Instructions For Form 6251 - Alternative Minimum Tax-Individuals

If you had a loss on property for

trade or business), 8 through 11, or

Line 16

which research and experimental

14a through 14n, you may have to

If Form 1040, line 39, includes a

costs have not been fully amortized

refigure any item of income or

write-in amount (such as a capital

for the AMT, your AMT deduction is

deduction based on a limit of income

construction fund deduction for

the smaller of (a) the loss allowable

other than AGI or modified AGI.

commercial fishermen), add lines 38

for the costs had they remained

and 39 of Form 1040 and enter that

Affected items include the

capitalized or (b) the remaining costs

result on line 16 instead of the

following.

to be amortized for the AMT.

•

amount from Form 1040, line 37. If

Section 179 expense deduction

Line 14m—Section 1202

your taxable income includes an

(Form 4562, line 12).

•

amount from the alcohol fuel credit

Exclusion

Expenses for business or rental

under section 87, reduce line 16 by

If you claimed the exclusion under

use of your home.

the amount of the credit included in

•

section 1202 for gain on qualified

Conservation expenses (Schedule

income.

small business stock held more than

F, line 14).

•

5 years, multiply the excluded gain

Line 20—Alternative Tax Net

Taxable IRA distributions (Form

(as shown on Schedule D (Form

Operating Loss Deduction

1040, line 15b), if prior year IRA

1040)) by 42% (.42). Enter the result

deductions were different for the AMT

(ATNOLD)

as a positive amount.

and the regular tax.

The ATNOLD is the sum of the

•

Line 14n—Tax Shelter Farm

Self-employed health insurance

alternative tax net operating loss

Activities

deduction (Form 1040, line 28).

(ATNOL) carryovers and carrybacks

•

Self-employed SEP, SIMPLE, and

Figure this adjustment only if you

to the tax year, subject to the

qualified plans deduction (Form 1040,

have a gain or loss from a tax shelter

limitation explained below. Figure

line 29).

farm activity (as defined in section

your ATNOLD as follows:

•

58(a)(2)) that is not a passive activity.

IRA deduction (Form 1040, line

For loss years beginning after

If the activity is passive, you must

23), affected by the earned income

1986, your ATNOL is the excess of

include it with your other passive

limitation of section 219(b)(1)(B).

the deductions allowed for figuring

activities on line 11.

Figure the difference between the

AMTI (excluding the ATNOLD) over

AMT and regular tax amount for each

Refigure all gains and losses you

the income included in AMTI. Figure

item. Combine the amounts for all

reported for the regular tax from tax

this excess with the modifications in

your related adjustments and enter

shelter farm activities by taking into

section 172(d), taking into account

the total on line 14o. Keep a copy of

account any AMT adjustments and

the adjustments in sections 56 and 58

all computations for your records,

preferences. Determine your tax

and preferences in section 57 (that is,

including any AMT carryover and

shelter farm activity gain or loss for

the section 172(d) modifications must

basis amounts.

the AMT using the same rules you

be separately figured for the ATNOL).

used for the regular tax with the

For example, the limitation of

Note: Do not include on line 14o any

following modifications. No refigured

nonbusiness deductions to the

adjustment for an item you refigured

loss is allowed, except to the extent

amount of nonbusiness income must

on another line of this form (for

you are insolvent (see section

be separately figured for the ATNOL,

example, line 14b).

58(c)(1)). A refigured loss may not be

using only nonbusiness income and

Example. On your Schedule C

used in the current tax year to offset

deductions that are included in AMTI.

(Form 1040) you have a net profit of

gains from other tax shelter farm

For loss years beginning before

$9,000 before figuring your section

activities. Instead, any refigured loss

1987, your ATNOL is your ATNOL

179 deduction (and you do not report

must be suspended and carried

carryover to 1987.

any other business income on your

forward indefinitely until (a) you have

For 2001, your ATNOLD is

return). During the year, you

a gain in a subsequent tax year from

generally limited to your AMTI

purchased an asset for $10,000 for

that same activity or (b) you dispose

(figured without regard to the

which you elect to take the section

of the activity.

ATNOLD). However, if an ATNOL is

179 deduction. You also have an

The AMT amount of any tax

carried back to 2001 from a tax year

AMT depreciation adjustment of $700

shelter farm activity loss that is not

after 2002, or for ATNOLs carried

for other assets depreciated on your

deductible and is carried forward is

back from 2001 to a prior tax year,

Schedule C.

likely to differ from the regular tax

the ATNOLD for the tax year is

amount. Therefore, keep adequate

Your section 179 deduction for the

limited to the sum of:

records for both the AMT and regular

regular tax is limited to your net profit

1. The smaller of:

tax.

(before any section 179 deduction) of

a. The sum of the ATNOL

$9,000. The $1,000 excess is a

Enter the difference between the

carrybacks to the tax year from tax

section 179 deduction carryforward

amount that would be reported for the

years before 2001 or after 2002 and

for the regular tax.

activity on Schedule E or F or Form

the ATNOL carryforwards to the tax

4835 for the AMT and the regular tax

year (unless the tax year is 2001) or

For the AMT, your net profit is

amount. If (a) the AMT loss is more

b. Ninety percent of AMTI for the

$9,700, and you are allowed a

than the regular tax loss, (b) the AMT

section 179 deduction of $9,700 for

tax year (figured without regard to the

gain is less than the regular tax gain,

the AMT. You have a section 179

ATNOLD), plus

or (c) you have an AMT loss and a

deduction carryforward of $300 for

2. The smaller of:

regular tax gain, enter the adjustment

the AMT.

a. The sum of the ATNOL

as a negative amount.

carrybacks to the tax year from 2001

You include a $700 negative

Enter any adjustment for amounts

or 2002 and the ATNOL

adjustment on line 14o because your

reported on Schedule D, Form 4684,

carryforwards to the tax year (if the

section 179 deduction for the AMT is

or Form 4797 for the activity on line 9

tax year is 2001) or

$700 greater than your allowable

instead. See the instructions for line 9

b. AMTI for the tax year (figured

regular tax deduction. In the following

on page 3.

without regard to the ATNOLD)

year, when you use the $1,000

reduced by the amount determined

Line 14o—Related Adjustments

regular tax carryforward, you will

under 1 above.

If you have an entry on line 7

have a $700 positive related

(because you deducted investment

adjustment for the AMT because your

To figure your AMTI without regard

AMT carryforward is only $300.

interest allocable to an interest in a

to the ATNOLD, first figure a tentative

-6-

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2001 Page 6

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