Instructions For Form 6251 - Alternative Minimum Tax - Individuals

Do not include on line 26 any

over the income included in AMTI. Figure

as discussed earlier) reduced by the

adjustment for an item you

this excess with the modifications in

amount determined under (1).

refigured on another line of this

section 172(d), taking into account your

CAUTION

Enter on line 27 the smaller of the

form (for example, line 9).

AMT adjustments and preferences (that

ATNOLD or the ATNOLD limitation.

is, the section 172(d) modifications must

Example. On your Schedule C (Form

be separately figured for the ATNOL). For

Any ATNOL not used may be carried

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

example, the limitation of nonbusiness

back 2 years or forward up to 20 years

before figuring your section 179

deductions to the amount of nonbusiness

(15 years for loss years beginning before

deduction. You do not report any other

income must be separately figured for the

1998). In some cases, the carryback

business income on your return. During

ATNOL, using only nonbusiness income

period is longer than 2 years; see

the year, you purchased an asset for

and deductions that are included in AMTI.

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

$10,000 for which you elect to take the

The treatment of ATNOLs does not affect

section 179 deduction. You also have an

Your ATNOLD may be limited. To

your regular tax NOL.

AMT depreciation adjustment of $700 for

figure the ATNOLD limitation, you must

Note. If you elected under section

other assets depreciated on your

first figure your AMTI without regard to

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

Schedule C.

the ATNOLD and any domestic

the regular tax, the election also applies

production activities deduction. To do this,

Your section 179 deduction for the

for the AMT.

first figure a tentative amount for line 9 by

regular tax is limited to your net profit

treating line 27 as if it were zero. Next,

Line 28—Alternative Minimum

(before any section 179 deduction) of

figure a tentative total of lines 1 through

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

Taxable Income

26 using the tentative line 9 amount and

179 deduction carryforward for the regular

If your filing status is married filing

treating line 27 as if it were zero. Add any

tax.

separately and line 28 is more than

domestic production activities deduction

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

$207,500, you must include an additional

to this tentative total. Your ATNOLD

and you are allowed a section 179

amount on line 28. If line 28 is $340,000

limitation is 90% of the result.

deduction of $9,700 for the AMT. You

or more, include an additional $33,125.

have a section 179 deduction

Otherwise, include 25% of the excess of

However, if an ATNOL that is carried

carryforward of $300 for the AMT.

the amount on line 28 over $207,500. For

back or carried forward to the tax year is

example, if the amount on line 28 is

attributable to qualified Gulf Opportunity

You include a $700 negative

$227,500, enter $232,500 instead — the

Zone losses as defined in section

adjustment on line 26 because your

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

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

section 179 deduction for the AMT is

($227,500 minus $207,500).

is limited to the sum of:

$700 greater than your allowable regular

tax deduction. In the following year, when

1. The smaller of:

Special Rule for Holders of a

you use the $1,000 regular tax

Residual Interest in a REMIC

a. The sum of the ATNOL carrybacks

carryforward, you will have a $700

and carryforwards to the tax year

If you held a residual interest in a real

positive related adjustment for the AMT

attributable to net operating losses other

estate mortgage investment conduit

because your AMT carryforward is only

than qualified Gulf Opportunity Zone

(REMIC) in 2007, the amount you enter

$300.

losses, or

on line 28 may not be less than the

b. Ninety percent of AMTI for the tax

Line 27—Alternative Tax Net

amount on Schedule E, line 38, column

year (figured without regard to the

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

Operating Loss Deduction

ATNOLD and any domestic production

than the amount you would otherwise

(ATNOLD)

activities deduction, as discussed earlier),

enter on line 28, enter the amount from

The ATNOLD is the sum of the alternative

plus

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

tax net operating loss (ATNOL)

2. The smaller of:

the dotted line next to line 28.

carryovers and carrybacks to the tax year,

a. The sum of the ATNOL carrybacks

subject to the limitation explained later on

Part II—Alternative

and carryforwards to the tax year

this page. Figure your ATNOLD as

attributable to qualified Gulf Opportunity

Minimum Tax

follows.

Zone losses, or

Your ATNOL for a loss year is the

b. AMTI for the tax year (figured

Line 29—Exemption Amount

excess of the deductions allowed for

without regard to the ATNOLD and any

If line 28 is more than the amount shown

figuring AMTI (excluding the ATNOLD)

domestic production activities deduction,

for your filing status in the middle column

of the chart on line 29, see the worksheet

Exemption Worksheet —Line 29

Keep for Your Records

on this page to figure the amount to enter

on line 29.

Note. If Form 6251, line 28, is equal to or more than: $289,900 if single or head of household; $415,000 if

married filing jointly or qualifying widow(er); or $207,500 if married filing separately; your exemption is zero. Do

Child Under Age 18

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

If this form is for a child under age 18,

1. Enter: $44,350 if single or head of household; $66,250 if married filing

complete the worksheet on this page. A

jointly or qualifying widow(er); $33,125 if married filing separately . . . .

child under age 18 is a child who was

2. Enter your alternative minimum taxable income

born after January 1, 1990, does not file a

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

joint return, and at least one of whose

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

parents was alive at the end of 2007.

$150,000 if married filing jointly or qualifying

Line 8 of the worksheet. Earned

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

income includes wages, tips, and other

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

amounts received for personal services

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

performed. If the child is engaged as a

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

sole proprietor or as a partner in a trade

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

or business in which both personal

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

services and capital are material

line 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

income-producing factors, earned income

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

$6,300

also includes a reasonable allowance for

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

compensation for personal services

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

rendered by the child, but not more than

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

30% of his or her share of the net profits

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

10.

from that trade or business (after

subtracting the deduction for one-half of

-7-

Instructions For Form 6251 - Alternative Minimum Tax - Individuals - 2007 Page 7

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