1120-US: Corporation does not qualify as a small corporation when the gross receipts test is met (FAQ)

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Question

Why doesn't the corporation qualify as a small corporation when the gross receipts test is met?

Answer

Per Form 4626 instructions, a corporation is treated as a small corporation exempt from the AMT for its current tax year if that year is the corporation's first tax year in existence (regardless of its gross receipts for the year) or:

In order to qualify as a small corporation exempt from AMT, the Corporation qualified as a small corporation for all prior tax periods beginning after 1997 field must be marked in Screen AMT in the Taxes folder, unless this year is the initial tax year of the corporation and the Initial return field is marked in Screen 1120. If the corporation does not meet the requirements listed above, the corporation is subject to AMT.

Related topic: 1120 frequently asked questions

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