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TITLE 26 - INTERNAL REVENUE
CHAPTER I - INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
SUBCHAPTER A - INCOME TAX
PART 1 - INCOME TAXES
1.56A - 3 - Effective date.
(a) In general. The minimum tax is effective for taxable years ending after December 31, 1969.
(b) Taxable year beginning in 1969 and ending in 1970. In the case of a taxable year beginning in 1969 and ending in 1970, the amount of the minimum tax shall be an amount equal to the amount determined under section 56 multiplied by the following fraction: Number of days in the taxable year ending after December 31, 1969Number of days in the entire taxable year.
Where, by reason of section 56(b) and 1.56A2, tax initially imposed in a 196970 fiscal year is deferred until a subsequent taxable year or years, the amount of such tax liability in any subsequent taxable year is determined by application of the above fraction. Section 21, relating to computation of tax in years where there is a change in rates, is not applicable to the initial imposition of the minimum tax for tax preferences. The applications of this paragraph may be illustrated by the following example: Example. The taxpayer uses a June 30 fiscal year. For fiscal 19691970 the taxpayer has $180,000 of items of tax preference and a $50,000 net operating loss. In fiscal year 19701971, the taxpayer uses the full net operating loss carryover from 19691970 to reduce his taxable income by $50,000. Thus, without regard to the proration rules applicable under this section, the taxpayer's minimum tax liability for items of tax preference arising in 19691970 is $15,000, i.e., 10 percent($180,000$30,000), of which $5,000, i.e., 10 percent$50,000, is deferred until 19701971 under the principles of section 56(b) and section 1.56A2. By application of the above formula the taxpayer's actual minimum tax liability is $4,958.90 in 19691970 and $2,479.45 in 19701971 determined as follows: 19691970: 181/365$10,000 19701971: 181/365$5,000 [T.D. 7564, 43 FR 40468, Sept. 12, 1978. Redesignated and amended by T.D. 8138, 52 FR 15309, Apr. 28, 1987]
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