Instructions For Form 6251 - Alternative Minimum Tax - Individuals

the $20,000 threshold under the

foreign source capital gains you elected

7. Complete lines 8 and 9 of the

adjustment exception.

to include on line 4g of AMT Form 4952. If

worksheet as instructed on the

you are required to complete a Schedule

worksheet.

To adjust your foreign source qualified

D for the AMT, use line 16 of that AMT

dividends, multiply your foreign source

Step 7. Enter the amount from Form

Schedule D to complete line 3 of

qualified dividends in each separate

6251, line 31, on the AMT Form 1116,

Worksheet A or line 4 of the Line 2

category by 0.5357. Include the results on

line 19. Complete lines 18, 20, and 21 of

Worksheet for Worksheet B. Use 0.5357

line 1a of the applicable AMT Form 1116.

the AMT Form 1116.

instead of 0.4286 to complete lines 11,

But do not adjust the amount of any

13, and 15 of Worksheet B and to

Step 8. Complete Part IV of the first AMT

foreign source qualified dividend you

complete lines 8, 11, and 17 of the Line

Form 1116 only.

elected to include on line 4g of AMT Form

15 Worksheet for Worksheet B.

4952.

Enter on Form 6251, line 32, the

If you do not qualify to use Worksheet

amount from line 33 of the first AMT Form

Individuals with capital gain

A or Worksheet B, use the instructions for

1116.

distributions only. If you have no

Capital Gains and Losses in Pub. 514 to

Attach to your tax return, after Form

capital gains or losses other than capital

determine the adjustments you make.

6251, all AMT Forms 1116 you used to

gain distributions from box 2a of Form(s)

Step 4. Complete Part II and lines 9

figure your AMTFTC.

1099-DIV or substitute statement(s), you

through 13 of the AMT Form 1116. Use

must adjust your foreign source capital

AMTFTC Carryback and

your AMTFTC carryover, if any, on

gain distributions if you are required to

Carryforward

line 10.

adjust your foreign source qualified

If your AMTFTC is limited, the unused

dividends under the rules just described

Step 5. If the simplified limitation election

amount generally may be carried back or

or you would be required to adjust your

does not apply, complete lines 14 through

forward according to section 904(c).

foreign source qualified dividends if you

16 of the AMT Form 1116.

However, if you made the election to

had any.

Step 6. If you did not complete Part III of

claim the foreign tax credit on Form 1040

To adjust your foreign source capital

Form 6251, enter the amount from line 28

(or Form 1040NR) without filing Form

gain distributions, multiply your foreign

of Form 6251 on line 17 of the AMT Form

1116, any unused AMTFTC cannot be

source capital gain distributions in each

1116 and go to Step 7 on this page. If you

carried back or forward. In addition, no

separate category by 0.5357. Include the

completed Part III of Form 6251, you

unused AMTFTC from another year can

results on line 1a of the applicable AMT

must complete, for the AMT, the

be used in any year for which the election

Form 1116. But do not adjust the amount

Worksheet for Line 17 in the Form 1116

has been made.

of any foreign source capital gain

instructions to determine the amount to

distribution you elected to include on line

Simplified Limitation Election

enter on line 17 of the AMT Form 1116 if:

•

4g of AMT Form 4952.

Line 53 of Form 6251 is smaller than

You may elect to use a simplified section

line 54, and

Individuals with other capital gains

904 limitation to figure your AMTFTC. If

•

Line 41 of Form 6251 is greater than

or losses. If any capital gain or loss is

you do, use your regular tax income for

zero.

different for the AMT, use amounts as

Form 1116, Part I, instead of refiguring

refigured for the AMT to complete this

your foreign source income for the AMT,

But you do not need to complete the

step. Use Worksheet A in the instructions

as described earlier. You must make the

Worksheet for Line 17 if:

•

for Form 1116 to determine the

election for the first tax year after 1997 for

You qualify for the adjustment

adjustments you must make to your

which you claim an AMTFTC. If you do

exception under Qualified Dividends and

foreign source capital gains or losses (as

not make the election for that year, you

Capital Gain Tax Worksheet (Individuals)

refigured for the AMT) if you have foreign

may not make it for a later year. Once

or Adjustments to foreign qualified

source capital gains or losses (as

made, the election applies to all later tax

dividends under Schedule D Filers in the

refigured for the AMT) in no more than

years and may be revoked only with IRS

Form 1116 instructions, and

•

two separate categories and any of the

consent.

Line 41 of Form 6251 is not more than

following apply.

$175,000 ($87,500 if married filing

•

Line 34

You are not required to make

separately).

If you used Schedule J to figure your tax

adjustments to your foreign source

Note. Use your capital gains and losses

on Form 1040, line 44 (or Form 1040NR,

qualified dividends under the rules

as refigured for the AMT to determine

line 41), you must refigure that tax

described above (or you would not be

whether your total amounts are less than

(including any tax from Form 8814)

required to make those adjustments if you

the $20,000 threshold under the

without using Schedule J before

had foreign source qualified dividends).

•

adjustment exception.

completing this line. This is only for Form

Line 15 or 16 of the AMT Schedule D

6251; do not change the amount on Form

(Form 1040) is zero or a loss.

If you do not need to complete the

•

1040, line 44 (or Form 1040NR, line 41).

The amount on line 3 of the AMT

Worksheet for Line 17, enter the amount

Qualified Dividends and Capital Gain Tax

from line 28 of Form 6251 on line 17 of

Form 1040NR. If you are filing Form

Worksheet (or line 7 of the AMT Schedule

the AMT Form 1116.

1040NR, enter the tax from Form

D Tax Worksheet) minus the amount on

1040NR, line 41 (minus any tax from

Instructions for AMT Worksheet for

Form 4952, line 4e, that you elected to

Form 4972 and any foreign tax credit from

Line 17. Follow these steps to complete,

include on Form 4952, line 4g, is zero or

Form 1040NR, line 44). If you used

for the AMT, the Worksheet for Line 17 in

less.

Schedule J to figure your tax, the amount

the Form 1116 instructions.

for line 41 of Form 1040NR must be

Use Worksheet B if you:

1. Enter the amount from Form 6251,

•

refigured without using Schedule J (see

Cannot use Worksheet A,

line 28, on line 1 of the worksheet.

•

preceding paragraph).

Have foreign source capital gains and

2. Skip lines 2 and 3 of the worksheet.

losses in no more than two separate

3. Enter the amount from Form 6251,

Part III—Tax Computation

categories, and

line 51, on line 4 of the worksheet.

•

Did not have any item of unrecaptured

Using Maximum Capital

4. Multiply line 4 of the worksheet by

section 1250 gain or 28% rate gain or

0.1071 (instead of 0.2857). Enter the

Gains Rates

loss for the AMT.

result on line 5 of the worksheet.

Instructions for Worksheets A and

5. Enter the amount from Form 6251,

Lines 37, 38, and 39

B. When you complete Worksheet A or

line 49, on line 6 of the worksheet.

Worksheet B, use foreign source capital

6. Multiply line 6 of the worksheet by

You generally can fill out lines 37, 38, and

gains and losses, as refigured for the

0.4643 (instead of 0.5714). Enter the

39 using the amounts from the Qualified

AMT if necessary, and do not use any

result on line 7 of the worksheet.

Dividends and Capital Gain Tax

-9-

Instructions For Form 6251 - Alternative Minimum Tax - Individuals - 2006 Page 9

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