Instructions For Form 6251 - 2011 (Page 5 of 13) in pdf

treated as interest income on specified

Form 3921. If you received a Form

If you have a capital loss after

private activity bonds to the extent the

3921, it may help you figure your

refiguring Schedule D for the AMT,

dividends are attributable to interest on

adjustment.

apply the $3,000 capital loss limitation

the bonds received by the company,

separately to the AMT loss. Because

Example. You exercised an ISO to

minus an allocable share of the

the amount of your gains and losses

acquire 100 shares of stock in 2011.

expenses paid or incurred by the

may be different for the AMT, the

Your rights in the acquired stock first

company in earning the interest. This

amount of any capital loss carryover

became transferable on the date you

amount should also be reported to you

also may be different for the AMT. See

exercised the ISO and were not subject

on Form 1099-INT in box 9.

the example that begins below. To

to a substantial risk of forfeiture. You

figure your AMT capital loss carryover,

If you are filing Form 8814, Parents’

did not pay anything for the ISO. You

fill out an AMT Capital Loss Carryover

Election To Report Child’s Interest and

did not sell the acquired stock during

Worksheet in the Schedule D

Dividends, any tax-exempt interest

2011. You received a Form 3921 that

instructions.

income from line 1b of that form that is

shows $10 in box 3 (the exercise price

a preference item must be included on

you paid for each share), $25 in box 4

For each of the four items listed

this line.

(the fair market value of each share),

earlier, figure the difference between

and 100 shares in box 5. To figure your

the amount included in taxable income

Line 13—Qualified Small

adjustment, multiply the amount in box

for the regular tax and the amount

Business Stock

4, $25, by the 100 shares in box 5. The

included in income for the AMT. Treat

If you claimed the exclusion under

result is $2,500, the fair market value of

the difference as a negative amount if

section 1202 for gain on qualified small

all the shares. Then multiply the

(a) both the AMT and regular tax

business stock held more than 5 years,

amount in box 3, $10, by the 100

amounts are zero or more and the AMT

multiply the excluded gain (as shown

shares in box 5. The result is $1,000,

amount is less than the regular tax

on Form 8949 in column g) by 7% (.07).

the amount you paid for all the shares.

amount or (b) the AMT amount is a

Your adjustment is $1,500 ($2,500 −

Enter the result on line 13 as a positive

loss, and the regular tax amount is a

amount.

$1,000). Enter it on Form 6251, line 14.

smaller loss or is zero or more.

Line 14—Exercise of

Enter on line 17 the combined

Line 16—Large Partnerships

Incentive Stock Options

adjustments for the four items listed

If you were a partner in an electing

earlier.

For the regular tax, no income is

large partnership, enter the amount

recognized when an incentive stock

from Schedule K-1 (Form 1065-B), box

Example. On March 13, 2010,

option (ISO), as defined in section

Victor Ash, whose filing status is single,

6. Take into account any amount from

422(b), is exercised. However, this rule

box 5 on Form 6251, line 19.

paid $20,000 to exercise an incentive

does not apply for the AMT. Instead,

stock option (which was granted to him

you generally must include on line 14

Line 17—Disposition of

on January 3, 2009) to buy 200 shares

the excess, if any, of:

of stock worth $200,000. The $180,000

Property

difference between his cost and the

1. The fair market value of the stock

Your AMT gain or loss from the

value of the stock at the time he

acquired through exercise of the option

disposition of property may be different

exercised the option is not taxable for

(determined without regard to any lapse

from your gain or loss for the regular

the regular tax. His regular tax basis in

restriction) when your rights in the

tax. This is because the property may

the stock at the end of 2010 is $20,000.

acquired stock first become

have a different adjusted basis for the

For the AMT, however, Ash must

transferable or when these rights are

AMT. Use this line to report any AMT

include the $180,000 as an adjustment

no longer subject to a substantial risk of

adjustment resulting from refiguring:

on his 2010 Form 6251. His AMT basis

forfeiture, over

1. Gain or loss from the sale,

in the stock at the end of 2010 is

2. The amount you paid for the

exchange, or involuntary conversion of

$200,000.

stock, including any amount you paid

property reported on Form 4797, Sales

for the ISO used to acquire the stock.

On January 18, 2011, Ash sold 100

of Business Property;

of the shares for $75,000. Because Ash

Even if your rights in the stock are

2. Casualty gain or loss to business

did not hold these shares more than 1

not transferable and are subject to a

or income-producing property reported

year, that sale is a disqualifying

substantial risk of forfeiture, you may

on Form 4684, Casualties and Thefts;

disposition. For the regular tax, Ash has

elect to include in AMT income the

3. Ordinary income from the

ordinary income of $65,000 ($75,000

excess of the stock’s fair market value

disposition of property not already

minus his $10,000 basis in the 100

(determined without regard to any lapse

taken into account in (1) or (2) or on

shares). Ash has no capital gain or loss

restriction) over the exercise price upon

any other line on Form 6251, such as a

for the regular tax resulting from the

the transfer to you of the stock acquired

disqualifying disposition of stock

sale. For the AMT, Ash has no ordinary

through exercise of the option. You

acquired in a prior year by exercising

income, but has a short-term capital

must make the election by the 30th day

an incentive stock option; and

loss of $25,000 ($75,000 minus his

after the date of the transfer. See Pub.

4. Capital gain or loss (including any

$100,000 AMT basis in the 100

525, Taxable and Nontaxable Income,

carryover that is different for the AMT)

shares).

for more details.

reported on Form 8949, Sales and

If you acquired stock by exercising

Other Dispositions of Capital Assets, or

On April 21, 2011, Ash sold the other

an ISO and you disposed of that stock

Schedule D (Form 1040), Capital Gains

100 shares for $60,000. Because he

in the same year, the tax treatment

and Losses.

held the shares for more than 1 year

under the regular tax and the AMT is

and more than 2 years had passed

the same, and no adjustment is

since the option was granted to him,

First figure any ordinary income

required.

adjustment related to (3) above. Then,

the sale is not a disqualifying

disposition. For the regular tax, Ash has

Increase your AMT basis in any

refigure Form 4684, Form 4797, Form

a long-term capital gain of $50,000

stock acquired through the exercise of

8949, and Schedule D for the AMT, if

($60,000 minus his regular tax basis of

an ISO by the amount of the

applicable, by taking into account any

$10,000). For the AMT, Ash has a

adjustment. Keep adequate records for

adjustments you made this year or in

both the AMT and regular tax so that

previous years that affect your basis or

long-term capital loss of $40,000

($60,000 minus his AMT basis of

you can figure your adjustment. See

otherwise result in a different amount

$100,000).

the instructions for line 17.

for the AMT.

-4-

Instructions for Form 6251 (2011)

Instructions For Form 6251 - 2011 Page 5

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