Instructions For Form 6251 - Alternative Minimum Tax-Individuals

Increase your AMT basis in any

Tax Shelter Passive Farm

the regular tax and AMT deduction. If

stock acquired through the exercise

the AMT deduction is greater, enter

Activities

of an ISO by the amount of the

the difference as a negative amount.

Refigure any gain or loss from a tax

adjustment. Keep adequate records

shelter passive farm activity taking

If you had a loss on property for

for both the AMT and regular tax so

into account all AMT adjustments and

which circulation expenditures have

that you may figure your adjusted

preferences and any AMT prior year

not been fully amortized for the AMT,

gain or loss in the year you sell the

unallowed losses. If the amount is a

your AMT deduction is the smaller of

stock. See the instructions for line 9.

gain, include it on the AMT Form

(a) the amount of the loss allowable

8582. If the amount is a loss, do not

for the expenditures had they

Line 11—Passive Activities

include it on the AMT Form 8582.

remained capitalized or (b) the

Your passive activity gains and

Carry the loss forward to 2002 to see

remaining expenditures to be

losses must be refigured for the AMT

if you have a gain or loss from tax

amortized for the AMT.

by taking into account all adjustments

shelter passive farm activities for

Line 14b—Depletion

and preferences and any AMT prior

2002.

year unallowed losses that apply to

You must refigure your depletion

Insolvency

deduction for the AMT. To do so, use

that activity. You may fill out a second

If at the end of the tax year your

only income and deductions allowed

Form 8582, Passive Activity Loss

liabilities exceed the fair market value

Limitations, and the other forms or

for the AMT when refiguring the limit

of your assets, increase your passive

schedules on which your passive

based on taxable income from the

activity loss allowed by that excess

activities are reported, to determine

property under section 613(a) and the

(but not by more than your total loss).

limit based on taxable income, with

your passive activity loss allowed for

See section 58(c)(1).

certain adjustments, under section

the AMT, but do not file the second

set of forms and schedules with your

613A(d)(1). Also, your depletion

Line 13—Tax-Exempt

tax return.

deduction for mines, wells, and other

Interest Income From Private

natural deposits under section 611 is

Example. Assume you are a

limited to the property’s adjusted

Activity Bonds

partner in a partnership and the

basis at the end of the year, as

Enter on line 13 interest you earned

Schedule K-1 (Form 1065) you

refigured for the AMT, unless you are

on “specified private activity bonds”

received shows the following.

an independent producer or royalty

•

reduced (but not below zero) by any

A passive activity loss of $4,125,

owner claiming percentage depletion

•

deduction that would have been

A depreciation adjustment of $500

for oil and gas wells under section

allowable if the interest were

on post-1986 property, and

613A(c). Figure this limit separately

•

includible in gross income for the

An adjustment of $225 for adjusted

for each property. When refiguring

regular tax. Generally, the term

gain or loss.

the property’s adjusted basis, take

“specified private activity bond”

Because the two adjustments

into account any AMT adjustments

means any private activity bond (as

above are not allowed for the AMT,

you made this year or in previous

defined in section 141) issued after

you must first reduce the passive

years that affect basis (other than

August 7, 1986. See section 57(a)(5)

activity loss by those amounts. The

current year depletion).

for exceptions and more details.

result is a passive activity loss for the

Enter the difference between the

AMT of $3,400. You then enter this

Exempt-interest dividends paid by

regular tax and AMT deduction. If the

amount on Worksheet 2 of the AMT

a regulated investment company are

AMT deduction is greater, enter the

Form 8582 and refigure the allowable

treated as interest income on

difference as a negative amount.

passive activity loss for the AMT.

specified private activity bonds to the

extent the dividends are attributable

Line 14c—Depreciation

Note: The amount of any AMT

to interest on the bonds received by

(Pre-1987)

passive activity loss that is not

the company, minus an allocable

deductible and is carried forward is

For the AMT, you must use the

share of the expenses paid or

likely to differ from the regular tax

straight line method to figure

incurred by the company in earning

amount, if any. Therefore, keep

depreciation on real property for

the interest.

adequate records for both the AMT

which accelerated depreciation was

If you are filing Form 8814,

and regular tax.

determined using pre-1987 rules. Use

Parents’ Election To Report Child’s

a recovery period of 19 years for

Enter the difference between the

Interest and Dividends, any

19-year real property and 15 years for

amount that would be reported for the

tax-exempt interest income from line

low-income housing.

activity on Schedule C, C-EZ, E, or F

1b of that form that is a preference

or Form 4835, Farm Rental Income

For leased personal property

item must be included on this line.

and Expenses, for the AMT and the

other than recovery property, enter

regular tax amount. If (a) the AMT

Line 14—Other Adjustments

the amount by which your regular tax

loss is more than the regular tax loss,

depreciation using the pre-1987 rules

and Preferences

(b) the AMT gain is less than the

exceeds the depreciation allowable

Enter the amounts of any other

regular tax gain, or (c) you have an

using the straight line method.

adjustments or preferences that apply

AMT loss and a regular tax gain,

For leased 10-year recovery

to you on lines 14a through 14o.

enter the adjustment as a negative

property and leased 15-year public

Enter the total on line 14.

amount.

utility property, enter the amount by

Line 14a—Circulation

which your regular tax depreciation

Enter any adjustment for amounts

Expenditures

exceeds the depreciation allowable

reported on Schedule D, Form 4684,

Note: Do not make this adjustment

using the straight line method with a

or Form 4797 for the activity on line 9

for expenditures for which you

half-year convention, no salvage

instead of line 11. See the

value, and a recovery period of 15

elected the optional 3-year write-off

instructions for line 9.

years (22 years for 15-year public

for the regular tax.

Publicly Traded Partnership

utility property).

For the regular tax, circulation

(PTP)

expenditures may be deducted in full

Figure the excess of the regular

If you had a loss from a PTP, refigure

when paid or incurred. For the AMT,

tax depreciation over the AMT

the loss using any AMT adjustments

these expenditures must be

depreciation separately for each

and preferences and any AMT prior

capitalized and amortized over 3

property and include on line 14c only

year unallowed loss.

years. Enter the difference between

positive amounts.

-4-

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2001 Page 4

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