Every small, medium and large American business is waiting to see what the "lame duck" congress will be doing about extending the Bush tax cuts, and in particular the AMT which is of concern, because of its potential for double taxation.

We go back to the Tax Reform Act of 1986 when Congress targeted small to medium sized businesses that were reducing their overall tax liability by taking depreciation on equipment they had purchased. Companies that have taken depreciation of equipment to lower their tax bill may be subject to reclassifying a portion of those depreciation write-downs as "tax preferences" and exposing those same companies to an additional tax called "Alternative Minimum Tax" to be paid in addition to taxes they would otherwise owe. The trigger is owning, or buying too much equipment to lower the normal tax component.

Don't despair, equipment lease payments that are treated as rentals do not qualify as tax preference items and have no adverse effect on AMT liability.