I am at an S corp. Our 2006 1120S K-1's show alternative minimum tax that is quite large, and well in excess of ordinary business income. The AMT was derived by taking Gross profit on our Accrual based P & L less Gross profit on our Cash based Tax return (line 3).
Is it typical to use this calculation using margin before overhead allocation?
This is an issue this year, because it puts a large "income" to each owner. Our ordinary business income amount is $62K, while our AMT is 800K - - split between two owners.