Instructions For Form 6251 - Alternative Minimum Tax-Individuals

amount should also be reported to you

Your rights in the acquired stock first

amount of any capital loss carryover

on Form 1099-INT in box 9.

became transferable on the date you

also may be different for the AMT. See

exercised the ISO and were not subject

the example that begins below. To

If you are filing Form 8814, Parents’

to a substantial risk of forfeiture. You

figure your AMT capital loss carryover,

Election To Report Child’s Interest and

did not pay anything for the ISO. You

fill out an AMT Capital Loss Carryover

Dividends, any tax-exempt interest

did not sell the acquired stock during

Worksheet in the Schedule D

income from line 1b of that form that is

2011. You received a Form 3921 that

instructions.

a preference item must be included on

shows $10 in box 3 (the exercise price

this line.

For each of the four items listed

you paid for each share), $25 in box 4

earlier, figure the difference between

Line 13—Qualified Small

(the fair market value of each share),

the amount included in taxable income

and 100 shares in box 5. To figure your

Business Stock

for the regular tax and the amount

adjustment, multiply the amount in box

included in income for the AMT. Treat

If you claimed the exclusion under

4, $25, by the 100 shares in box 5. The

the difference as a negative amount if

section 1202 for gain on qualified small

result is $2,500, the fair market value of

(a) both the AMT and regular tax

business stock held more than 5 years,

all the shares. Then multiply the

amounts are zero or more and the AMT

multiply the excluded gain (as shown

amount in box 3, $10, by the 100

amount is less than the regular tax

on Form 8949 in column (g)) by 7%

shares in box 5. The result is $1,000,

amount or (b) the AMT amount is a

(.07). Enter the result on line 13 as a

the amount you paid for all the shares.

loss, and the regular tax amount is a

positive amount.

Your adjustment is $1,500 ($2,500 −

smaller loss or is zero or more.

$1,000). Enter it on Form 6251, line 14.

Line 14—Exercise of

Enter on line 17 the combined

Incentive Stock Options

Line 16—Large Partnerships

adjustments for the four items listed

earlier.

For the regular tax, no income is

If you were a partner in an electing

Example. On March 13, 2010,

recognized when an incentive stock

large partnership, enter the amount

Victor Ash, whose filing status is single,

option (ISO), as defined in section

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

422(b), is exercised. However, this rule

6. Take into account any amount from

paid $20,000 to exercise an incentive

does not apply for the AMT. Instead,

box 5 on Form 6251, line 19.

stock option (which was granted to him

on January 3, 2009) to buy 200 shares

you generally must include on line 14

Line 17—Disposition of

of stock worth $200,000. The $180,000

the excess, if any, of:

Property

difference between his cost and the

1. The fair market value of the stock

value of the stock at the time he

acquired through exercise of the option

Your AMT gain or loss from the

exercised the option is not taxable for

(determined without regard to any lapse

disposition of property may be different

the regular tax. His regular tax basis in

restriction) when your rights in the

from your gain or loss for the regular

the stock at the end of 2010 is $20,000.

acquired stock first become

tax. This is because the property may

For the AMT, however, Ash must

transferable or when these rights are

have a different adjusted basis for the

include the $180,000 as an adjustment

no longer subject to a substantial risk of

AMT. Use this line to report any AMT

on his 2010 Form 6251. His AMT basis

forfeiture, over

adjustment resulting from refiguring:

in the stock at the end of 2010 is

2. The amount you paid for the

1. Gain or loss from the sale,

$200,000.

stock, including any amount you paid

exchange, or involuntary conversion of

for the ISO used to acquire the stock.

On January 18, 2011, Ash sold 100

property reported on Form 4797, Sales

of the shares for $75,000. Because Ash

of Business Property;

Even if your rights in the stock are

did not hold these shares more than 1

2. Casualty gain or loss to business

not transferable and are subject to a

year, that sale is a disqualifying

or income-producing property reported

substantial risk of forfeiture, you may

disposition. For the regular tax, Ash has

on Form 4684, Casualties and Thefts;

elect to include in AMT income the

ordinary income of $65,000 ($75,000

3. Ordinary income from the

excess of the stock’s fair market value

minus his $10,000 basis in the 100

disposition of property not already

(determined without regard to any lapse

shares). Ash has no capital gain or loss

taken into account in (1) or (2) or on

restriction) over the exercise price upon

for the regular tax resulting from the

any other line on Form 6251, such as a

the transfer to you of the stock acquired

sale. For the AMT, Ash has no ordinary

disqualifying disposition of stock

through exercise of the option. You

income, but has a short-term capital

acquired in a prior year by exercising

must make the election by the 30th day

loss of $25,000 ($75,000 minus his

an incentive stock option; and

after the date of the transfer. See Pub.

$100,000 AMT basis in the 100

4. Capital gain or loss (including any

525, Taxable and Nontaxable Income,

shares).

carryover that is different for the AMT)

for more details.

reported on Form 8949, Sales and

On April 21, 2011, Ash sold the other

If you acquired stock by exercising

Other Dispositions of Capital Assets, or

100 shares for $60,000. Because he

an ISO and you disposed of that stock

Schedule D (Form 1040), Capital Gains

held the shares for more than 1 year

in the same year, the tax treatment

and Losses.

and more than 2 years had passed

under the regular tax and the AMT is

since the option was granted to him,

the same, and no adjustment is

First figure any ordinary income

the sale is not a disqualifying

required.

adjustment related to (3) above. Then,

disposition. For the regular tax, Ash has

refigure Form 4684, Form 4797, Form

a long-term capital gain of $50,000

Increase your AMT basis in any

8949, and Schedule D for the AMT, if

($60,000 minus his regular tax basis of

stock acquired through the exercise of

applicable, by taking into account any

$10,000). For the AMT, Ash has a

an ISO by the amount of the

adjustments you made this year or in

long-term capital loss of $40,000

adjustment. Keep adequate records for

previous years that affect your basis or

($60,000 minus his AMT basis of

both the AMT and regular tax so that

otherwise result in a different amount

$100,000).

you can figure your adjustment. See

for the AMT.

the instructions for line 17.

Ash has no other sales of stock or

If you have a capital loss after

other capital assets for 2011. Ash

Form 3921. If you received a Form

refiguring Schedule D for the AMT,

enters a total negative adjustment of

3921, it may help you figure your

apply the $3,000 capital loss limitation

$118,000 on line 17 of his 2011 Form

adjustment.

separately to the AMT loss. Because

6251, figured as follows:

•

Example. You exercised an ISO to

the amount of your gains and losses

Ash figures a negative adjustment of

acquire 100 shares of stock in 2011.

may be different for the AMT, the

$65,000 for the difference between the

-4-

Instructions for Form 6251 (2011)

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2011 Page 4

Related Articles

Related forms

Related Categories