The Department of Treasury, in collaboration with the Internal Revenue Service (IRS), recently issued Notice 2024-10. This notice provides additional interim guidance on the new corporate alternative minimum tax (CAMT). The CAMT was established by the Inflation Reduction Act and imposes a 15% minimum tax on the adjusted financial statement income (AFSI) of large corporations.
This new tax provision applies to taxable years beginning after December 31, 2022, and generally targets large corporations with an average annual financial statement income exceeding $1 billion.
Notice 2024-10 builds upon previous clarifications provided by the IRS in Notice 2023-64, which supplemented earlier notices 2023-07 and 2023-20. The Treasury Department and IRS anticipate that forthcoming proposed regulations will align with this interim guidance.
The recent guidance outlines rules for determining the AFSI of a U.S. shareholder in scenarios where a controlled foreign corporation (CFC) pays a dividend to the U.S. shareholder or another CFC. This clarification is crucial as it impacts the tax obligations of U.S. shareholders with foreign investments.
Additionally, the guidance modifies and clarifies the rules for determining the applicable financial statement of a corporation included in a consolidated tax return, as laid out in Notice 2023-64.
These updates aim to offer clarity to large corporations navigating the new CAMT provisions.
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