Tax
Compulsory charges levied by a governmental unit for the purpose of raising revenue.
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Alternative Minimum Tax (“AMT”)
An additional income Tax under the Code that applies in certain instances for individuals and in a different way to certain large corporations. Interest on Governmental Bonds issued as Tax-Exempt Bonds is generally excluded from the Alternative Minimum Tax, although corporations must include the Interest in certain calculations. However, Interest on qualified Private Activity Bonds (PAB) (other than Qualified 501(c)(3) Bonds and certain other PABs) is included as income by taxpayers in calculating the AMT.
See Also
Tax-Exempt Bonds
A bond, the interest on which is excludable from gross income for federal income tax purposes.
Private Activity Bond (PAB)
The term used in the Code to describe any bond issued as part of a bond issue that meets both of the private business tests or meets the private loan financing test.
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Flow of Funds
A term referring to the order of priority of the receipt, deposit, transfer and application of revenues in the funds and accounts created in an indenture or a bond resolution and may also refer to a document prepared by an underwriter or municipal advisor to show the sources and deposits at the closing.