Instructions For Form 6251 - Alternative Minimum Tax - Individuals

self-employment tax). However, the 30%

Who Must File on page 1 to find out if you

Step 3. Follow the instructions below, if

limit does not apply if there are no net

must attach Form 6251 to your return.

applicable, to determine the amount of

profits from the trade or business. If

However, even if you do not owe the

foreign source qualified dividends, capital

capital is not an income-producing factor

AMT, you may need to complete line 32

gain distributions, and other capital gains

and the child’s personal services

to see if you have an AMTFTC carryback

and losses to include on line 1a and line 5

produced the business income, all of the

or carryforward to other tax years.

of the AMT Form 1116.

child’s gross income from the trade or

Foreign qualified dividends. You

If you made an election to claim the

business is considered earned income.

must adjust your foreign source qualified

foreign tax credit on Form 1040 (or Form

dividends before you include those

1040NR) without filing Form 1116, your

Line 31

amounts on line 1a of the AMT Form

AMTFTC is the same as the foreign tax

If you claimed the foreign earned income

1116 if:

credit on Form 1040, line 51 (or Form

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exclusion or the housing exclusion on

Line 53 of Form 6251 is smaller than

1040NR, line 46). Enter that amount on

Form 2555 or Form 2555-EZ, you must

line 54, and

Form 6251, line 32. Otherwise, your

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use the worksheet below to figure the

Line 41 of Form 6251 is greater than

AMTFTC is your foreign tax credit

amount to enter on line 31.

zero.

refigured as follows.

Form 1040NR. If you are filing Form

Step 1. Use a separate AMT Form 1116

But you do not need to make any

1040NR and you reported capital gain

adjustments if:

for each separate category of income

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distributions directly on Form 1040NR,

You qualify for the adjustment

specified at the top of Form 1116. Write

line 14; you reported qualified dividends

“AMT” in the top margin of each

exception under Qualified Dividends and

on Form 1040NR, line 10b; or you had a

Capital Gain Tax Worksheet (Individuals)

Form 1116.

gain on both lines 15 and 16 of Schedule

or Adjustments to foreign qualified

When applying the separate

D (Form 1040) (as refigured for the AMT,

dividends under Schedule D Filers in the

categories of income, use the applicable

if necessary), complete Part III on page 2

Form 1116 instructions, and

AMT rate instead of the regular tax rate to

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of Form 6251 and enter the amount from

Line 41 of Form 6251 is not more than

determine if any income is “high-taxed.”

line 55 on line 31. Otherwise, do not

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

Step 2. If you previously made or are

complete Part III. Instead, if Form 6251,

separately).

making the simplified limitation election

line 30, is $175,000 or less ($87,500 or

Note. Use your capital gains and losses

(see page 9), skip Part I and enter on the

less if you checked filing status box 3, 4,

as refigured for the AMT to determine

AMT Form 1116, line 16, the same

or 5 on Form 1040NR), figure the amount

whether your total amounts are less than

amount you entered on that line for the

to enter on line 31 by multiplying line 30

the $20,000 threshold under the

regular tax. If you did not complete Form

by 26% (.26). Otherwise, figure the

adjustment exception.

1116 for the regular tax and you

amount to enter on line 31 by multiplying

previously made or are making the

To adjust your foreign source qualified

line 30 by 28% (.28) and subtracting

simplified limitation election, complete

dividends, multiply your foreign source

$3,500 ($1,750 if you checked filing

Part I and lines 14 through 16 of the AMT

qualified dividends in each separate

status box 3, 4, or 5) from the result.

Form 1116 using regular tax amounts.

category by 0.5357. Include the results on

Line 32—Alternative Minimum

line 1a of the applicable AMT Form 1116.

If the election does not apply,

Tax Foreign Tax Credit

But do not adjust the amount of any

complete Part I using only income and

foreign source qualified dividend you

(AMTFTC)

deductions that are allowed for the AMT

elected to include on line 4g of AMT

and attributable to sources outside the

Form 4952.

To see if you need to figure your

United States. If you have any foreign

TIP

AMTFTC, fill in Form 6251, line

source qualified dividends or foreign

Individuals with capital gain

34, as instructed. (You will first

source capital gains (including any foreign

distributions only. If you have no

need to figure your foreign tax credit for

source capital gain distributions) or

capital gains or losses other than capital

the regular tax and complete Form 1040,

losses, use the instructions under Step 3

gain distributions from box 2a of Form(s)

line 51, or Form 1040NR, line 46.) If the

to determine whether you must make

1099-DIV or substitute statement(s), you

amount on line 34 is greater than or equal

adjustments to those amounts before you

must adjust your foreign source capital

to the amount on line 31, you do not owe

include the amounts on line 1a or line 5 of

gain distributions if you are required to

the AMT. Enter -0- on line 35 and see

the AMT Form 1116.

adjust your foreign source qualified

Foreign Earned Income Tax Worksheet — Line 31

Keep for Your Records

Before you begin:

If Form 6251, line 30, is zero, do not complete this worksheet.

1. Enter the amount from Form 6251, line 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Enter the amount from your (and your spouse’s if filing jointly) Form 2555, line 45, or Form 2555-EZ, line 18 . . . . .

3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Tax on the amount on line 3.

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}

If you reported capital gain distributions directly on Form 1040, line 13; or you reported qualified dividends

on Form 1040, line 9b; or you had a gain on both lines 15 and 16 of Schedule D (Form 1040), enter the

amount from line 3 of this worksheet on Form 6251, line 36. Complete the rest of Part III of Form 6251.

However, before completing Part III, see Forms 2555 and 2555-EZ, on page 10, to see if you must complete

Part III with certain modifications. Then enter the amount from Form 6251, line 55, here.

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All others: If line 3 is $175,000 or less ($87,500 or less if married filing separately), multiply line 3 by 26%

(.26). Otherwise, multiply line 3 by 28% (.28) and subtract $3,500 ($1,750 if married filing separately) from the

result.

5. Tax on the amount on line 2. If line 2 is $175,000 or less ($87,500 or less if married filing separately), multiply line

2 by 26% (.26). Otherwise, multiply line 2 by 28% (.28) and subtract $3,500 ($1,750 if married filing separately)

from the result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Subtract line 5 from line 4. Enter the result here and on Form 6251, line 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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