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Department of the Treasury 2020 Internal Revenue Service Instructions for Form 6251 Alternative Minimum Tax—Individuals

Section references are to the Internal Revenue 4. The total of Form 6251, lines 2c and basis amounts may also differ for Code unless otherwise noted. through 3, is negative and line 7 would the AMT. be greater than line 10 if you didn’t take General Instructions into account lines 2c through 3. Recordkeeping You must keep records to support items Future Developments Purpose of Form reported on Form 6251 in case the IRS For the latest information about Use Form 6251 to figure the amount, if has questions about them. If the IRS developments related to Form 6251 and any, of your alternative minimum tax examines your tax return, you may be its instructions, such as legislation (AMT). The AMT is a separate tax that asked to explain the items reported. enacted after they were published, go to is imposed in addition to your regular Good records will help you explain any IRS.gov/Form6251. tax. It applies to taxpayers who have item and arrive at the correct AMT. certain types of income that receive Keep records that show how you favorable treatment, or who qualify for What's New figured income, deductions, etc., for the certain deductions, under the tax law. AMT. Also keep records of any items Excess business loss limitation. These tax benefits can significantly that you used to figure the AMT that Recent legislation has repealed the reduce the regular tax of some differ from what you used to figure the excess business loss limitation of taxpayers with higher economic regular tax. For example, you will need noncorporate taxpayers (Form 461) for incomes. The AMT sets a limit on the to separately figure and track certain 2020 (and retroactively to 2018 and amount these benefits can be used to carrybacks, carryforwards, basis 2019). If you filed a 2018 or 2019 return reduce total tax. with the limitation, you can file an amounts, depreciation, and loss amended return, Form 1040-X. Also use Form 6251 to figure your limitation amounts that differ between tentative minimum tax (Form 6251, the AMT and the regular tax. Exemption amount. The exemption line 9). You may need to know that amount on Form 6251, line 5, has amount to figure the tax liability limit on If you refigure an item for AMT by increased to $72,900 ($113,400 if the credits listed under Who Must File, completing an AMT version of a form or married filing jointly or qualifying earlier. worksheet, keep a copy of that AMT widow(er); $56,700 if married filing form or worksheet for your records. separately). Figuring AMT Amounts Partners and Shareholders Also, the amount used to determine For the AMT, certain items of income, the phaseout of your exemption has deductions, etc., receive different tax If you are a partner in a partnership or a increased to $518,400 ($1,036,800 if treatment than for the regular tax. shareholder in an S corporation, see married filing jointly or qualifying Therefore, you will need to figure items Schedule K-1 and its instructions to widow(er)). for the AMT differently from how you figure your adjustments or preferences figured them for the regular tax. These from the partnership or S corporation to AMT tax brackets. For 2020, the 26% include on Form 6251. tax rate applies to the first $197,900 instructions will help you figure AMT ($98,950 if married filing separately) of items by using the amount you figured taxable excess (the amount on line 6). for the regular tax and refiguring it for Nonresident Aliens This change is reflected in lines 7, 18, the AMT. In some cases, it is easiest to If you are a nonresident alien and you and 39. refigure an item for AMT by completing disposed of U.S. real property interests a tax form or worksheet a second time at a gain, you must make a special Who Must File using additional AMT instructions. computation. Fill in Form 6251 through These instructions refer to such a form line 6. If your net gain from the Attach Form 6251 to your return if any of disposition of U.S. real property the following statements are true. or worksheet as an “AMT” version. If you do complete an AMT version of a interests and the amount on line 4 are 1. Form 6251, line 7, is greater than form or worksheet, don’t attach it to your both greater than the tentative amount line 10. tax return unless instructed to do so. For you figured for line 6, replace the 2. You claim any general business example, you may have to attach an amount on line 6 with the smaller of that credit, and either line 6 (in Part I) of AMT Form 1116, Foreign Tax Credit, to net gain or the amount on line 4. Also, Form 3800 or line 25 of Form 3800 is your return; see Line 8, later. enter “RPI” on the dotted line next to