ParentCo owns all of the stock of DaughterCo, and the group files its Federal income tax returns on a consolidated basis. Both taxpayers are subject to the AMT this year due to active operations in oil and gas development. No intercompany transactions were incurred this year. If the affiliates filed separate returns, they would report the following amounts.

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Adjusted Current Earnings (ACE) $1,600,000 AMT Income before the ACE Adjustment $1,000,000 Company ParentCo DaughterCo Totals 250,000 400,000 $1,850,000 $1,400,000