The maximum tax rate on long-term capital gains was increased to 28 percent.įrom 1969 through 1986, corporations were also subject to an “add-on minimum tax” on certain “tax preference” items (such as percentage depletion, accelerated depreciation) above a certain amount. Includes a 2.5 percent Vietnam War surcharge. The maximum tax rate on long-term capital gains was increased to 30 percent. The holding period for long-term capital gain treatment of assets was increased from 6 months to 9 months in 1977 and 12 months in 1978.

The maximum tax rate on long-term capital gains was 28 percent.īeginning in 1983, incorporated professional practices (“personal service corporations”) have been taxed on all taxable income at the corporate tax rate applicable to the highest income bracket. The maximum capital gain rate was raised to 35 percent when the highest corporate rate bracket was increased in 1993. The maximum tax rate on capital gains was capped at 34 percent for 1987, which was to be the rate on the highest corporate tax bracket in 1988 and after, according to TRA86. In 1998, “small” corporations (generally, those with average gross receipts of less than $5 million) were exempted from the AMT. AMT in excess of regular tax could be carried over as a credit against regular tax in future years. The $40,000 exemption was reduced by 25 percent of the excess of AMTI over $150,000. The tax was 20 percent of the excess of this “alternative minimum taxable income” (AMTI) over $40,000. It required a calculation of an alternative measure of taxable income that reduced or eliminated many tax preference items. The Tax Reform Act of 1986 (TRA86) established a new rate structure effective for Tax Year 1988 and made the rates for Transition Year 1987 an average of the pre-TRA rates for 1986 and the post-TRA rates for 1988.Ī new “alternative minimum tax” (AMT) replaced the add-on minimum tax, effective in 1987. Million are subject to an additional tax of The Revenue Reconciliation Act of 1993 increased the maximum corporate tax rate to 35% for corporations withĬorporations with taxable income over $15 115-97) replaced the graduated corporate tax structure with a flat 21% corporate tax rate. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax.įor tax years beginning after 2017, the Tax Cuts and Jobs Act (P.L.

Historical Federal Corporate Income Tax A corporate income tax (CIT) is levied by federal and state governments on business profits.

Tax bracket 2018