line 6. Otherwise, don’t change line 6. more than zero. As you figure some deductions and 3. You claim the qualified electric credits for the AMT, carrybacks or vehicle credit (Form 8834), the personal carryforwards to other tax years may be Credit for Prior Year use part of the alternative fuel vehicle different from what you figured for the Minimum Tax refueling property credit (Form 8911), or regular tax. Examples are investment See Form 8801, Credit for Prior Year the credit for prior year minimum tax interest expense, a net operating loss, a Minimum Tax—Individuals, Estates, and (Form 8801). capital loss, a passive activity loss, and Trusts, if you paid AMT for 2019 or you the foreign tax credit. Your at-risk limits had a minimum tax credit carryforward

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on your 2019 Form 8801. If you pay line 15, is zero, subtract line 14 from deductible if tax-exempt interest on AMT for 2020, you may be able to take line 11 of Form 1040-NR and enter the private activity bonds were includible in a credit on Form 8801 for 2021. result. If less than zero, enter as a gross income. negative amount. Step 2. Enter your AMT disallowed Optional Write-off for Line 2a—Taxes investment interest expense from 2019 Certain Expenditures Enter the amount of all taxes from on line 2. Complete line 3. There is no AMT adjustment for the Schedule A (Form 1040), line 7, except Step 3. When completing Part II, following items if you elect for the any generation-skipping transfer taxes refigure the following amounts, taking regular tax to deduct them ratably over on income distributions. into account all adjustments and the period of time shown. preferences. • Circulation expenditures—3 years If you aren’t filing Schedule A (Form • Gross income from property held for (section 173). 1040), then enter the standard investment. • Research and experimental deduction amount that you reported on • Net gain from the disposition of expenditures—10 years (section Form 1040 or 1040-SR, line 12. property held for investment. 174(a)). Net qualified disaster loss. If you • Net capital gain from the disposition • Mining exploration and development filed Schedule A just to claim an of property held for investment. costs—10 years (sections 616(a) and increased standard deduction on Form • Investment expenses. 617(a)). 1040 or Form 1040-SR due to a loss Include on line 4a any tax-exempt • Intangible drilling costs—60 months you suffered related to property in a interest income from private activity (section 263(c)). federally declared disaster area, then bonds that must be included on Form enter zero on line 2a and go to line 2b. For information on making the 6251, line 2g. If you have any You will include the amount of the election, see section 59(e) and investment expenses that would have standard deduction (before it was Regulations section 1.59-1. Also see been deductible if the interest on the increased by any net qualified disaster Pub. 535, Business Expenses. bonds were includible in gross income loss) on line 3. for the regular tax, you can use them to Specific Instructions Form 1040-NR. If you are filing Form reduce the amount on line 4a or include 1040-NR, enter the amount of all taxes them on line 5. If you owe AMT, you may be from Schedule A (Form 1040-NR), On line 4g, enter the smaller of: TIP able to lower your total tax line 1b, plus any foreign income taxes (regular tax plus AMT) by you are deducting on Schedule A 1. The amount from line 4g of your claiming itemized deductions on Form (instead of claiming a credit on Form regular tax Form 4952, or 1040 or Form 1040-SR, even if your 1116). Don’t include any 2. The total of lines 4b and 4e of this total itemized deductions are less than generation-skipping transfer taxes on AMT Form 4952. the standard deduction. This is because income distributions. the standard deduction isn’t allowed for Step 4. Complete Part III. the AMT and, if you claim the standard Line 2b—Refund of Taxes Enter on Form 6251, line 2c, the deduction on Form 1040 or Form Include any refund from Schedule 1 difference between line 8 of your AMT 1040-SR, you can’t claim itemized (Form 1040), line 1, that is attributable Form 4952 and line 8 of your regular tax deductions for the AMT. to state or local income taxes. Also Form 4952. If your AMT expense is include any refunds received in 2020 greater, enter the difference as a and included in income on Schedule 1 negative amount. Part I—Alternative (Form 1040), line 8, that are attributable Minimum Taxable Income to state or local personal property taxes Investment interest expense that (AMTI) or general sales taxes, foreign income isn’t an itemized deduction. If you taxes, or state, local, or foreign real didn’t itemize deductions and you had To avoid duplication, any