Tentative minimum tax

For purposes of this part—

(1) Noncorporate taxpayers In the case of a taxpayer other than a corporation— (A) In general The tentative minimum tax for the taxable year is the sum of— (i) 26 percent of so much of the taxable excess as does not exceed $175,000, plus (ii) 28 percent of so much of the taxable excess as exceeds $175,000. The amount determined under the preceding sentence shall be reduced by the alternative minimum tax foreign tax credit for the taxable year. (B) Taxable excess For purposes of this subsection, the term “taxable excess” means so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount. (C) Married individual filing separate return In the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting 50 percent of the dollar amount otherwise applicable under clause (i) and clause (ii) thereof. For purposes of the preceding sentence, marital status shall be determined under section 7703. (D) Alternative minimum taxable income The term “alternative minimum taxable income” means the taxable income of the taxpayer for the taxable year— (i) determined with the adjustments provided in section 56 and section 58, and (ii) increased by the amount of the items of tax preference described in section 57. If a taxpayer is subject to the regular tax, such taxpayer shall be subject to the tax imposed by this section (and, if the regular tax is determined by reference to an amount other than taxable income, such amount shall be treated as the taxable income of such taxpayer for purposes of the preceding sentence).

(2) Corporations (A) Applicable corporations In the case of an applicable corporation, the tentative minimum tax for the taxable year shall be the excess of— (i) 15 percent of the adjusted financial statement income for the taxable year (as determined under section 56A), over (ii) the corporate AMT foreign tax credit for the taxable year. (B) Other corporations In the case of any corporation which is not an applicable corporation, the tentative minimum tax for the taxable year shall be zero.

(3) Maximum rate of tax on net capital gain of noncorporate taxpayers The amount determined under the first sentence of paragraph (1)(A) shall not exceed the sum of— (A) the amount determined under such first sentence computed at the rates and in the same manner as if this paragraph had not been enacted on the taxable excess reduced by the lesser of— (i) the net capital gain; or (ii) the sum of— (I) the adjusted net capital gain, plus (II) the unrecaptured section 1250 gain, plus (B) 0 percent of so much of the adjusted net capital gain (or, if less, taxable excess) as does not exceed an amount equal to the excess described in section 1(h)(1)(B), plus (C) 15 percent of the lesser of— (i) so much of the adjusted net capital gain (or, if less, taxable excess) as exceeds the amount on which tax is determined under subparagraph (B), or (ii) the excess described in section 1(h)(1)(C)(ii), plus (D) 20 percent of the adjusted net capital gain (or, if less, taxable excess) in excess of the sum of the amounts on which tax is determined under subparagraphs (B) and (C), plus (E) 25 percent of the amount of taxable excess in excess of the sum of the amounts on which tax is determined under the preceding subparagraphs of this paragraph. Terms used in this paragraph which are also used in section 1(h) shall have the respective meanings given such terms by section 1(h) but computed with the adjustments under this part.