The Treasury Department and IRS on Thursday released proposed regulations concerning the implementation of the corporate alternative minimum tax, or CAMT. The new rules include proposals to permit businesses to terminate their status as an “applicable corporation” subject to the CAMT, to clarify adjustments of income attributed to troubled companies, and to address the transition to final regulations.
The new rules also include a proposal—Prop. Reg. §1.56A-21(f)—to implement the American Bankers Association’s previous request to address the potential application of the CAMT to federal financial assistance in Section 597 transactions, which are transactions involving bank takeovers of troubled financial institutions.
The proposed rulemaking’s preamble notes: “Stakeholders stated that this mismatch in timing of recognition of amounts attributable to FFA [federal financial assistance] for AFSI [adjusted financial statement income] purposes and regular tax purposes may cause or increase CAMT tax liability solely because of a CAMT entity’s participation in transactions involving troubled financial institutions that the provision of FFA is otherwise intended to encourage. To address this mismatch in timing, proposed §1.56A-21(f) would provide adjustments to AFSI so as not to include any financial accounting gain attributable to FFA any earlier than when the gain is included in gross income for purposes of section 597 and the regulations under section 597.”
Comments must be submitted by Dec. 12. A public hearing has been scheduled for Jan. 16, 2025.
