CRA confirms that AMT carryforward amounts cannot be utilized to reduce TOSI tax

S. 120.2(1) generally provides for the generation of a credit from the carryforward of an AMT amount based on the the extent of the excess of the Part I taxes for relevant subsequent year excluding TOSI taxes (and other amounts) over the AMT amount for that year. CRA confirmed that the effect of this TOSI exclusion in the computation is that if the only reason that there was an excess of Part I taxes over AMT in the subsequent year was because of TOSI tax, no application of the AMT carryforward could occur in that year – even if the reason for the AMT carryforward amount was the realization of TOSI in the earlier year.

Neal Armstrong. Summary of 7 May 2024 CALU Roundtable Q. 11, 2024-1005801C6 under s. 120.2(1).