Instructions For Form 6251 - 2011 (Page 8 of 13) in pdf

remaining costs to be amortized for the

Net income. Determine net income by

income. Unless the distributions are

AMT.

reducing the gross income that you

nontaxable, include on line 27 the total

received or accrued during the tax year

AMT patronage dividend adjustment

Line 24—Research and

from all oil, gas, and geothermal wells

reported to you by the cooperative,

Experimental Costs

by the deductions allocable to those

such as on Form 1099-PATR.

wells (reduced by the excess IDCs).

Pollution Control Facilities

Do not make this adjustment for

When refiguring net income, use only

costs paid or incurred in

income and deductions allowed for the

The section 169 election to amortize

connection with an activity in

AMT.

the basis of a certified pollution control

CAUTION

which you materially participated under

facility over a 60-month or 84-month

Exception. The preference for IDCs

the passive activity rules or for costs for

period is not available for the AMT. For

from oil and gas wells does not apply to

which you elected the optional 10-year

facilities placed in service before 1999,

taxpayers who are independent

write-off for the regular tax.

figure the AMT deduction using ADS.

producers (that is, not integrated oil

For facilities placed in service after

companies as defined in section

Research and experimental costs

1998, figure the AMT deduction under

291(b)(4)). However, this benefit may

deducted in full for the regular tax in the

MACRS using the straight line method.

be limited. First, figure the IDC

tax year they were paid or incurred

Enter the difference between the

preference as if this exception did not

must be capitalized and amortized over

regular tax and AMT deduction. If the

apply. Then, for purposes of this

10 years for the AMT. Enter the

AMT amount is greater, enter the

exception, complete Form 6251 through

difference between the regular tax and

difference as a negative amount.

line 27, including the IDC preference

AMT deduction. If the AMT deduction is

and treating line 11 as if it were zero,

greater, enter the difference as a

Tax Shelter Farm Activities

and combine lines 1 through 27. If the

negative amount.

amount of the IDC preference exceeds

Figure this adjustment only if you have

If you had a loss on property for

40% of the total of lines 1 through 27

a gain or loss from a tax shelter farm

which research and experimental costs

(figured as described in the preceding

activity (as defined in section 58(a)(2))

have not been fully amortized for the

sentence), enter the excess on line 26

that is not a passive activity. If the

AMT, your AMT deduction is the

(your benefit from this exception is

activity is passive, you must include it

smaller of (a) the loss allowable for the

limited). Otherwise, do not enter an

with your other passive activities on line

costs had they remained capitalized or

amount on line 26 (your benefit from

19.

(b) the remaining costs to be amortized

this exception is not limited).

for the AMT.

Refigure all gains and losses you

Line 27—Other Adjustments

reported for the regular tax from tax

Line 25—Installment Sales

shelter farm activities by taking into

Enter on line 27 the total of any other

The installment method does not apply

account any AMT adjustments and

adjustments that apply to you, including

for the AMT to any nondealer

preferences. Determine your tax shelter

the following.

disposition of property after August 16,

farm activity gain or loss for the AMT

1986, but before January 1, 1987, if an

Depreciation Figured Using

using the same rules you used for the

installment obligation to which the

Pre-1987 Rules

regular tax with the following

proportionate disallowance rule applied

modifications.

This preference generally only applies

•

arose from the disposition. Enter the

No refigured loss is allowed, except

to property placed in service after 1987,

amount of installment sale income

to the extent you are insolvent (see

but depreciated using pre-1987 rules

reported for the regular tax as a

section 58(c)(1)).

due to transitional provisions of the Tax

•

negative amount on line 25.

Do not use a refigured loss in the

Reform Act of 1986.

current tax year to offset gains from

Line 26—Intangible Drilling

For the AMT, you must use the

other tax shelter farm activities. Instead,

Costs (IDCs)

straight line method to figure

suspend any refigured loss and carry it

depreciation on real property for which

forward indefinitely until (a) you have a

accelerated depreciation was

Do not make this adjustment for

gain in a subsequent tax year from that

determined using pre-1987 rules. Use a

costs for which you elected the

same activity or (b) you dispose of the

recovery period of 19 years for 19-year

optional 60-month write-off for

CAUTION

activity.

real property and 15 years for

the regular tax.

low-income housing. For leased

Enter the difference between the

IDCs from oil, gas, and geothermal

personal property other than recovery

amount that would be reported for the

wells are a preference to the extent that

property, enter the amount by which

activity on Schedule E or F or Form

the excess IDCs exceed 65% of the net

your regular tax depreciation using the

4835 for the AMT and the regular tax

income from the wells. Figure the

pre-1987 rules exceeds the

amount. If (a) the AMT loss is more

preference for all oil and gas properties

depreciation allowable using the

than the regular tax loss, (b) the AMT

separately from the preference for all

straight line method. For leased 10-year

gain is less than the regular tax gain, or

geothermal properties.

recovery property and leased 15-year

Excess IDCs. Figure excess IDCs as

public utility property, enter the amount

tax gain, enter the adjustment as a

follows.

by which your regular tax depreciation

negative amount.

Step 1. Determine the amount of

exceeds the depreciation allowable

Enter any adjustment for amounts

your IDCs allowed for the regular tax

using the straight line method with a

reported on Form 8949, Schedule D,

under section 263(c), but do not include

half-year convention, no salvage value,

Form 4684, or Form 4797 for the

any section 263(c) deduction for

and a recovery period of 15 years (22

activity on line 17 instead of line 27.

nonproductive wells.

years for 15-year public utility property).

Step 2. Subtract the amount that

Figure the excess of the regular tax

Charitable Contributions of

would have been allowed had you

depreciation over the AMT depreciation

Certain Property

amortized these IDCs over a

separately for each property and

120-month period starting with the

If you made a charitable contribution of

include on line 27 only positive

month the well was placed in

property to which section 170(e) applies

amounts.

production. If you prefer not to use the

and you had a different basis for AMT

Patron’s Adjustment

120-month period, you can elect to use

purposes, you may have to make an

any method that is permissible in

Distributions you received from a

adjustment. See section 170(e) for

determining cost depletion.

cooperative may be includible in

details.

-7-

Instructions for Form 6251 (2011)

Instructions For Form 6251 - 2011 Page 8

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