The corporate alternative minimum tax in the 1990s

Article Abstract:

The Omnibus Reconciliation Act of 1989 affected important changes in the way the minimum tax credit and adjusted current earnings are computed when determining the alternative minimum income tax (AMT). Adjusted current earnings must be used for AMT calculations for tax years beginning after 1989. The AMT is the excess of the tentative minimum tax of a corporation over its regular tax liability. Corporations compute their tax liabilities under both the AMT and the regular tax systems, and are liable for the larger sum. The tax treatment of corporate preferences, net operating losses, credits, adjustments, depreciation, accelerations and deferrals are also affected by the new AMT tax regime.

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S corporation: the new corporate tax planning weapon

Article Abstract:

Electing 'S' corporation status can offer substantial benefits under the right conditions, but each business should carefully evaluate its current operating environment and evaluate the advantages and disadvantages of this special tax status. The tax rate structure under provisions of the Tax Reform Act of 1986 provides a strong incentive for profitable firms to elect S corporation status, since federal income is then taxed at the stockholder level rather than at the corporate level. Income earned by stockholders of S corporations is reported by the stockholders on their individual tax returns. Six potential difficulties faced by corporations electing S status are detailed.

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Corporate tax planning ideas and pitfalls

Article Abstract:

Companies with a combined federal and state tax rate of over 38% can adopt tax planning techniques that can reduce their tax burdens. Tax planning opportunities include choosing an election as an S corporation. In addition, corporations must avoid increased tax burdens as the result of common actions. Acquisitions of a corporation, the corporation's assets, or the stock of another corporation all have certain tax benefits that can be avoided through proper planning.

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