property taxes. Enter the total as a investment interest expense, don’t enter ! adjustment or preference for negative amount. If you include an an amount on Form 6251, line 2c, CAUTION line 2m or 2n or for a tax shelter amount from Schedule 1 (Form 1040), unless you reported investment interest farm activity on line 3 must not be taken line 8, you must enter a description and expense on Schedule E (Form 1040), into account in figuring the amount to the amount next to the entry space for Supplemental Income and Loss. If you enter for any other adjustment or line 2b. For example, if you include a did, follow the steps above for preference. refund of real property taxes, enter “real completing Form 4952. Allocate the property” and the amount next to the investment interest expense allowed on Line 1 entry space. line 8 of the AMT Form 4952 in the If Form 1040 or 1040-SR, line 15, is same way you did for the regular tax. zero and includes a write-in amount Line 2c—Investment Interest Enter on Form 6251, line 2c, the (such as a capital construction fund If you filled out Form 4952, Investment difference between the amount allowed deduction for commercial fishermen), Interest Expense Deduction, for your on Schedule E for the regular tax and subtract the write-in amount and line 14 regular tax, you will need to fill out a the amount allowed on Schedule E for of Form 1040 or 1040-SR from line 11 of second Form 4952 for the AMT as the AMT. Form 1040 or 1040-SR before entering follows. Line 2d—Depletion the result on line 1. Step 1. Follow the Form 4952 Refigure your depletion deduction for Form 1040-NR. If you are filing Form instructions for line 1, but, when the AMT. To do so, use only income 1040-NR, enter the amount from Form completing line 1, also include any and deductions allowed for the AMT 1040-NR, line 15. If Form 1040-NR, interest that would have been when refiguring the limit based on

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taxable income from the property under qualified disaster losses before Line 2g—Interest From Private section 613(a) and the limit based on December 19, 2004 (as defined in Activity Bonds taxable income, with certain section 172(j)), qualified Gulf adjustments, under section 613A(d)(1). Opportunity Zone losses (as defined in Enter on line 2g interest income from Also, your depletion deduction for section 1400N(k)(2)), qualified recovery “specified private activity bonds” mines, wells, and other natural deposits assistance losses (as defined in Pub. reduced (but not below zero) by any under section 611 is limited to the 4492-A, Information for Taxpayers deduction that would have been property's adjusted basis at the end of Affected by the May 4, 2007, Kansas allowable if the interest were includible the year, as refigured for the AMT, Storms and Tornadoes), qualified in gross income for the regular tax. Each unless you are an independent disaster recovery assistance losses (as payer of this type of interest should producer or royalty owner claiming defined in Pub. 4492-B, Information for send you a Form 1099-INT showing the percentage depletion for oil and gas Affected Taxpayers in the Midwestern amount of this interest in box 9. wells under section 613A(c). Figure this Disaster Areas), or a 2008 or 2009 loss Generally, the term “specified private limit separately for each property. When that you elected to carry back more than activity bond” means any private activity refiguring the property's adjusted basis, 2 years under section 172(b)(1)(H). bond (as defined in section 141) the take into account any AMT adjustments Therefore, if an ATNOL that is carried interest on which isn’t includible in gross you made this year or in previous years back or carried forward to the tax year is income for the regular tax, if the bond that affect basis (other than current year attributable to any of those losses, the was issued after August 7, 1986. But depletion). ATNOLD for the tax year is limited to the specified private activity bonds sum of: generally don’t include any bonds Enter the difference between the issued in 2009 or 2010. See section regular tax and AMT deduction. If the 1. The smaller of: 57(a)(5) for other exceptions and more AMT deduction is more than the regular a. The sum of the ATNOL details. tax deduction, enter the difference as a carrybacks and carryforwards to the tax negative amount. year attributable to net operating losses Don’t include interest on qualified other than those losses described in 2a Gulf Opportunity Zone bonds or Line 2f—Alternative Tax Net below, or qualified Midwestern disaster area Operating Loss Deduction b. 90% of AMTI for the tax year bonds. (ATNOLD) (figured without regard to the ATNOLD); Exempt-interest dividends paid by a The ATNOLD is the sum of the plus mutual