Instructions For Form 6251 - Alternative Minimum Tax-Individuals

How Is Depreciation Refigured

$65,000 of regular tax ordinary income

Act of 1986, this rule applies to property

and the $0 of AMT ordinary income for

placed in service after July 31, 1986.)

for the AMT?

the first sale.

•

Property placed in service before

What Depreciation Is Not

For the regular tax, Ash has $50,000

1999. Refigure depreciation for the

Refigured for the AMT?

capital gain net income from the

AMT using ADS, with the same

second sale. For the AMT, Ash has a

Do not refigure depreciation for the

convention used for the regular tax.

$25,000 short-term capital loss from the

AMT for the following.

See the following table for the method

first sale, and a $40,000 long-term

•

Residential rental property placed in

and recovery period to use.

capital loss from the second sale,

service after 1998.

resulting in a net capital loss of $65,000

•

Nonresidential real property with a

Property Placed in Service Before 1999

for the AMT. However, only $3,000 of

class life of 27.5 years or more placed

the $65,000 net capital loss is allowed

IF the property is... THEN use the...

in service after 1998 that is depreciated

for 2011 for the AMT. The difference

for the regular tax using the straight line

section 1250

straight line method

between the regular tax gain of $50,000

method.

property

over 40 years.

and the $3,000 loss allowed for the

•

Other section 1250 property placed

AMT results in a $53,000 negative

tangible property

straight line method

in service after 1998 that is depreciated

adjustment to include on line 17.

(other than section

over the property’s

for the regular tax using the straight line

1250 property)

AMT class life.

Ash has an AMT capital loss

method.

depreciated using

carryover from 2011 to 2012 of

•

Property (other than section 1250

straight line method

$62,000, of which $22,000 is short-term

property) placed in service after 1998

for the regular tax

and $40,000 is long-term. If he has no

that is depreciated for the regular tax

other Form 8949 or Schedule D

any other tangible

150% declining

using the 150% declining balance

transactions for 2012, his adjustment

property

balance method,

method or the straight line method.

reported on his 2012 Form 6251 would

switching to straight

•

Property for which you elected to use

be limited to ($3,000), the amount of his

line method the first

the alternative depreciation system

tax year it gives a

capital loss limitation for 2012.

(ADS) of section 168(g) for the regular

larger deduction,

tax.

Line 18—Post-1986

over the property’s

•

Qualified property that is or was

AMT class life.

Depreciation

eligible for a special depreciation

This section describes when

allowance if the depreciable basis of

Property placed in service after 1998.

depreciation must be refigured for the

the property for the AMT is the same as

Use the same convention and recovery

AMT and how to figure the amount to

for the regular tax. This applies to any

period used for the regular tax. For

enter on line 18.

special depreciation allowance,

property other than section 1250

including those for qualified disaster

Do not use line 18 for depreciation

property, use the 150% declining

assistance property, qualified reuse and

related to the following.

balance method, switching to straight

recycling property, qualified cellulosic

•

Employee business expenses

line the first tax year it gives a larger

biofuel plant property, qualified New

claimed on line 21 of Schedule A (Form

deduction. For section 1250 property,

York Liberty Zone property, qualified

1040) or line 7 of Schedule A (Form

use the straight line method.

Gulf Opportunity Zone property, and

1040NR). Take this adjustment into

Kansas disaster area qualified recovery

How Is the AMT Class Life

account on line 5.

assistance property. The special

•

Determined?

Passive activities. Take this

allowance is deductible for the AMT,

adjustment into account on line 19.

The class life used for the AMT is not

and there also is no adjustment

•

An activity for which you are not at

necessarily the same as the recovery

required for any depreciation figured on

risk or income or loss from a

period used for the regular tax. The

the remaining basis of the qualified

partnership or an S corporation if the

class lives for the AMT are listed in

property if the depreciable basis of the

basis limitations apply. Take this

Rev. Proc. 87-56, 1987-2 C.B. 674, and

property for the AMT is the same as for

adjustment into account on line 20.

in Pub. 946, How To Depreciate

the regular tax. Property for which an

•

A tax shelter farm activity. Take this

Property. Use 12 years for any tangible

election is in effect to not have the

adjustment into account on line 27.

personal property not assigned a class

special allowance apply is not qualified

life.

What Depreciation Must Be

property.

•

Refigured for the AMT?

Any part of the cost of any property

See Pub. 946 for tables that can

for which you elected to take a section

be used to figure AMT

TIP

Generally, you must refigure

179 expense deduction. The reduction

depreciation. Rev. Proc. 89-15,

depreciation for the AMT, including

to the depreciable basis of section 179

1989-1 C.B. 816, has special rules for

depreciation allocable to inventory

property by the amount of the section

short years and for property disposed

costs, for:

179 expense deduction is the same for

of before the end of the recovery

•

Property placed in service after 1998

the regular tax and the AMT.

period.

that is depreciated for the regular tax

•

Motion picture films, videotapes, or

using the 200% declining balance

How Is the Adjustment

sound recordings.

method (generally 3-, 5-, 7-, and

Figured?

•

Property depreciated under the

10-year property under the modified

Subtract the AMT deduction for

unit-of-production method or any other

accelerated cost recovery system

depreciation from the regular tax

method not expressed in a term of

(MACRS), except for qualified property

deduction and enter the result. If the

years.

eligible for the special depreciation

•

AMT deduction is more than the regular

Indian reservation property that

allowance (discussed later));

tax deduction, enter the difference as a

•

meets the requirements of section

Section 1250 property placed in

negative amount.

168(j).

service after 1998 that is not

•

Qualified revitalization expenditures

depreciated for the regular tax using

In addition to the AMT adjustment to

for which you elected to claim the

the straight line method; and

your deduction for depreciation, you

•

commercial revitalization deduction

Tangible property placed in service

must also adjust the amount of

under section 1400I.

after 1986 and before 1999. (If the

depreciation that was capitalized, if any,

•

transitional election was made under

A natural gas gathering line placed in

to account for the difference between

section 203(a)(1)(B) of the Tax Reform

service after April 11, 2005.

the rules for the regular tax and the

-5-

Instructions for Form 6251 (2011)

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2011 Page 5

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