Partnerships Gain CAMT Alternative

On July 29, the IRS issued interim guidance intended to reduce the compliance burdens associated with applying the corporate alternative minimum tax ("CAMT") to partnerships. In so doing, they announced their intention to partially withdraw the proposed CAMT regulations published in September of last year and replace them with new rules that would simplify how corporations subject to CAMT account for their interests in partnerships.

As previously discussed here, under the proposed regulations, corporations subject to CAMT are required to pay tax on their "adjusted financial statement income" ("AFSI"), a hybrid tax base computed in part on traditional income tax accounting principles, in part on financial accounting principles such as GAAP, and in part on new principles developed specifically for the purpose of computing CAMT. CAMT (and the associated burden of calculating AFSI) was generally intended to apply only to large, profitable corporate groups with