fund or other regulated alternative tax net operating loss 2. The smaller of: investment company are treated as (ATNOL) carrybacks and carryforwards a. The sum of the ATNOL interest income on specified private to the tax year subject to the limitation carrybacks and carryforwards to the tax activity bonds to the extent the explained later. Figure your ATNOLD as year attributable to qualified disaster dividends are attributable to interest on follows. losses, qualified Gulf Opportunity Zone the bonds received by the company, Your ATNOL for a loss year is the losses, qualified recovery assistance minus an allocable share of the excess of the deductions allowed for losses, qualified disaster recovery expenses paid or incurred by the figuring AMTI (excluding the ATNOLD) assistance losses, and any 2008 or company in earning the interest. This over the income included in AMTI. 2009 loss that you elected to carry back amount should be reported to you on Figure this excess with the more than 2 years under section 172(b) Form 1099-DIV in box 12. modifications in section 172(d), taking (1)(H), or If you are filing Form 8814, Parents' into account your AMT adjustments and b. 100% of AMTI for the tax year Election To Report Child's Interest and preferences (that is, the section 172(d) (figured without regard to the ATNOLD) Dividends, include on this line any modifications must be separately reduced by the amount determined tax-exempt interest income from line 1b figured for the ATNOL). For example, under (1). of that form that is a preference item. the limitation of nonbusiness deductions to the amount of nonbusiness income Enter on line 2f the smaller of the Line 2h—Qualified Small must be separately figured for the ATNOLD or the ATNOLD limitation. Business Stock Enter it as a negative amount. ATNOL, using only nonbusiness income If you claimed the exclusion under and deductions that are included in Any ATNOL not used may generally section 1202 for gain on qualified small AMTI. be carried back 2 years or forward up to business stock acquired before Your ATNOLD may be limited. To 20 years if it arose before your 2018 tax September 28, 2010, and held more figure the ATNOLD limitation, you must year. Any ATNOL arising after your than 5 years, multiply the excluded gain first figure your AMTI without regard to 2017 tax year may generally be carried (as shown on Form 8949 in column (g)) the ATNOLD. To do this, first figure a back 5 years or forward indefinitely. For by 7% (0.07). Enter the result on line 2h tentative amount for line 2d by treating more information about carryover as a positive amount. line 2f as if it were zero. Next, figure a periods, see Pub. 536. Line 2i—Exercise of Incentive tentative total of lines 1 through 3 using The treatment of ATNOLs doesn’t Stock Options the tentative line 2d amount and treating affect your regular tax NOL. However, if For the regular tax, no income is line 2f as if it were zero. This is your you elected under section 172(b)(3) to recognized when an incentive stock AMTI figured without regard to the forgo the carryback period for the option (ISO), as defined in section ATNOLD. Your ATNOLD is limited to regular tax, the election also applies for 422(b), is exercised. However, this rule 90% of the result. the AMT. doesn’t apply for the AMT. Instead, you However, the 90% limit doesn’t apply must generally include on line 2i the to an ATNOL that is attributable to excess, if any, of:

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1. The fair market value of the stock Line 2k—Disposition of in income for the AMT. Include the acquired through exercise of the option Property difference as a negative amount on (determined without regard to any lapse line 2k if (a) both the AMT and regular restriction) when your rights in the Your AMT gain or loss from the tax amounts are zero or more and the acquired stock first become transferable disposition of property may be different AMT amount is less than the regular tax or when these rights are no longer from your gain or loss for the regular tax. amount, or (b) the AMT amount is a subject to a substantial risk of forfeiture; This is because the property may have loss, and the regular tax amount is a over a different adjusted basis for the AMT. smaller loss, or is zero or more. Use this line to report any AMT 2. The amount you paid for the adjustment resulting from refiguring: Enter on line 2k the combined stock, including any amount you paid for adjustments for the four items listed the ISO used to acquire the stock. 