Instructions For Form 6251 - Alternative Minimum Tax-Individuals

Line 14d—Installment Sales

benefit from this exception is not

records for both the AMT and regular

limited).

tax.

The installment method does not

apply for the AMT to any nondealer

Enter any adjustment for amounts

Line 14f—Large Partnerships

disposition of property after August

reported on Schedule D, Form 4684,

If you were a partner in an electing

16, 1986, but before January 1, 1987,

or Form 4797 for the activity on line 9

large partnership, enter the amount

if an installment obligation to which

instead. See the instructions for line 9

from Schedule K-1 (Form 1065-B),

the proportionate disallowance rule

on page 3.

box 6. Take into account any amount

applied arose from the disposition.

from box 5 on Form 6251, line 11.

Line 14i—Mining Costs

Enter as a negative amount on line

14d the amount of installment sale

Line 14g—Long-Term

Note: Do not make this adjustment

income reported for the regular tax.

for costs for which you elected the

Contracts

optional 10-year write-off for the

Line 14e—Intangible Drilling

For the AMT, you generally must use

regular tax.

the percentage-of-completion method

Costs (IDCs)

Mining exploration and

described in section 460(b) to

Note: Do not make this adjustment

determine your income from any

development costs deducted in full in

for costs for which you elected the

long-term contract (defined in section

the tax year they were paid or

optional 60-month write-off for the

460(f)). However, this rule does not

incurred for the regular tax must be

regular tax.

capitalized and amortized over 10

apply to any home construction

IDCs from oil, gas, and geothermal

years for the AMT. Enter the

contract (as defined in section

wells are a preference to the extent

difference between the regular tax

460(e)(6)). For contracts excepted

that the excess IDCs exceed 65% of

and AMT deduction. If the AMT

from the percentage-of-completion

the net income from the wells. Figure

deduction is greater, enter the

method for the regular tax by section

the preference for all oil and gas

460(e)(1), you must use the simplified

difference as a negative amount.

properties separately from the

procedures for allocating costs

If you had a loss on property for

preference for all geothermal

outlined in section 460(b)(3) to

which mining costs have not been

properties.

determine the percentage of

fully amortized for the AMT, your

completion.

Figure excess IDCs as follows.

AMT deduction is the smaller of (a)

Enter the difference between the

the loss allowable for the costs had

Step 1. Determine the amount of

AMT and regular tax income. If the

they remained capitalized or (b) the

your IDCs allowed for the regular tax

AMT income is smaller, enter the

remaining costs to be amortized for

under section 263(c), but do not

difference as a negative amount.

the AMT.

include any section 263(c) deduction

for nonproductive wells.

Note: If you are required to use the

Line 14j—Patron’s Adjustment

percentage-of-completion method for

Step 2. Subtract the amount that

Distributions you received from a

either the regular tax or the AMT, you

would have been allowed had you

cooperative may be includible in

may owe or be entitled to a refund of

amortized these IDCs over a

income. Unless the distributions are

interest for the tax year the contract is

120-month period starting with the

nontaxable, enter on line 14j the total

completed or adjusted. For details,

month the well was placed in

AMT patronage dividend adjustment

see Form 8697, Interest Computation

production.

reported to you by the cooperative.

Under the Look-Back Method for

Note: If you prefer not to use the

Completed Long-Term Contracts.

Line 14k—Pollution Control

120-month period, you may elect to

Facilities

Line 14h—Loss Limitations

use any method that is permissible in

The section 169 election to amortize

For passive activities, see the line 11

determining cost depletion.

the basis of a certified pollution

instructions on page 4 instead. For

Determine net income by

control facility over a 60-month period

tax shelter farm activities (that are not

reducing the gross income that you

is not available for the AMT. For

passive), see the line 14n instructions

received or accrued during the tax

facilities placed in service before

on page 6.

year from all oil, gas, and geothermal

1999, figure the AMT deduction using

wells by the deductions allocable to

Refigure your gains and losses

ADS. For facilities placed in service

those wells (reduced by the excess

from activities for which you are not at

after 1998, figure the AMT deduction

IDCs). When refiguring net income,

risk and basis limitations applicable to

under MACRS using the straight line

use only income and deductions

partnerships and S corporations by

method. Enter the difference between

allowed for the AMT.

taking into account all AMT

the regular tax and AMT deduction. If

adjustments and preferences that

Exception. The preference for IDCs

the AMT amount is greater, enter the

apply. See sections 59(h), 465,

from oil and gas wells does not apply

difference as a negative amount.

704(d), and 1366(d).

to taxpayers who are independent

Line 14l—Research and

producers (that is, not integrated oil

Enter the difference between the

Experimental

companies as defined in section

amount that would be reported for the

291(b)(4)). However, this benefit may

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

Note: Do not make this adjustment

be limited. First, figure the IDC

or Form 4835 for the AMT and the

for costs paid or incurred in

preference as if this exception did not

regular tax amount. If (a) the AMT

connection with an activity in which

apply. Then, for purposes of this

loss is more than the regular tax loss,

you materially participated under the

exception, complete Form 6251

(b) the AMT gain is less than the

passive activity rules or for costs for

through line 19, including the IDC

regular tax gain, or (c) you have an

which you elected the optional

preference.

AMT loss and a regular tax gain,

10-year write-off for the regular tax.

enter the adjustment as a negative

If the amount of the IDC

Research and experimental costs

amount.

preference exceeds 40% of the

deducted in full in the tax year they

amount figured for line 19, enter the

The AMT amount of any gain or

were paid or incurred for the regular

excess on line 14e (your benefit from

loss from activities for which you are

tax must be capitalized and amortized

this exception is limited). If the

not at risk is likely to differ from the

over 10 years for the AMT. Enter the

amount of the IDC preference is

regular tax amount. Your AMT basis

difference between the regular tax

equal to or less than 40% of the

in partnerships and S corporations is

and AMT deduction. If the AMT

amount figured for line 19, do not

also likely to differ from your regular

deduction is greater, enter the

enter an amount on line 14e (your

tax basis. Therefore, keep adequate

difference as a negative amount.

-5-

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2001 Page 5

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