Can AMT credit carryovers be lost?

March 22, 2006

Date:  Tue, 14 Mar 2006
From:   Wendy

I have a question about AMT credit carryovers. (See our article on “The Amazing Disappearing AMT Credit.”) Are you saying the minimum tax credit carry forward that arises in Year 1 may not be fully recovered in subsequent years that have no AMT? I’ve run a calculation over and over on a client and some of the credit carry forward is used, but then no carry forward to 2006 for the balance. I didn’t think this was possible, so I would like confirmation.

Thanks in advance,


Date:   Sat, 18 Mar 2006

Hello Wendy,

It’s possible.

It depends on the mix of “timing differences” and exclusion items for the particular taxpayer.

Also, many taxpayers are finding they have AMT tax liabilities on an ongoing basis because of disallowed deductions for items like state income taxes and property taxes on their real estate, so they can’t use their AMT credit carryover indefinitely.

Good luck!

Mike Gray

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