Instructions For Form 6251 - Alternative Minimum Tax-Individuals

tax year they were paid or incurred

291(b)(4)). However, this benefit may

1998, figure the AMT deduction under

must be capitalized and amortized over

be limited. First, figure the IDC

MACRS using the straight line method.

10 years for the AMT. Enter the

preference as if this exception did not

Enter the difference between the

difference between the regular tax and

apply. Then, for purposes of this

regular tax and AMT deduction. If the

AMT deduction. If the AMT deduction is

exception, complete Form 6251 through

AMT amount is greater, enter the

greater, enter the difference as a

line 27, including the IDC preference

difference as a negative amount.

negative amount.

and treating line 11 as if it were zero,

Tax Shelter Farm Activities

and combine lines 1 through 27. If the

If you had a loss on property for

Figure this adjustment only if you have

amount of the IDC preference exceeds

which research and experimental costs

a gain or loss from a tax shelter farm

40% of the total of lines 1 through 27

have not been fully amortized for the

activity (as defined in section 58(a)(2))

(figured as described in the preceding

AMT, your AMT deduction is the

that is not a passive activity. If the

sentence), enter the excess on line 26

smaller of (a) the loss allowable for the

activity is passive, you must include it

(your benefit from this exception is

costs had they remained capitalized or

with your other passive activities on line

limited). Otherwise, do not enter an

(b) the remaining costs to be amortized

19.

amount on line 26 (your benefit from

for the AMT.

this exception is not limited).

Refigure all gains and losses you

Line 25—Installment Sales

reported for the regular tax from tax

Line 27—Other Adjustments

shelter farm activities by taking into

The installment method does not apply

Enter on line 27 the total of any other

account any AMT adjustments and

for the AMT to any nondealer

adjustments that apply to you, including

preferences. Determine your tax shelter

disposition of property after August 16,

the following.

farm activity gain or loss for the AMT

1986, but before January 1, 1987, if an

using the same rules you used for the

installment obligation to which the

Depreciation Figured Using

regular tax with the following

proportionate disallowance rule applied

Pre-1987 Rules

modifications.

arose from the disposition. Enter the

•

This preference generally only applies

No refigured loss is allowed, except

amount of installment sale income

to property placed in service after 1987,

to the extent you are insolvent (see

reported for the regular tax as a

but depreciated using pre-1987 rules

section 58(c)(1)).

negative amount on line 25.

•

due to transitional provisions of the Tax

Do not use a refigured loss in the

Line 26—Intangible Drilling

Reform Act of 1986.

current tax year to offset gains from

other tax shelter farm activities. Instead,

Costs (IDCs)

For the AMT, you must use the

suspend any refigured loss and carry it

straight line method to figure

forward indefinitely until (a) you have a

depreciation on real property for which

Do not make this adjustment for

gain in a subsequent tax year from that

accelerated depreciation was

costs for which you elected the

same activity or (b) you dispose of the

determined using pre-1987 rules. Use a

optional 60-month write-off for

CAUTION

activity.

recovery period of 19 years for 19-year

the regular tax.

Enter the difference between the

real property and 15 years for

IDCs from oil, gas, and geothermal

amount that would be reported for the

low-income housing. For leased

wells are a preference to the extent that

personal property other than recovery

activity on Schedule E or F or Form

the excess IDCs exceed 65% of the net

property, enter the amount by which

4835 for the AMT and the regular tax

income from the wells. Figure the

amount. If (a) the AMT loss is more

your regular tax depreciation using the

preference for all oil and gas properties

than the regular tax loss, (b) the AMT

pre-1987 rules exceeds the

separately from the preference for all

gain is less than the regular tax gain, or

depreciation allowable using the

geothermal properties.

straight line method. For leased 10-year

Excess IDCs. Figure excess IDCs as

recovery property and leased 15-year

tax gain, enter the adjustment as a

follows.

negative amount.

public utility property, enter the amount

by which your regular tax depreciation

Step 1. Determine the amount of

Enter any adjustment for amounts

exceeds the depreciation allowable

your IDCs allowed for the regular tax

reported on Form 8949, Schedule D,

using the straight line method with a

under section 263(c), but do not include

Form 4684, or Form 4797 for the

half-year convention, no salvage value,

any section 263(c) deduction for

activity on line 17 instead of line 27.

and a recovery period of 15 years (22

nonproductive wells.

Charitable Contributions of

years for 15-year public utility property).

Step 2. Subtract the amount that

Certain Property

Figure the excess of the regular tax

would have been allowed had you

If you made a charitable contribution of

depreciation over the AMT depreciation

amortized these IDCs over a

property to which section 170(e) applies

separately for each property and

120-month period starting with the

and you had a different basis for AMT

include on line 27 only positive

month the well was placed in

purposes, you may have to make an

amounts.

production. If you prefer not to use the

adjustment. See section 170(e) for

120-month period, you can elect to use

Patron’s Adjustment

details.

any method that is permissible in

Distributions you received from a

determining cost depletion.

Alcohol and Cellulosic Biofuel

cooperative may be includible in

Fuels Credit and Biodiesel and

Net income. Determine net income by

income. Unless the distributions are

reducing the gross income that you

Renewable Diesel Fuels Credit

nontaxable, include on line 27 the total

received or accrued during the tax year

AMT patronage dividend adjustment

If your taxable income includes an

from all oil, gas, and geothermal wells

reported to you by the cooperative,

amount from the alcohol and cellulosic

by the deductions allocable to those

such as on Form 1099-PATR.

biofuel fuels credit or the biodiesel and

wells (reduced by the excess IDCs).

renewable diesel fuels credit under

Pollution Control Facilities

When refiguring net income, use only

section 87, include that amount as a

income and deductions allowed for the

The section 169 election to amortize

negative amount on line 27.

AMT.

the basis of a certified pollution control

Related Adjustments

Exception. The preference for IDCs

facility over a 60-month or 84-month

from oil and gas wells does not apply to

period is not available for the AMT. For

If you have an entry on line 8 because

taxpayers who are independent

facilities placed in service before 1999,

you deducted investment interest

producers (that is, not integrated oil

figure the AMT deduction using ADS.

allocable to an interest in a trade or

companies as defined in section

For facilities placed in service after

business, or on line 9, 13, 14, or 16

-7-

Instructions for Form 6251 (2011)

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2011 Page 7

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