. 19, 1982, 96 Stat. 1693 ; Pub. L. 97–448, title I, §103(g)(2)(E), title III, §§305(c), 306(a)(1)(B), (C), Jan. 12, 1983, 96 Stat. 2379 , 2399, 2400; Pub. L. 98–369, div. A, title IV, §§474(q), 491(d)(1), title VI, §612(e)(3), title VII, §711(a)(1), (4), (5), July 18, 1984, 98 Stat. 838 , 849, 912, 942, 943; Pub. L. 99–514, title XVIII, §1847(a), Oct. 22, 1986, 100 Stat. 2856 , related to alternative minimum tax for taxpayers other than corporations, prior to the general revision of this part by Pub. L. 99–514, §701(a).

Amendments

1993-Subsec. (b)(1). Pub. L. 103–66, §13203(a), amended heading and text of par. (1) generally. Prior to amendment, text read as follows: "The tentative minimum tax for the taxable year is-

"(A) 20 percent (24 percent in the case of a taxpayer other than a corporation) of so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount, reduced by

"(B) the alternative minimum tax foreign tax credit for the taxable year."

Subsec. (d)(1). Pub. L. 103–66, §13203(b), substituted "$45,000" for "$40,000" in subpar. (A), "$33,750" for "$30,000" in subpar. (B), and "$22,500" for "$20,000" in subpar. (C).

Subsec. (d)(3). Pub. L. 103–66, §13203(c)(1), substituted "$165,000 or (ii) $22,500" for "$155,000 or (ii) $20,000" in last sentence.

1992-Subsec. (c)(1). Pub. L. 102–318 substituted "402(d)" for "402(e)".

Subsec. (c)(2). Pub. L. 102–486 substituted "29(b)(6), 30(b)(3)," for "29(b)(5),".

1990-Subsec. (b)(1)(A). Pub. L. 101–508, §11102(a), substituted "24 percent" for "21 percent".

Subsec. (c)(1). Pub. L. 101–508, §11813(b)(5), substituted "section 49(b) or 50(a)" for "section 47".

1988-Subsec. (b)(2). Pub. L. 100–647, §1007(a)(2), inserted at end "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)."

Subsec. (c)(1). Pub. L. 100–647, §1007(a)(1), inserted "and the section 936 credit allowable under section 27(b)" before period at end of first sentence.

Pub. L. 100–647, §1002(l)(27), substituted "subsection (j) or (k) of section 42" for "section 42(j)".

Subsec. (d)(3). Pub. L. 100–647, §1007(a)(3), inserted at end "In the case of a taxpayer described in paragraph (1)(C)(i), alternative minimum taxable income shall be increased by the lesser of (i) 25 percent of the excess of alternative minimum taxable income (determined without regard to this sentence) over $155,000, or (ii) $20,000."

1986-Subsec. (c)(1). Pub. L. 99–514, §252(c), inserted "or section 42(j)".

Effective Date of 1993 Amendment

Section 13203(d) of Pub. L. 103–66 provided that: "The amendments made by this section [amending this section and section 897 of this title] shall apply to taxable years beginning after December 31, 1992."

Effective Date of 1992 Amendments

Amendment by Pub. L. 102–486 applicable to property placed in service after June 30, 1993, see section 1913(c) of Pub. L. 102–486, set out as an Effective Date note under section 30 of this title.

Amendment by Pub. L. 102–318 applicable to distributions after Dec. 31, 1992, see section 521(e) of Pub. L. 102–318, set out as a note under section 402 of this title.

Effective Date of 1990 Amendment

Section 11102(b) of Pub. L. 101–508 provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1990."

Amendment by section 11813(b)(5) of Pub. L. 101–508 applicable to property placed in service after Dec. 31, 1990, but not applicable to any transition property (as defined in section 49(e) of this title), any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of this title, and any property described in section 46(b)(2)(C) of this title, as such sections were in effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101–508, set out as a note under section 29 of this title.

Effective Date of 1988 Amendment

Amendment by section 1002(l)(27) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Section 1007(a)(3) of Pub. L. 100–647 provided that the amendment made by that section is effective with respect to taxable years ending after Nov. 10, 1988.

