Instructions For Form 6251 - Alternative Minimum Tax-Individuals

Part I—Alternative

Step 1. Follow the Form 4952

basis limitations apply. Take this

instructions for line 1, but also include

adjustment into account on line 14h.

•

Minimum Taxable

the following amounts when

A tax shelter farm activity. Take

completing line 1.

this adjustment into account on line

Income (AMTI)

•

Any interest expense on line 4 of

14n.

To avoid duplication, any

Form 6251 that was paid or accrued

What Depreciation Must Be

adjustment or preference for

on indebtedness attributable to

Refigured for the AMT?

line 5, 11, 14h, or 14n must

property held for investment within

CAUTION

not be taken into account in figuring

Generally, you must refigure

the meaning of section 163(d)(5).

the amount to enter for any other

depreciation for the AMT, including

Example. Interest on a home

adjustment or preference.

depreciation allocable to inventory

equity loan whose proceeds were

costs, for:

invested in stocks or bonds.

•

Property placed in service after

Any interest that would have been

Line 3—Taxes

1998 that is depreciated for the

deductible if interest earned on

regular tax using the 200% declining

Do not include any

private activity bonds issued after

balance method (generally 3-, 5-, 7-,

generation-skipping transfer taxes on

August 7, 1986, had been includible

and 10-year property under the

income distributions.

in gross income.

modified accelerated cost recovery

Line 4—Certain Home

system (MACRS));

•

Step 2. Enter your AMT disallowed

Section 1250 property placed in

Mortgage Interest

investment interest expense from

service after 1998 that is not

Include on this line home mortgage

2000 on line 2. Complete line 3.

depreciated for the regular tax using

interest from line 10, 11, or 12 of

Step 3. When completing Part II,

the straight line method; and

Schedule A (Form 1040) except for

•

refigure the following amounts, taking

Tangible property placed in service

interest on a mortgage whose

into account all adjustments and

after 1986 and before 1999 (if the

proceeds were used to:

preferences.

transitional election was made under

•

1. Buy, build, or substantially

Gross income from property held

section 203(a)(1)(B) of the Tax

improve (a) your main home or (b)

for investment.

Reform Act of 1986, this rule applies

•

your second home that is a qualified

Net gain from the disposition of

to property placed in service after

dwelling (as defined below) or

property held for investment.

July 31, 1986).

•

2. Refinance a mortgage that

Investment expenses.

What Depreciation Is Not

meets the requirements of 1 above,

Include any interest income and

Refigured for the AMT?

but only to the extent that the

investment expenses from private

refinanced amount did not exceed the

activity bonds issued after August 7,

Do not refigure depreciation for the

balance of that mortgage immediately

1986.

AMT for the following.

•

before the refinancing.

Residential rental property placed

Step 4. Complete Part III.

in service after 1998.

Enter on line 7 the difference

•

Exception. If the mortgage was

Nonresidential real property with a

between line 8 of your AMT Form

taken out before July 1, 1982, do not

class life of 27.5 years or more

4952 and line 8 of your regular tax

include interest on the mortgage if it

placed in service after 1998 that is

Form 4952. If your AMT expense is

was secured by property that was

depreciated for the regular tax using

greater, enter the difference as a

your main home or a qualified

the straight line method.

negative amount.

•

dwelling used by you or a member of

Other section 1250 property placed

Note: If you did not itemize

your family at the time the mortgage

in service after 1998 that is

deductions and you had investment

was taken out. See section 56(e)(3).

depreciated for the regular tax using

interest expense, do not enter an

the straight line method.

A qualified dwelling is any house,

•

amount on line 7 unless you reported

Property (other than section 1250

apartment, condominium, or mobile

investment interest expense on

property) placed in service after 1998

home not used on a transient basis.

Schedule E. If you did, follow the

that is depreciated for the regular tax

steps above for completing Form

Line 6—Refund of Taxes

using the 150% declining balance

4952. Allocate the investment interest

method or the straight line method.

Include any refund from line 10 of

expense allowed on line 8 of the AMT

•

Property for which you elected to

Form 1040 that is attributable to state

Form 4952 in the same way you did

use the alternative depreciation

or local income taxes deducted after

for the regular tax. Enter on line 7 the

system (ADS) of section 168(g) for

1986.

difference between the amount

the regular tax.

allowed on Schedule E for the regular

•

Also include any refunds received

Property that is qualified property

tax and the amount allowed on

in 2001 and included in income on

under section 168(k)(2) (property

Schedule E for the AMT.

Form 1040, line 21, that are

eligible for the special depreciation

attributable to state or local personal

allowance). The special allowance is

Line 8—Post-1986

property taxes, foreign income taxes,

deductible for the AMT, and there

Depreciation

or state, local, or foreign real property

also is no adjustment required for any

This section describes when

taxes deducted after 1986. If you

depreciation figured on the remaining

depreciation must be refigured for the

include such amounts, you must

basis of the qualified property.

AMT and how to figure the amount to

write a description and the amount

Property for which an election is in

enter on line 8.

next to the entry space for line 6. For

effect under section 168(k)(2)(C)(iii)

example, if you include a refund of

Do not use line 8 for depreciation

to not have the special allowance

real property taxes, write “real

related to the following.

apply is not qualified property. See

•

property” and the amount next to the

Employee business expenses

the Instructions for Form 4562 for the

entry space.

claimed on line 20 of Schedule A

definition of qualified property.

•

(Form 1040). Take this adjustment

Any part of the cost of any property

Line 7—Investment Interest

into account on line 5.

for which you made the election

•

If you completed Form 4952,

Passive activities. Take this

under section 179 to treat the cost of

Investment Interest Expense

adjustment into account on line 11.

the property as a deductible expense.

•

Deduction, figure your AMT

An activity for which you are not at

The reduction to the depreciable

investment interest expense on

risk or income or loss from a

basis of section 179 property by the

another Form 4952 as follows.

partnership or an S corporation if the

amount of the section 179 expense

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Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2001 Page 2

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