Instructions For Form 6251 - Alternative Minimum Tax-Individuals

2 0

Department of the Treasury

Internal Revenue Service

Instructions for Form 6251

(Rev. April 2002)

Alternative Minimum Tax—Individuals

Section references are to the Internal Revenue Code.

credit, the nonconventional source

amount on line 21. Also, write “RPI”

General Instructions

fuel credit, or the credit for prior year

on the dotted line next to line 23.

minimum tax, or

Otherwise, do not change line 23.

•

The total of lines 7 through 14 is

Changes To Note

Note: If you are filing Form 1040NR,

negative and line 24 would exceed

•

An 8% capital gains tax rate

treat any reference in these

line 27 if you did not take lines 7

applies to qualified 5-year gain that

instructions or on Form 6251 to a line

through 14 into account.

would otherwise be taxed at 10%.

on Form 1040 as a reference to the

•

corresponding line on Form 1040NR.

The alternative minimum tax (AMT)

Recordkeeping

exemption amounts have been

increased.

For the AMT, certain items of income,

Credit for Prior Year

•

deductions, etc., receive different tax

The Job Creation and Worker

treatment than for the regular tax.

Minimum Tax

Assistance Act of 2002 (the “Act”)

Therefore, you need to refigure items

allows a special depreciation

See Form 8801, Credit for Prior Year

for the AMT that you figured for the

allowance for qualified property

Minimum Tax —Individuals, Estates,

regular tax. In some cases, you may

placed in service after September 10,

and Trusts, if you paid AMT for 2000

wish to do this by completing the

2001. No AMT adjustment is required

or you had a minimum tax credit

applicable tax form a second time. If

for any property that qualifies for the

carryforward on your 2000 Form

you do complete another form, do

special allowance. See What

8801. If you pay AMT for 2001, you

not attach it to your tax return (except

Depreciation Is Not Refigured for

may be able to take a credit on Form

for Form 1116, Foreign Tax Credit —

the AMT? on page 2.

•

8801 for 2002.

see the instructions for line 25 on

Under the Act, your 2001

page 7), but keep it for your records.

alternative tax net operating loss

Optional Write-Off for

deduction (ATNOLD) is generally

For the regular tax, some

limited to your alternative minimum

Certain Expenditures

deductions and credits may result in

taxable income (figured without

carrybacks or carryforwards to other

regard to the ATNOLD). For details

There is no AMT adjustment for the

tax years. Examples are investment

and exceptions, see the instructions

following items if you elect for the

interest expense, a net operating

for line 20 on page 6.

regular tax to deduct them ratably

loss, a capital loss, and the foreign

over the period of time shown.

tax credit. Because you may have to

Note: As a result of the two changes

•

Circulation expenditures —3 years

made by the Act, these 2001

refigure these items for the AMT, the

(section 173).

carryback or carryforward amount

Instructions for Form 6251 have been

•

Research and experimental

revised. No changes have been

may be different for the AMT than for

expenditures —10 years (section

the regular tax. Therefore, you must

made to the 2001 Form 6251. If either

174(a)).

change made by the Act affects your

keep records of these different

•

amounts.

2001 AMT liability and you already

Mining exploration and

filed your tax return, you must file an

development costs —10 years

amended return.

(sections 616(a) and 617(a)).

Partners and

•

Intangible drilling costs —60

Purpose of Form

Shareholders

months (section 263(c)).

The tax laws give special treatment to

If you are a partner in a partnership

See section 59(e) for more details.

some types of income, allow special

or a shareholder in an S corporation,

deductions for some types of

see Schedule K-1 and its instructions

expenses, and allow credits to certain

to figure your adjustments or

Specific Instructions

taxpayers. These laws enable some

preferences from the partnership or S

taxpayers with substantial economic

corporation to include on Form 6251.

Your regular tax may be

income to significantly reduce their

smaller if you claim a standard

regular tax. The AMT ensures that

Nonresident Aliens

deduction on Form 1040

CAUTION

these taxpayers pay at least a

instead of itemizing deductions.

If you are a nonresident alien and you

minimum amount of tax. Use Form

However, if you owe AMT, the

disposed of U.S. real property

6251 to figure the amount, if any, of

amount of your total tax (regular tax

interests at a gain, you must make a

your AMT and to figure any credit

plus AMT) may be smaller if you

special computation. Fill in Form

limitations (see below).

itemize your deductions on both Form

6251 through line 23. If your net gain

1040 and Form 6251. You may not

from the disposition of U.S. real

Who Must File

use the standard deduction to

property interests and the amount on

Attach Form 6251 to your return if:

complete Form 1040 and also use

line 21 are both greater than the

•

Line 24 is greater than line 27,

itemized deductions to complete

tentative amount you figured for line

•

Form 6251.

You claim any general business

23, replace the amount on line 23

credit, the qualified electric vehicle

with the smaller of that net gain or the

Cat. No. 64277P

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2001

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