[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.56A-3]

[Page 475]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 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, 1969/Number 
    of days in the entire taxable year.

Where, by reason of section 56(b) and Sec. 1.56A-2, tax initially 
imposed in a 1969-70 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 1969-
1970 the taxpayer has $180,000 of items of tax preference and a $50,000 
net operating loss. In fiscal year 1970-1971, the taxpayer uses the full 
net operating loss carryover from 1969-1970 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 1969-1970 is $15,000, i.e., 10 percentx($180,000-
$30,000), of which $5,000, i.e., 10 percentx$50,000, is deferred until 
1970-1971 under the principles of section 56(b) and section 1.56A-2. By 
application of the above formula the taxpayer's actual minimum tax 
liability is $4,958.90 in 1969-1970 and $2,479.45 in 1970-1971 
determined as follows:

1969-1970: 181/365x$10,000
1970-1971: 181/365x$5,000

[T.D. 7564, 43 FR 40468, Sept. 12, 1978. Redesignated and amended by 
T.D. 8138, 52 FR 15309, Apr. 28, 1987]