AMT Recovery MissionStop AMT recurring and turn the carryforward into a refund
Clients paid alternative minimum tax after the 2024 reforms and were told it would come back. For many it hasnβt. A two-phase approach and around a dozen worked strategies to recover it before the seven-year carryforward expires.
How AMT recovery works in Canada
AMT paid in one year carries forward for seven years. In each later year you recover the lesser of regular tax minus AMT, or the carryforward still remaining. If AMT keeps recurring, there is nothing to recover against, and the carryforward expires as a permanent tax.
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The AMT year
AMT exceeds regular tax
The excess is paid and becomes an AMT carryforward.
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Years 1 to 7
Recover the lesser of two amounts
Regular tax minus AMT for the year, or the carryforward left.
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After year 7
Unused AMT expires
Whatever was not recovered becomes a permanent cost.
The job is to open that gap on purpose: pull AMT below regular tax without simply raising regular tax, and without pushing AMT into next year.
Your clients paid AMT and were told theyβd get it back. Many didnβt.
The 2024 changes broadened the base, lifted the rate and cut personal credits to 50%. Clients paid substantial AMT on the promise of recovery. Then 2025 arrived with no recovery, a tiny one, or more AMT, because the profile that triggered it once triggers it again. Left on autopilot, the carryforward runs out.
There is no prize in recovering AMT by increasing regular tax. The sweet spot is the overlap, and this seminar lives there.
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A two-phase mission
First stop AMT recurring, then recover what was paid. Start by diagnosing whether AMT was a one-off event or built into the client profile.
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Engineer the gap
Recovery is the lesser of two numbers. Learn to make the difference large, and repeat it every year until the carryforward is used up.
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A dozen worked strategies
Each example isolates one lever: multiplying the exemption, shifting the income mix, incorporating a portfolio, salary over dividends, spousal loans.
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Windows that close
A 2026-only capital loss carryback to a pre-2024 gain year, the seven-year countdown, AMT in the year of death, and departures from Canada.
What youβll learn
From why AMT recurs, through the clusters that cause it, into the core of the program: recovery strategies worked example by example, then the hard cases where recovery is limited or lost.
Why AMT is growing, not shrinking
- Why the 2024 reforms produce AMT that recurs: a broader base, a 20.5% rate and personal credits cut to 50%
- The stealth capital gains increase: 20.5% AMT sits 4% above the 16.5% federal rate on a gain, and 5% to 6% with provincial AMT everywhere except Quebec
- The overlap between regular planning and AMT planning, and why only moves inside it are worth making
- Diagnosing the cause first: a one-off event or intrinsic to the client profile
Regular tax vs. AMT, line by line
- How tax shelters, rental and other interest, investment counsel fees, dividends and employment expenses are treated under each system
- Capital gains at 100% inclusion for AMT, capital losses effectively 50%, the capital gains exemption and donated public stock at 30%, and the stock option deduction reduced to nil
- Rate, dividend tax credit, foreign tax credit, personal exemptions and the donation credit rate under each system
- Zoltan: how a $400,000 economic gain becomes a $1.2 million AMT inclusion, and why matching gains and losses in the same year matters
The clusters that cause AMT
- Large capital gains, net capital loss claims, interest and investment counsel fees, worst in combination
- Tax shelters financed with deductible interest
- Large stock option deductions, and how large they have to be to matter
- Large donations, especially of public stock, which aggravate AMT alongside other factors
- The rarer fifth cluster: large non-capital losses, including a real trust case where tens of millions in losses still triggered AMT
The three recovery strategies, worked through
- Multiply the AMT exemption: Vernon and Verity, where deliberately not splitting pension income raised annual recovery from $30,000 to $49,000
- Change the income mix without inflating regular tax: Stephen and Oliver switching eligible dividends to deductible salary, and Norman incorporating a portfolio to stop paying AMT entirely
- Realize capital gains in a holding company: a capital dividend, corporate tax paid, and a retained amount
- Ula and Uri: a $4 million spousal loan above the prescribed rate, no attribution, taking annual recovery from $4,000 to $29,000
- Why the strategies compound when combined
Strategies that donβt work, and why
- Tax moves that backfire: claiming a smaller capital loss, skipping interest or RRSP deductions, premature RRSP withdrawals
- Non-tax moves that backfire: reshaping a portfolio away from capital gains, or refusing to realize gains
- The income continuum: why salary, interest, pension and RRIF income recover AMT far better than eligible dividends
- Realizing gains and losses in the same year to avoid the carryforward and carryback treatment
The hard cases: death, departure, trusts and expiry
- AMT in the year of death: Norbert declines the spousal rollover to create a gain and recover $400,000
- Non-residents and part-year departures, and why holding Canadian real estate in a corporation may be the only real answer
- Trusts: no exemption and no salary, and three ideas, including a deliberate 75(2) reversion
- The seven-year expiry: Mitchell weighing a $2 million RRSP withdrawal to absorb an expiring $262,000 carryforward
- Provincial AMT lost on a change of province, and why Quebec sits outside the system
Taught by practising tax specialists
Michael Cadesky
Managing partner at Cadesky Tax and a contributor to the tax and accounting professions since 1980. Past governor of the Canadian Tax Foundation, past chair of STEP Canada and STEP Worldwide, and co-author of 11 books on tax.
Hugh Woolley
Independent tax consultant who has taught income tax for over 30 years. Has written courses for CPA Canada and more than 10 papers for the Canadian Tax Foundation and STEP Canada, and wrote butterfly rulings at the CRAβs Rulings Directorate.
Questions about AMT recovery and this course
How is AMT recovered in Canada?
AMT paid in a year can be carried forward for seven years. In a later year, the amount recovered is the lesser of regular tax minus AMT for that year, and the remaining AMT carryforward. If AMT is equal to or higher than regular tax, nothing is recovered.
How long can an AMT carryforward be used?
Seven years. Any AMT carryforward not recovered by the end of the seventh year expires, which effectively turns it into a permanent tax.
Who is this course for?
Canadian CPAs and tax practitioners with clients who paid AMT after the 2024 reforms, especially clients with large capital gains, tax shelters, stock option deductions, large donations or loss carryforwards.
Can I start right away?
Yes. AMT Recovery Mission was recorded live on June 4, 2026 and is available on demand. Register and start immediately.
Does this course provide verifiable CPD?
Yes. You receive a certificate of completion for 1.5 hours of verifiable CPD once you finish the program and the knowledge assessment.
What is included and how much does it cost?
Registration is $75 CAD, a one-time payment with no subscription. It includes the full seminar recording, the slides, a knowledge assessment and one year of access from the date of registration.
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