Instructions For Form 6251 - Alternative Minimum Tax-Individuals

Line 16—Large Partnerships

1. The fair market value of the stock

tax amounts are zero or more and the

acquired through exercise of the option

AMT amount is less than the regular tax

If you were a partner in an electing large

(determined without regard to any lapse

amount or (b) the AMT amount is a loss,

partnership, enter the amount from

restriction) when your rights in the

and the regular tax amount is a smaller

Schedule K-1 (Form 1065-B), box 6.

acquired stock first become transferable

loss or is zero or more.

Take into account any amount from

or when these rights are no longer

box 5 on Form 6251, line 19.

Enter on line 17 the combined

subject to a substantial risk of forfeiture,

adjustments for the four items listed

Line 17—Disposition of

over

earlier.

Property

2. The amount you paid for the

Example. On March 13, 2016,

stock, including any amount you paid for

Your AMT gain or loss from the

Victor Ash, whose filing status is single,

the ISO used to acquire the stock.

disposition of property may be different

paid $20,000 to exercise an incentive

from your gain or loss for the regular tax.

Even if your rights in the stock aren’t

stock option (which was granted to him

This is because the property may have

transferable and are subject to a

on January 3, 2015) to buy 200 shares

a different adjusted basis for the AMT.

substantial risk of forfeiture, you may

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

Use this line to report any AMT

elect to include in AMT income the

difference between his cost and the

adjustment resulting from refiguring:

excess of the stock's fair market value

value of the stock at the time he

1. Gain or loss from the sale,

(determined without regard to any lapse

exercised the option isn’t taxable for the

exchange, or involuntary conversion of

restriction) over the exercise price upon

regular tax. His regular tax basis in the

property reported on Form 4797, Sales

the transfer to you of the stock acquired

stock at the end of 2016 is $20,000. For

of Business Property;

through exercise of the option. You

the AMT, however, Ash must include

must make the election by the 30th day

the $180,000 as an adjustment on his

2. Casualty gain or loss to business

after the date of the transfer. See Pub.

2016 Form 6251. His AMT basis in the

or income-producing property reported

525, Taxable and Nontaxable Income,

stock at the end of 2016 is $200,000.

on Form 4684, Casualties and Thefts;

for more details.

3. Ordinary income from the

On January 18, 2017, Ash sold 100

disposition of property not already taken

of the shares for $75,000. Because Ash

If you acquired stock by exercising

into account in (1) or (2) or on any other

didn’t hold these shares more than 1

an ISO and you disposed of that stock in

line on Form 6251, such as a

year, that sale is a disqualifying

the same year, the tax treatment under

disposition. For the regular tax, Ash has

disqualifying disposition of stock

the regular tax and the AMT is the

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

acquired in a prior year by exercising an

same, and no adjustment is required.

minus his $10,000 basis in the 100

incentive stock option; and

shares). Ash has no capital gain or loss

Increase your AMT basis in any stock

4. Capital gain or loss (including any

for the regular tax resulting from the

acquired through the exercise of an ISO

carryover that is different for the AMT)

sale. For the AMT, Ash has no ordinary

by the amount of the adjustment. Keep

reported on Form 8949, Sales and

income, but has a short-term capital

adequate records for both the AMT and

Other Dispositions of Capital Assets, or

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

regular tax so that you can figure your

Schedule D (Form 1040), Capital Gains

$100,000 AMT basis in the 100 shares).

adjustment. See the instructions for

and Losses.

line 17.

On April 21, 2017, Ash sold the other

First figure any ordinary income

100 shares for $60,000. Because he

Form 3921. If you received a Form

adjustment related to (3) above. Then,

held the shares for more than 1 year

3921, it may help you figure your

refigure Form 4684, Form 4797, Form

and more than 2 years had passed

adjustment.

8949, and Schedule D for the AMT, if

since the option was granted to him, the

applicable, by taking into account any

Example. You exercised an ISO to

sale isn’t a disqualifying disposition. For

adjustments you made this year or in

acquire 100 shares of stock in 2017.

the regular tax, Ash has a long-term

previous years that affect your basis or

Your rights in the acquired stock first

capital gain of $50,000 ($60,000 minus

otherwise result in a different amount for

became transferable on the date you

his regular tax basis of $10,000). For the

the AMT.

exercised the ISO and weren’t subject

AMT, Ash has a long-term capital loss

to a substantial risk of forfeiture. You

If you have a capital loss after

of $40,000 ($60,000 minus his AMT

didn’t pay anything for the ISO. You

refiguring Schedule D for the AMT,

basis of $100,000).

didn’t sell the acquired stock during

apply the $3,000 capital loss limitation

Ash has no other sales of stock or

2017. You received a Form 3921 that

separately to the AMT loss. Because

other capital assets for 2017. Ash enters

shows $10 in box 3 (the exercise price

the amount of your gains and losses

a total negative adjustment of $118,000

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

may be different for the AMT, the

on line 17 of his 2017 Form 6251,

(the fair market value of each share on

amount of any capital loss carryover

figured as follows:

the exercise date), and 100 shares in

also may be different for the AMT. See

Ash figures a negative adjustment of

box 5 (the number of shares you

the following example. To figure your

$65,000 for the difference between the

acquired). To figure your adjustment,

AMT capital loss carryover, fill out an

$65,000 of regular tax ordinary income

multiply the amount in box 4, $25, by the

AMT Capital Loss Carryover Worksheet

and the $0 of AMT ordinary income for

100 shares in box 5. The result is

in the Schedule D instructions.

the first sale.

$2,500, the fair market value of all the

For each of the four items listed

For the regular tax, Ash has $50,000

shares. Then multiply the amount in

earlier, figure the difference between the

capital gain net income from the second

box 3, $10, by the 100 shares in box 5.

amount included in taxable income for

sale. For the AMT, Ash has a $25,000

The result is $1,000, the amount you

the regular tax and the amount included

short-term capital loss from the first

paid for all the shares. Your adjustment

in income for the AMT. Include the

sale, and a $40,000 long-term capital

is $1,500 ($2,500 − $1,000). Enter it on

difference as a negative amount on

loss from the second sale, resulting in a

Form 6251, line 14.

line 17 if (a) both the AMT and regular

net capital loss of $65,000 for the AMT.

Instructions for Form 6251 (2017)

-5-

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2017 Page 5

Related Articles

Related forms

Related Categories