Instructions For Form 6251 - Alternative Minimum Tax-Individuals

AMT. Include on this line the current

unallowed losses. If the amount is a

deduction is the smaller of (a) the

year adjustment to taxable income, if

gain, include it on the AMT Form 8582.

amount of the loss allowable for the

any, resulting from the difference.

If the amount is a loss, do not include it

costs had they remained capitalized or

on the AMT Form 8582. Carry the loss

(b) the remaining costs to be amortized

Line 19—Passive Activities

forward to 2012 to see if you have a

for the AMT.

Refigure your passive activity gains and

gain or loss from tax shelter passive

Line 22—Long-Term

losses for the AMT by taking into

farm activities for 2012.

Contracts

account all adjustments and

Insolvency

preferences and any AMT prior year

For the AMT, you generally must use

If at the end of the tax year your

unallowed losses that apply to that

the percentage-of-completion method

liabilities exceed the fair market value

activity. You may fill out a second Form

described in section 460(b) to

of your assets, increase your passive

8582, Passive Activity Loss Limitations,

determine your income from any

activity loss allowed by that excess (but

and the other forms or schedules on

long-term contract (defined in section

not by more than your total loss). See

which your passive activities are

460(f)). However, this rule does not

section 58(c)(1).

reported, to determine your passive

apply to any home construction contract

activity loss allowed for the AMT, but do

(as defined in section 460(e)(6)). For

Line 20—Loss Limitations

not file the second set of forms and

contracts excepted from the

For passive activities, see the line 19

schedules with your tax return.

percentage-of-completion method for

instructions instead. For tax shelter

Example. You are a partner in a

the regular tax by section 460(e)(1),

farm activities (that are not passive),

partnership and the Schedule K-1

you must use the simplified procedures

see the line 27 instructions.

(Form 1065) you received shows the

for allocating costs outlined in section

Refigure your gains and losses from

following.

460(b)(3) to determine the percentage

•

activities for which you are not at risk

A passive activity loss of $4,125,

of completion.

•

and basis limitations applicable to

A depreciation adjustment of $500 on

Enter the difference between the

partnerships and S corporations by

post-1986 property, and

AMT and regular tax income. If the

•

taking into account all AMT adjustments

An adjustment of $225 on the

AMT income is smaller, enter the

and preferences that apply. See

disposition of property.

difference as a negative amount.

sections 59(h), 465, 704(d), and

Because the two adjustments above

Note. If you are required to use the

1366(d).

are from the passive activity and are

percentage-of-completion method for

not allowed for the AMT, you must first

Enter the difference between the

either the regular tax or the AMT, you

amount that would be reported for the

reduce the passive activity loss by

may owe or be entitled to a refund of

activity on Schedule C, C-EZ, E, or F or

those amounts. The result is a passive

interest for the tax year the contract is

activity loss for the AMT of $3,400. You

Form 4835 for the AMT and the regular

completed or adjusted. For details, see

then enter this amount on the AMT

tax amount. If (a) the AMT loss is more

Form 8697, Interest Computation Under

Form 8582 and refigure the allowable

than the regular tax loss, (b) the AMT

the Look-Back Method for Completed

gain is less than the regular tax gain, or

passive activity loss for the AMT.

Long-Term Contracts.

The amount of any AMT passive

Line 23—Mining Costs

tax gain, enter the adjustment as a

activity loss that is not

TIP

negative amount.

deductible and is carried

Do not make this adjustment for

The AMT amount of any gain or loss

forward is likely to differ from the

costs for which you elected the

from activities for which you are not at

regular tax amount, if any. Therefore,

optional 10-year write-off for the

risk is likely to differ from the regular tax

keep adequate records for both the

CAUTION

regular tax.

amount. Your AMT basis in

AMT and regular tax.

partnerships and S corporations is also

Mining exploration and development

Enter the difference between the

likely to differ from your regular tax

costs deducted in full for the regular tax

amount that would be reported for the

basis. Therefore, keep adequate

in the tax year they were paid or

activity on Schedule C, C-EZ, E, or F or

records for both the AMT and regular

incurred must be capitalized and

Form 4835, Farm Rental Income and

tax.

amortized over 10 years for the AMT.

Expenses, for the AMT and the regular

Enter the difference between the

Enter any adjustment for amounts

tax amount. If (a) the AMT loss is more

regular tax and AMT deduction. If the

reported on Form 8949, Schedule D,

than the regular tax loss, (b) the AMT

AMT deduction is greater, enter the

Form 4684, or Form 4797 for the

gain is less than the regular tax gain, or

difference as a negative amount.

activity on line 17 instead of line 20.

If you had a loss on property for

tax gain, enter the adjustment as a

Line 21—Circulation Costs

which mining costs have not been fully

negative amount.

amortized for the AMT, your AMT

Enter any adjustment for amounts

Do not make this adjustment for

deduction is the smaller of (a) the loss

reported on Form 8949, Schedule D,

costs for which you elected the

allowable for the costs had they

Form 4684, or Form 4797 for the

optional 3-year write-off for the

remained capitalized or (b) the

CAUTION

activity on line 17 instead of line 19.

regular tax.

remaining costs to be amortized for the

See the instructions for line 17.

Circulation costs (expenditures to

AMT.

Publicly Traded Partnership

establish, maintain, or increase the

Line 24—Research and

(PTP)

circulation of a newspaper, magazine,

Experimental Costs

or other periodical) deducted in full for

If you had a loss from a PTP, refigure

the regular tax in the year they were

the loss using any AMT adjustments

paid or incurred must be capitalized

Do not make this adjustment for

and preferences and any AMT prior

and amortized over 3 years for the

costs paid or incurred in

year unallowed loss.

AMT. Enter the difference between the

connection with an activity in

CAUTION

Tax Shelter Passive Farm

regular tax and AMT deduction. If the

which you materially participated under

Activities

AMT deduction is greater, enter the

the passive activity rules or for costs for

difference as a negative amount.

which you elected the optional 10-year

Refigure any gain or loss from a tax

write-off for the regular tax.

shelter passive farm activity taking into

If you had a loss on property for

account all AMT adjustments and

which circulation costs have not been

Research and experimental costs

preferences and any AMT prior year

fully amortized for the AMT, your AMT

deducted in full for the regular tax in the

-6-

Instructions for Form 6251 (2011)

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2011 Page 6

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