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–514 applicable to buildings placed in service after Dec. 31, 1986, in taxable years ending after such date, see section 252(e) of Pub. L. 99–514, set out as an Effective Date note under section 42 of this title.

Effective Date

Section 701(f) of Pub. L. 99–514, as amended by Pub. L. 100–647, title I, §1007(f)(2), (3), Nov. 10, 1988, 102 Stat. 3433 , provided that:

"(1) In general.-Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and sections 53 and 56 to 59 of this title and amending sections 5, 12, 26, 28, 29, 38, 48, 173, 174, 263, 381, 443, 703, 882, 897, 904, 936, 1016, 1363, 1366, 1561, 6154, 6425, and 6655 of this title] shall apply to taxable years beginning after December 31, 1986.

"(2) Adjustment of net operating loss.-

"(A) Individuals.-In the case of a net operating loss of an individual for a taxable year beginning after December 31, 1982, and before January 1, 1987, for purposes of determining the amount of such loss which may be carried to a taxable year beginning after December 31, 1986, for purposes of the minimum tax, such loss shall be adjusted in the manner provided in section 55(d)(2) of the Internal Revenue Code of 1954 [now 1986] as in effect on the day before the date of the enactment of this Act [Oct. 22, 1986].

"(B) Corporations.-If the minimum tax of a corporation was deferred under section 56(b) of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of this Act [Oct. 22, 1986]) for any taxable year beginning before January 1, 1987, and the amount of such tax has not been paid for any taxable year beginning before January 1, 1987, the amount of the net operating loss carryovers of such corporation which may be carried to taxable years beginning after December 31, 1986, for purposes of the minimum tax shall be reduced by the amount of tax preferences a tax on which was so deferred.

"(3) Installment sales.-Section 56(a)(6) of the Internal Revenue Code of 1986 (as amended by this section) shall not apply to any disposition to which the amendments made by section 811 of this Act [enacting section 453C of this title] (relating to allocation of dealer's indebtedness to installment obligations) do not apply by reason of section 811(c)(2) of this Act [enacting provisions set out as a note under section 453C of this title].

"(4) Exception for charitable contributions before august 16, 1986.-Section 57(a)(6) of the Internal Revenue Code of 1986 (as amended by this section) shall not apply to any deduction attributable to contributions made before August 16, 1986.

"(5) Book income.-

"(A) In general.-In the case of a corporation to which this paragraph applies, the amount of any increase for any taxable year under section 56(c)(1)(A) of the Internal Revenue Code of 1986 (as added by this section) shall be reduced (but not below zero) by the excess (if any) of-

"(i) 50 percent of the excess of taxable income for the 5-taxable year period ending with the taxable year preceding the 1st taxable year to which such section applies over the adjusted net book income for such period, over

"(ii) the aggregate amounts taken into account under this paragraph for preceding taxable years.

"(B) Taxpayer to whom paragraph applies.-This paragraph applies to a taxpayer which was incorporated in Delaware on May 31, 1912.

"(C) Terms.-Any term used in this paragraph which is used in section 56 of such Code (as so added) shall have the same meaning as when used in such section.

"(6) Certain public utility.-

"(A) In the case of investment tax credits described in subparagraph (B) or (C), subsection 38(c)(3)(A)(ii) of the Internal Revenue Code of 1986 shall be applied by substituting '25 percent' for '75 percent', and section 38(c)(3)(B) of the Internal Revenue Code of 1986 shall be applied by substituting '75 percent' for '25 percent'.

"(B) If, on September 25, 1985, a regulated electric utility owned an undivided interest, within the range of 1,111 and 1,149, in the 'maximum dependable capacity, net, megawatts electric' of an electric generating unit located in Illinois or Mississippi for which a binding written contract was in effect on December 31, 1980, then any investment tax credit with respect to such unit shall be described in this subparagraph. The aggregate amount of investment tax credits with respect to the unit in Mississippi allowed solely by reason of being described in this subparagraph shall not exceed $141,000,000.

