CAMT and purchased §48E tax credits: what corporate tax teams check

The corporate alternative minimum tax (CAMT) is a 15% minimum tax on adjusted financial statement income (AFSI) that applies only to very large corporations. If your company is, or may become, an applicable corporation, two questions matter before you buy a §48E credit: can the credit reduce CAMT, and does the purchase itself change AFSI? This page walks through both, using the statute and the proposed regulations.

Most C corporations are not subject to CAMT. For them, the §38(c) general business credit limit against regular tax is what sets credit capacity.

Who CAMT applies to

Test	Rule	Source
General test	Average annual AFSI over $1 billion for the three taxable years ending with the current year (aggregating certain related entities).	IRC §59(k)(1)(B)(i)
Foreign-parented groups	A U.S. member of a foreign-parented multinational group meets the test if the group clears $1 billion and the U.S. corporation's own average AFSI is $100 million or more.	IRC §59(k)(1)(B)(ii)
Excluded entities	S corporations, regulated investment companies and REITs are not applicable corporations.	IRC §59(k)(1)(A)
The tax	Tentative minimum tax is 15% of AFSI less the CAMT foreign tax credit; CAMT is the excess of that amount over regular tax plus any BEAT.	IRC §55(a), §55(b)(2)

For status testing, Notice 2025-27 lets a corporation use an interim simplified method; the IRS lists the reliance options in the Form 4626 instructions.

Can a purchased §48E credit reduce CAMT?

Generally yes, within the general business credit limit. A transferee treats a purchased §48E credit as its own general business credit (§6418(a)). Under §38(c)(1), the credit is limited by "net income tax," which is defined to include the tax imposed by §55, so CAMT is in the base. For corporations, §38(c)(6)(E) sets the limit at net income tax minus 25% of net income tax above $25,000. In plain terms, general business credits can offset roughly 75% of regular tax plus CAMT combined, and the rest carries back or forward under §39.

Illustration (hypothetical)	Amount
Regular tax before credits	$40,000,000
CAMT (excess of tentative minimum tax over regular tax)	$10,000,000
Net income tax (before general business credits)	$50,000,000
25% of the amount over $25,000	$12,493,750
Maximum general business credits usable this year	$37,506,250

This ignores foreign tax credits, other credits already on the return and the §38(d) ordering rules, so your CPA has to run your real numbers. Credits your company already generates (research, other energy credits, carryforwards) use the same capacity. That is why we ask for the §38(c) capacity figure before talking about credit block size.

Does buying the credit change AFSI?

Under the 2024 proposed CAMT regulations, proposed Treas. Reg. §1.56A-12(c) says a transferee that is a CAMT entity adjusts AFSI to disregard:

• the cash it paid the seller for the credit, matching the regular-tax rule in §6418(b)(3) that the payment is not deductible; and
• any increase in its financial statement income that results from using the credit. In practice that covers the book benefit of buying below face value.

Proposed §1.56A-12(d) also disregards the book expense from a recapture tax increase under §6418(g)(3) or §50(a)(3). On the seller side, §56A(c)(9) excludes amounts that §6418 keeps out of gross income.

These are proposed rules. Notice 2025-49 says taxpayers may rely on a section of the CAMT proposed regulations for earlier taxable years if they follow that section consistently and in its entirety. Notice 2025-27 applies the same disregard rules for transferees under its simplified method for testing applicable corporation status. Confirm with your tax provider which reliance path your company uses.

Minimum tax credit carryforward

CAMT paid generally creates a minimum tax credit under §53 that can be used in later years, subject to its own limits. Using a purchased §48E credit this year affects both the current CAMT and how much minimum tax credit carries forward, so model at least two years together.

Checklist for an applicable corporation buying §48E credits

• Status: confirm applicable corporation status and the AFSI forecast for the year the credit will be used.
• Capacity: run §38(c) with regular tax plus CAMT, existing credits and carryforwards.
• Timing: under §6418(d), you take the credit into account in your first taxable year ending with or after the seller's taxable year in which the credit was determined. For §48E, that is generally the year the facility is placed in service.
• Estimated tax: the IRS FAQs allow a transferee to factor a credit it has purchased or intends to purchase into estimated payments. See estimated tax with transferable credits.
• Book side: align the ASC 740 treatment with the AFSI adjustments. See accounting for purchased credits.
• Recapture: a §48E credit carries five-year recapture that the buyer bears under §6418(g)(3). Agreement protections are covered in indemnity and insurance terms.

What to be careful of

• Final CAMT regulations may differ from the proposed rules. Watch for changes before relying on a multi-year model.
• A corporation near the $1 billion line can move in or out of CAMT. A purchase sized for one scenario may be oversized in the other.
• CAMT does not change the transfer rules: you still need the seller's registration number, a transfer election statement and payment in cash. See the §48E diligence checklist.

Related: §48E for C corporations · CPA guide to §48E transfers.

Educational information only, not tax, legal or investment advice, and no outcome is promised. Rules and figures were checked against the cited sources on November 2, 2026; they change, so confirm with your CPA and counsel before acting. Market figures are third-party data and are not Veritas quotes. See our disclaimer.