Instructions For Form 6251 Alternative Minimum Tax-Individuals

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Department of the Treasury

Internal Revenue Service

Instructions for Form 6251

Alternative Minimum Tax—Individuals

Section references are to the Internal Revenue Code.

foreign tax credit. Because you may have

General Instructions

Specific Instructions

to refigure these items for the AMT, the

carryback or carryforward amount may be

What’s New

different for the AMT than for the regular

If you owe AMT, you may be able

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tax. Your at-risk limits and basis amounts

TIP

For 2004, the minimum exemption

to lower your total tax (regular tax

also may differ for the AMT. Therefore,

amount for a child under age 14 has

plus AMT) by claiming itemized

you must keep records of these different

increased to $5,750.

deductions on Form 1040, even if your

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amounts.

Beginning in 2004, you may benefit

total itemized deductions are less than

from income averaging on Schedule J

the standard deduction. This is because

Partners and Shareholders

(Form 1040) even if you owe the

the standard deduction is not allowed for

alternative minimum tax. See the

the AMT and, if you claim the standard

If you are a partner in a partnership or a

instructions for line 34 on page 8.

deduction on Form 1040, you cannot

shareholder in an S corporation, see

claim itemized deductions for the AMT.

Schedule K-1 and its instructions to figure

Purpose of Form

your adjustments or preferences from the

Part I—Alternative

Use Form 6251 to figure the amount, if

partnership or S corporation to include on

any, of your alternative minimum tax

Form 6251.

Minimum Taxable Income

(AMT). The AMT applies to taxpayers

(AMTI)

Nonresident Aliens

who have certain types of income that

receive favorable treatment, or who

If you are a nonresident alien and you

qualify for certain deductions, under the

To avoid duplication, any

disposed of U.S. real property interests at

tax law. These tax benefits can

adjustment or preference for line

a gain, you must make a special

significantly reduce the regular tax of

5, 18, or 19 or for a tax shelter

CAUTION

computation. Fill in Form 6251 through

some taxpayers with higher economic

farm activity on line 26 must not be taken

line 30. If your net gain from the

incomes. The AMT sets a limit on the

into account in figuring the amount to

disposition of U.S. real property interests

amount these benefits can be used to

enter for any other adjustment or

and the amount on line 28 are both

reduce total tax.

preference.

greater than the tentative amount you

Also use Form 6251 to figure the tax

figured for line 30, replace the amount on

Line 1

liability limit on the credits listed under

line 30 with the smaller of that net gain or

If Form 1040, line 42, includes a write-in

Who Must File below.

the amount on line 28. Also, enter “RPI”

amount (such as a capital construction

on the dotted line next to line 30.

fund deduction for commercial

Who Must File

Otherwise, do not change line 30.

fishermen), adjust line 1 by the write-in

Attach Form 6251 to your return if any of

Form 1040NR. If you are filing Form

amount.

the following statements is true.

1040NR, treat any reference in these

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Form 6251, line 31, is greater than line

Line 3—Taxes

instructions or on Form 6251 to a line on

34.

Form 1040 as a reference to the

Enter the amount of all taxes from

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You claim any general business credit,

corresponding line on Form 1040NR.

Schedule A (Form 1040), line 9, except

the qualified electric vehicle credit, the

generation-skipping transfer taxes on

nonconventional source fuel credit, or the

Credit for Prior Year

income distributions. Be sure to include

credit for prior year minimum tax.

any state and local general sales taxes

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Minimum Tax

The total of Form 6251, lines 8 through

included on Schedule A, line 9.

27, is negative and line 31 would be

See Form 8801, Credit for Prior Year

Line 4—Home Mortgage

greater than line 34 if you did not take into

Minimum Tax — Individuals, Estates, and

account lines 8 through 27.

Interest Adjustment

Trusts, if you paid AMT for 2003 or you

had a minimum tax credit carryforward on

Complete the worksheet on page 2 to

Recordkeeping

your 2003 Form 8801. If you pay AMT for

figure your home mortgage interest

2004, you may be able to take a credit on

For the AMT, certain items of income,

adjustment. The definitions of certain

Form 8801 for 2005.

deductions, etc., receive different tax

terms used in the worksheet are as

treatment than for the regular tax.

follows.

Optional Write-Off for

Therefore, you need to refigure items for

Eligible mortgage. An eligible

the AMT that you figured for the regular

Certain Expenditures

mortgage is a mortgage whose proceeds

tax. In some cases, you may wish to do

were used to buy, build, or substantially

There is no AMT adjustment for the

this by completing the applicable tax form

improve your main home or a second

following items if you elect for the regular

a second time. If you do complete another

home that is a qualified dwelling. A

tax to deduct them ratably over the period

form, do not attach it to your tax return,

mortgage whose proceeds were used to

of time shown.

but keep it for your records. However, you

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refinance another mortgage is not an

Circulation expenditures — 3 years

must attach an AMT Form 1116, Foreign

eligible mortgage.

(section 173).

Tax Credit, to your return; see the

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Research and experimental

instructions for line 32 beginning on

Qualified dwelling. A qualified

expenditures — 10 years (section 174(a)).

dwelling is any house, apartment,

page 7.

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Mining exploration and development

condominium, or mobile home not used

For the regular tax, some deductions

costs — 10 years (sections 616(a) and

on a transient basis.

and credits may result in carrybacks or

617(a)).

carryforwards to other tax years.

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Family. Family includes only your

Intangible drilling costs — 60 months

Examples are investment interest

brothers and sisters (whether by whole or

(section 263(c)).

expense, a net operating loss, a capital

half blood), your spouse, your ancestors,

loss, a passive activity loss, and the

See section 59(e) for more details.

and your lineal descendants.

Cat. No. 64277P

Instructions For Form 6251 Alternative Minimum Tax-Individuals - 2004

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