Instructions For Form 6251 - Alternative Minimum Tax - Individuals

Figure the difference between the AMT

Line 27—Alternative Tax Net

b. Ninety percent of AMTI for the tax

and regular tax amount for each item.

year (figured without regard to the

Operating Loss Deduction

Combine the amounts for all your related

ATNOLD and any domestic production

(ATNOLD)

adjustments and include the total on line

activities deduction, as discussed earlier),

The ATNOLD is the sum of the alternative

plus

26. Keep a copy of all computations for

tax net operating loss (ATNOL)

2. The smaller of:

your records, including any AMT

carryovers and carrybacks to the tax year,

carryover and basis amounts.

a. The sum of the ATNOL carrybacks

subject to the limitation explained below.

and carryforwards to the tax year

Figure your ATNOLD as follows.

attributable to qualified Gulf Opportunity

Do not include on line 26 any

Your ATNOL for a loss year is the

Zone losses, or

adjustment for an item you

excess of the deductions allowed for

b. AMTI for the tax year (figured

refigured on another line of this

CAUTION

figuring AMTI (excluding the ATNOLD)

without regard to the ATNOLD and any

form (for example, line 9).

over the income included in AMTI. Figure

domestic production activities deduction,

this excess with the modifications in

as discussed earlier) reduced by the

Example. On your Schedule C (Form

section 172(d), taking into account the

amount determined under (1), above.

1040) you have a net profit of $9,000

adjustments in sections 56 and 58 and

before figuring your section 179

preferences in section 57 (that is, the

Enter on line 27 the smaller of the

deduction. You do not report any other

section 172(d) modifications must be

ATNOLD or the ATNOLD limitation.

business income on your return. During

separately figured for the ATNOL). For

Any ATNOL not used may be carried

the year, you purchased an asset for

example, the limitation of nonbusiness

back 2 years or forward up to 20 years

$10,000 for which you elect to take the

deductions to the amount of nonbusiness

(15 years for loss years beginning before

section 179 deduction. You also have an

income must be separately figured for the

1998). In some cases, the carryback

AMT depreciation adjustment of $700 for

ATNOL, using only nonbusiness income

period is longer than 2 years; see

other assets depreciated on your

and deductions that are included in AMTI.

sections 172(b) and 1400N(k) for details.

Schedule C.

Your ATNOLD may be limited. To

The treatment of ATNOLs does not affect

figure the ATNOLD limitation, you must

your regular tax NOL.

Your section 179 deduction for the

first figure your AMTI without regard to

Note. If you elected under section

regular tax is limited to your net profit

the ATNOLD and any domestic

172(b)(3) to forgo the carryback period for

(before any section 179 deduction) of

production activities deduction. To do this,

the regular tax, the election also applies

$9,000. The $1,000 excess is a section

first figure a tentative amount for line 9 by

for the AMT.

179 deduction carryforward for the regular

treating line 27 as if it were zero. Next,

figure a tentative total of lines 1 through

tax.

Line 28—Alternative Minimum

26 using the tentative line 9 amount and

Taxable Income

treating line 27 as if it were zero. Add any

For the AMT, your net profit is $9,700,

domestic production activities deduction

If your filing status is married filing

and you are allowed a section 179

separately and line 28 is more than

to this tentative total. Your ATNOLD

deduction of $9,700 for the AMT. You

limitation is 90% of the result.

$200,100, you must include an additional

have a section 179 deduction

amount on line 28. If line 28 is $325,200

However, if an ATNOL that is carried

carryforward of $300 for the AMT.

or more, include an additional $31,275.

back or carried forward to the tax year is

Otherwise, include 25% of the excess of

attributable to qualified Gulf Opportunity

You include a $700 negative

the amount on line 28 over $200,100. For

Zone losses as defined in section

adjustment on line 26 because your

example, if the amount on line 28 is

1400N(k)(2), the ATNOLD for the tax year

section 179 deduction for the AMT is

$220,100, enter $225,100 instead — the

is limited to the sum of:

$700 greater than your allowable regular

additional $5,000 is 25% of $20,000

1. The smaller of:

tax deduction. In the following year, when

($220,100 minus $200,100).

you use the $1,000 regular tax

a. The sum of the ATNOL carrybacks

Special Rule for Holders of a

carryforward, you will have a $700

and carryforwards to the tax year

Residual Interest in a REMIC

positive related adjustment for the AMT

attributable to net operating losses other

because your AMT carryforward is only

than qualified Gulf Opportunity Zone

If you held a residual interest in a real

$300.

losses, or

estate mortgage investment conduit

(REMIC) in 2006, the amount you enter

Exemption Worksheet —Line 29

Keep for Your Records

on line 28 may not be less than the

amount on Schedule E, line 38, column

Note. If Form 6251, line 28, is equal to or more than: $282,500 if single or head of household; $400,200 if

(c). If the amount in column (c) is larger

married filing jointly or qualifying widow(er); or $200,100 if married filing separately; your exemption is zero. Do

than the amount you would otherwise

not complete this worksheet; instead, enter the amount from Form 6251, line 28, on line 30 and go to line 31.

enter on line 28, enter the amount from

1. Enter: $42,500 if single or head of household; $62,550 if married filing

column (c) instead and enter “Sch. Q” on

jointly or qualifying widow(er); $31,275 if married filing separately . . . .

the dotted line next to line 28.

2. Enter your alternative minimum taxable income

(AMTI) from Form 6251, line 28 . . . . . . . . . . . . .

Part II—Alternative

3. Enter: $112,500 if single or head of household;

Minimum Tax

$150,000 if married filing jointly or qualifying

widow(er); $75,000 if married filing separately . . .

Line 29—Exemption Amount

4. Subtract line 3 from line 2. If zero or less, enter -0-

5. Multiply line 4 by 25% (.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If line 28 is more than the amount shown

6. Subtract line 5 from line 1. If zero or less, enter -0-. If this form is for a

for your filing status in the middle column

child under age 18, go to line 7 below. Otherwise, stop here and

of the chart on line 29, see the worksheet

enter this amount on Form 6251, line 29, and go to Form 6251, line

on this page to figure the amount to enter

30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

on line 29.

7. Child’s minimum exemption amount . . . . . . . . . . . . . . . . . . . . . . . .

$6,050

Child Under Age 18

8. Enter the child’s earned income, if any (see instructions) . . . . . . . . .

9. Add lines 7 and 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If this form is for a child under age 18,

10. Enter the smaller of line 6 or line 9 here and on Form 6251, line 29,

complete the worksheet on this page. A

and go to Form 6251, line 30 . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.

child under age 18 is a child who was

born after January 1, 1989, does not file a

-7-

Instructions For Form 6251 - Alternative Minimum Tax - Individuals - 2006 Page 7

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