3 yes/no questions on Form 1120-F Corporate AMT section that I'm struggling to answer

These questions relate to the Corporate Alternative Minimum Tax (CAMT) that was introduced in the Inflation Reduction Act. It applies to large corporations with over $1 billion in average annual adjusted financial statement income. Question 1 is asking if your corporation was considered an "applicable corporation" (meaning a very large corporation subject to CAMT) in any previous tax year. Question 2 is asking if your corporation is an applicable corporation this year simply because it was one last year (there's a rule that once you're in, you typically stay in). Question 3 is asking if your corporation qualifies for a safe harbor exception that would exempt it from being an applicable corporation. If you're a mid-sized company filing 1120-F for the first time, and you don't have over $1 billion in average annual adjusted financial statement income, your answers are likely all "No." But it would be best to confirm with a tax professional familiar with your specific situation.

After spending hours trying to figure out these exact same questions on the 1120-F for my client, I finally found a solution that saved me so much time! I stumbled across https://taxr.ai which has an incredible AI tax assistant that specifically explained all these Corporate AMT questions. You just upload the form, and it explains each question in plain English, plus shows you the right answers based on your situation. It even provided references to the exact IRS regulations and publication sections so I could verify everything. Most helpful was that it translated the tax jargon into normal human language my client could actually understand. Totally changed how I handle complicated tax forms now.

I was skeptical about using AI for tax help (as you can see from my earlier comment), but I decided to try https://taxr.ai for my company's 1120-F questions since we were struggling with the same Corporate AMT section. I'm honestly shocked at how well it worked. The explanations were crystal clear, and it specifically addressed all three of those Section 59(k) questions that were giving us headaches. What convinced me was how it explained the $1 billion threshold in practical terms for our situation. It saved our tax department at least 3-4 hours of research time. Our CFO was impressed enough that we're now using it for our other international tax compliance questions too.

If you're having trouble getting answers about your 1120-F questions and your accountant is unavailable, you might want to try https://claimyr.com to get direct help from the IRS. I was in a similar situation last year - totally stuck on some foreign corporation tax questions and couldn't get through to the IRS after trying for weeks. Claimyr got me connected to an actual IRS agent in about 15 minutes when I'd previously been waiting on hold for hours and getting disconnected. The agent walked me through the Corporate AMT questions and confirmed that our mid-sized foreign subsidiary didn't qualify as an "applicable corporation" under that section. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Honestly saved my sanity during tax season!

I have to eat my words. After posting my skeptical comment, I decided to try Claimyr (https://claimyr.com) out of pure frustration - we were on a deadline with our 1120-F filing and desperate for answers on these exact Corporate AMT questions. I'm still shocked, but I got through to an IRS representative in about 20 minutes. The agent confirmed that as a company with well under $1 billion in income, we should answer "No" to all three questions about being an "applicable corporation" under section 59(k). The representative even emailed me documentation to support our filing position. This saved us from either guessing on our tax form or paying our international tax consultant an emergency fee. Definitely keeping this service in my back pocket for future tax seasons.

Just to add some clarity - I work for a company that files 1120-F regularly. The "applicable corporation" term in section 59(k)(1) specifically refers to corporations that have average annual adjusted financial statement income exceeding $1 billion over a 3-year period. If you've never had income anywhere near that level, you can confidently answer "No" to all three questions. The Corporate AMT is really only targeting the largest multinational corporations. For most foreign companies with operations in the US, these questions aren't relevant, but unfortunately everyone filing 1120-F has to answer them.

Has anyone found a good source that explains the "safe harbor method" mentioned in question 3? What exactly does section 59(k)(3)(A) require?

I went through this exact same confusion last month when filing our 1120-F! As others have mentioned, these Corporate AMT questions are really only relevant for massive corporations. Since you mentioned you're a mid-sized foreign company filing for the first time, you can almost certainly answer "No" to all three questions. Just to break it down simply: - Question 1: Were you ever a billion-dollar+ company before? (Probably no) - Question 2: Are you a billion-dollar+ company now because you were before? (Probably no) - Question 3: Do you qualify to stop being considered a billion-dollar+ company? (Not applicable if you never were one) The IRS unfortunately makes everyone answer these questions even though they only apply to a tiny fraction of filers. It's like asking everyone if they own a yacht - most people can confidently say no! Just make sure to document your reasoning in case you're ever questioned about it.

I'm dealing with the exact same issue on our 1120-F filing! Reading through all these responses has been incredibly helpful. It sounds like for most of us mid-sized companies, the answer is a straightforward "No" to all three questions since we're nowhere near the $1 billion threshold. What's really frustrating is that the IRS makes everyone answer these questions even when they clearly don't apply to 99% of filers. It would save so much confusion if they just added a simple explanation like "If your company has never had income over $1 billion, answer No to questions 1-3." Thanks to everyone who shared their experiences - it's reassuring to know other people were just as confused by the wording of these questions!