"(C) If, on September 25, 1985, a regulated electric utility owned an undivided interest, within the range of 1,104 and 1,111, in the 'maximum dependable capacity, net, megawatts electric' of an electric generating unit located in Louisiana for which a binding written contract was in effect on December 31, 1980, then any investment tax credit of such electric utility shall be described in this subparagraph. The aggregate amount of investment tax credits allowed solely by reason of being described by this subparagraph shall not exceed $20,000,000.

"(7) Agreement vessel depreciation adjustment.-

"(A) For purposes of part VI of subchapter A of chapter 1 of the Internal Revenue Code of 1986, in the case of a qualified taxpayer, alternative minimum taxable income for the taxable year shall be reduced by an amount equal to the agreement vessel depreciation adjustment.

"(B) For purposes of this paragraph, the agreement vessel depreciation adjustment shall be an amount equal to the depreciation deduction that would have been allowable for such year under section 167 of such Code with respect to agreement vessels placed in service before January 1, 1987, if the basis of such vessels had not been reduced under section 607 of the Merchant Marine Act of 1936 [46 App. U.S.C. 1177], as amended, and if depreciation with respect to such vessel had been computed using the 25-year straight-line method. The aggregate amount by which basis of a qualified taxpayer is treated as not reduced by reason of this subparagraph shall not exceed $100,000,000.

"(C) For purposes of this paragraph, the term 'qualified taxpayer' means a parent corporation incorporated in the State of Delaware on December 1, 1972, and engaged in water transportation, and includes any other corporation which is a member of the affiliated group of which the parent corporation is the common parent. No taxpayer shall be treated as a qualified corporation for any taxable year beginning after December 31, 1991."

Savings Provision

For provisions that nothing in amendment by section 11813(b)(5) of Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 29 of this title.

Transitional Provisions

Section 1007(f)(1) of Pub. L. 100–647 provided that: "In the case of the taxable year of an estate or trust which begins before January 1, 1987, and ends on or after such date, the items of tax preference apportioned to any beneficiary of such estate or trust under section 58(c) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 [Oct. 22, 1986]) shall be taken into account for purposes of determining the amount of the tax imposed by section 55 of the Internal Revenue Code of 1986 (as amended by the Tax Reform Act of 1986 [Pub. L. 99–514]) on such beneficiary for such beneficiary's taxable year in which such taxable year of the estate or trust ends."

Plan Amendments Not Required Until January 1, 1994

For provisions directing that if any amendments made by subtitle B [§§521–523] of title V of Pub. L. 102–318 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1994, see section 523 of Pub. L. 102–318, set out as a note under section 401 of this title.

Applicability of Certain Amendments by Pub. L. 99–514 in Relation to Treaty Obligations of United States

For applicability of amendment by section 701(a) of Pub. L. 99–514 [enacting this section] notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, with provision that for such purposes any amendment by title I of Pub. L. 100–647 be treated as if it had been included in the provision of Pub. L. 99–514 to which such amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100–647, set out as a note under section 861 of this title.

High Income Taxpayer Report

Section 2123 of Pub. L. 94–455, as amended by Pub. L. 98–369, div. A, title IV, §441(b)(1), July 18, 1984, 98 Stat. 815 , provided that: "The Secretary of the Treasury shall publish annually information on the amount of tax paid by individual taxpayers with high total incomes. Total income for this purpose is to be calculated and set forth by adding to adjusted gross income any items of tax preference excluded from, or deducted in arriving at, adjusted gross income, and by subtracting any investment expenses incurred in the production of such income to the extent of the investment income. These data are to include the number of such individuals with total income over $200,000 who owe no Federal income tax (after credits) and the deductions, exclusions, or credits used by them to avoid tax."

[Section 441(b)(2) of Pub. L. 98–369 provided that: "The amendment made by paragraph (1) [amending section 2123 of Pub. L. 94–455, set out above] shall apply to information published after the date of the enactment of this Act [July 18, 1984]."]

Section Referred to in Other Sections

This section is referred to in sections 2, 5, 11, 12, 26, 32, 38, 45A, 53, 59, 59A, 168, 443, 666, 815, 847, 871, 877, 882, 897, 962, 1561, 6425, 6655, 6662 of this title.