Instructions For Form 6251 - Alternative Minimum Tax-Individuals

amount for line 14b by treating line 20

(REMIC) in 2001, the amount you

rendered by the child, but not more

as if it were zero. Next, figure a

enter on line 21 may not be less than

than 30% of his or her share of the

tentative amount for line 19 using the

the amount on Schedule E, line 37,

net profits from that trade or business

tentative line 14b amount and treating

column (c). If the amount in column

(after subtracting the deduction for

line 20 as if it were zero. The

one-half of self-employment tax).

tentative amount for line 19 is your

would otherwise enter on line 21,

However, the 30% limit does not

AMTI figured without regard to the

enter the amount from column (c)

apply if there are no net profits from

ATNOLD.

instead and write “Sch. Q” on the

the trade or business. If capital is not

dotted line next to line 21.

an income-producing factor and the

Enter on line 20 the smaller of the

child’s personal services produced

ATNOLD or the ATNOLD limitation.

Part II—Alternative

the business income, all of the child’s

Any ATNOL not used may be carried

gross income from the trade or

Minimum Tax

back or forward (see section 172(b)).

business is considered earned

The treatment of ATNOLs does not

income.

affect your regular tax NOL.

Line 22—Exemption Amount

Line 25—Alternative

Note: If you elected under section

If line 21 is more than the amount

172(b)(3) to forego the carryback

shown for your filing status in the

Minimum Tax Foreign Tax

period for the regular tax, the election

middle column of the chart on line 22,

Credit (AMTFTC)

also applies for the AMT.

see the worksheet on this page to

figure the amount to enter on line 22.

To see if you need to figure

Line 21—Alternative

TIP

your AMTFTC, fill in line 27 of

Child Under Age 14

Minimum Taxable Income

Form 6251 as instructed (you

If this form is for a child under age 14,

will first need to figure your foreign

If your filing status is married filing

complete the worksheet on this page.

tax credit for the regular tax and

separately and line 21 is more than

A child under age 14 is a child who

complete Form 1040, line 43). If the

$173,000, you must include an

was under age 14 on January 1,

amount on line 27 is greater than or

additional amount on line 21. If line

2002, and at least one of whose

equal to the amount on line 24, you

21 is $271,000 or more, include an

parents was alive at the end of 2001.

do not owe the AMT. Enter zero on

additional $24,500. Otherwise,

line 28 and see Who Must File on

include 25% of the excess of the

Line 8 of the worksheet. Earned

page 1 to find out if you must attach

amount on line 21 over $173,000. For

income includes wages, tips, and

Form 6251 to your return. However,

example, if the amount on line 21 is

other amounts received for personal

even if you do not owe the AMT, you

$193,000, enter $198,000 instead—

services performed. If the child is

may need to complete line 25 to see

the additional $5,000 is 25% of

engaged as a sole proprietor or as a

if you have an AMTFTC carryback or

$20,000 ($193,000 minus $173,000).

partner in a trade or business in

carryforward to other tax years.

which both personal services and

Special Rule for Holders of a

capital are material income-producing

Residual Interest in a REMIC

factors, earned income also includes

Your AMTFTC is your foreign tax

If you held a residual interest in a real

a reasonable allowance for

credit refigured as follows.

estate mortgage investment conduit

compensation for personal services

1. Use a separate AMT Form

1116 for each separate limitation

Exemption Worksheet — Line 22

category specified at the top of Form

1116. Write “AMT” in the top margin

Keep for Your Records

of each Form 1116.

Note: If Form 6251, line 21, is equal to or more than: $255,500 if single or head of household;

Note: When applying the separate

$346,000 if married filing jointly or qualifying widow(er); or $173,000 if married filing separately;

limitation categories, use the

your exemption is zero. Do not complete this worksheet; instead, enter the amount from Form

applicable AMT rate instead of the

6251, line 21, on line 23 and go to line 24.

regular tax rate to determine if any

1. Enter: $35,750 if single or head of household; $49,000 if married

income is “high-taxed.”

filing jointly or qualifying widow(er); $24,500 if married filing

2. If you previously made or are

separately . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

making the simplified limitation

election (see page 8), skip Part I and

2. Enter your alternative minimum taxable

enter on the AMT Form 1116, line 16,

income (AMTI) from Form 6251, line 21

the same amount you entered on that

3. Enter: $112,500 if single or head of

line for the regular tax. If you did not

household; $150,000 if married filing

complete Form 1116 for the regular

jointly or qualifying widow(er); $75,000 if

tax and you previously made or are

married filing separately . . . . . . . . . . . . 3.

making the simplified limitation

election, complete Part I and lines 14

4. Subtract line 3 from line 2. If zero or less,

through 16 of the AMT Form 1116

enter -0- . . . . . . . . . . . . . . . . . . . . . . . 4.

using regular tax amounts.

5. Multiply line 4 by 25% (.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

If the election does not apply,

complete Part I using only income

6. Subtract line 5 from line 1. If zero or less, enter -0-. If this form

and deductions that are allowed for

is for a child under age 14, go to line 7 below. Otherwise, stop

the AMT and attributable to sources

here and enter this amount on Form 6251, line 22, and go to

outside the United States. If the

Form 6251, line 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Instructions for Form 1116 require

you to complete Worksheet A or B,

7. Child’s minimum exemption amount . . . . . . . . . . . . . . . . . . . . 7.

$5,350

you must first complete an AMT

8. Enter the child’s earned income, if any (see instructions) . . . . 8.

Worksheet for Line 17, following the

instructions under 5 on the next page.

9. Add lines 7 and 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.

3. Complete Part II and lines 9

10. Enter the smaller of line 6 or line 9 here and on Form 6251,

through 13 of the AMT Form 1116.

line 22, and go to Form 6251, line 23 . . . . . . . . . . . . . . . . . .

10.

Use your AMTFTC carryover, if any,

on line 10.

-7-

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2001 Page 7

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