US proposed CAMT regulations offer some clarification, but AFSI adjustments are significantly complicated

The recently proposed corporate alternative minimum tax (CAMT) regulations (pdf), issued on September 12, 2024, offer guidance for determining whether a corporation is an "applicable corporation" subject to the CAMT and computing an entity's adjusted financial statement income (AFSI). The AFSI computations, however, are significantly complicated. The proposed regulations also contain guidance on determining the CAMT foreign tax credit.

The proposed regulations come more than two years after the CAMT was enacted as part of the Inflation Reduction Act (See Tax Alert 2022-1237), and after the issuance of multiple Treasury Department and IRS notices providing interim CAMT guidance (See Tax Alerts 2023-2105, 2023-0091, 2023-0384 and 2023-1570).

Some of the proposed rules would apply to tax years ending after September 13, 2024, while the remainder of the proposed rules would generally apply to tax years ending after the date the final regulations are published. Taxpayers may choose to early-rely on the proposed regulations, including for 2023 tax years; however, early reliance comes with a number of stipulations.

The attached 70-page Tax Alert provides a comprehensive overview of the proposed regulations. Observations on domestic and international tax aspects of the regulations are included, as well as discussions on partnerships, hedging transactions and financially distressed companies. For ease of use, the Tax Alert includes a table of contents with hyperlinks that allow readers to navigate to the sections of interest to them.

For additional information concerning this Alert, please contact:

Ernst & Young LLP (United States), National Tax — Accounting Periods, Methods & Credits

• Rayth Myers
• Tim Powell

National Tax M&A Group - International Tax and Transaction Services

• Brian Peabody
•  Nicole Field

Ernst & Young LLP (United States), National Tax - International Tax and Transactions Services — Capital Markets

• Tim Kerr
• Tim Wichman

International Tax & Transaction Services

• Enrica Ma
• Jeshua Wright
• Arlene Fitzpatrick
• Joshua Ruland
• Nathalie Nguyen

Passthrough Transactions Group

• Mark Opper
• Nadine Holovach
• Chris Mayer-Dempsey
• Alex Marcellesi

Compensation and Benefits Group

• Christa Bierma
• Stephen LaGarde
• Bing Luke
• Rachael Walker

Published by NTD’s Tax Technical Knowledge Services group; Jennifer A Brittenham, legal editor.