1. Gain or loss from the sale, exchange, or involuntary conversion of earlier. Even if your rights in the stock aren’t property reported on Form 4797, Sales Example. On March 13, 2019, transferable and are subject to a of Business Property; Victor Ash, whose filing status is single, substantial risk of forfeiture, you may 2. Casualty gain or loss to business paid $20,000 to exercise an ISO (which elect to include in AMT income the or income-producing property reported was granted to him on January 3, 2018) excess of the stock's fair market value on Form 4684, Casualties and Thefts; to buy 200 shares of stock worth (determined without regard to any lapse $200,000. The $180,000 difference 3. Ordinary income from the restriction) over the exercise price upon between his cost and the value of the disposition of property not already taken the transfer to you of the stock acquired stock at the time he exercised the option into account in (1) or (2) or on any other through exercise of the option. You isn’t taxable for the regular tax. His line on Form 6251, such as a must make the election by the 30th day regular tax basis in the stock at the end disqualifying disposition of stock after the date of the transfer. See Pub. of 2019 is $20,000. For the AMT, acquired in a prior year by exercising an 525, Taxable and Nontaxable Income, however, Ash must include the incentive stock option; and for more details. $180,000 as an adjustment on his 2019 4. Capital gain or loss (including any Form 6251. His AMT basis in the stock If you acquired stock by exercising carryover that is different for the AMT) at the end of 2019 is $200,000. an ISO and you disposed of that stock in reported on Form 8949, Sales and On January 18, 2020, Ash sold 100 the same year, the tax treatment under Other Dispositions of Capital Assets, or of the shares for $75,000. Because Ash the regular tax and the AMT is the Schedule D (Form 1040), Capital Gains didn’t hold these shares more than 1 same, and no adjustment is required. and Losses. year, that sale is a disqualifying Increase your AMT basis in any stock First figure any ordinary income disposition. For the regular tax, Ash has acquired through the exercise of an ISO adjustment related to (3) above. Then, ordinary income of $65,000 ($75,000 by the amount of the adjustment. Keep refigure Form 4684, Form 4797, Form minus his $10,000 basis in the 100 adequate records for both the AMT and 8949, and Schedule D for the AMT, if shares). Ash has no capital gain or loss regular tax so that you can figure your applicable, by taking into account any for the regular tax resulting from the adjustment. See the instructions for adjustments you made this year or in sale. For the AMT, Ash has no ordinary line 2k. previous years that affect your basis or income, but has a short-term capital otherwise result in a different amount for loss of $25,000 ($75,000 minus his Form 3921. If you received a Form the AMT. When you refigure your gain $100,000 AMT basis in the 100 shares). 3921, it may help you figure your or loss on Form 8949 for AMT, the On April 21, 2020, Ash sold the other adjustment. amount of gain you elected to defer for 100 shares for $60,000. Because he Example. You exercised an ISO to regular tax purposes due to an held the shares for more than 1 year acquire 100 shares of stock in 2020. investment in a qualified opportunity and more than 2 years had passed Your rights in the acquired stock first fund may need to be adjusted on your since the option was granted to him, the became transferable on the date you AMT Form 8949. An adjustment may be sale isn’t a disqualifying disposition. For exercised the ISO and weren’t subject required if the regular tax and AMT the regular tax, Ash has a long-term to a substantial risk of forfeiture. You adjusted basis of the property you sold capital gain of $50,000 ($60,000 minus didn’t pay anything for the ISO. You prior to your investment is different. his regular tax basis of $10,000). For the didn’t sell the acquired stock during AMT, Ash has a long-term capital loss If you have a capital loss after 2020. You received a Form 3921 that of $40,000 ($60,000 minus his AMT refiguring Schedule D for the AMT, shows $10 in box 3 (the exercise price basis of $100,000). you paid for each share), $25 in box 4 apply the $3,000 capital loss limitation Ash has no other sales of stock or (the fair market value of each share on separately to the AMT loss. Because other capital assets for 2020. Ash enters the exercise date), and 100 shares in the amount of your gains and losses a total negative adjustment of $118,000 box 5 (the number of shares you may be different for the AMT, the on line 2k of his 2020 Form 6251, acquired). To figure your adjustment, amount of any capital loss carryover figured as follows. multiply the amount in box 4, $25, by the may also be different for the AMT. See • Ash figures a negative adjustment of 100 shares in box 5. The result is the following example. To figure your $65,000 for the difference between the $2,500, the fair market value of all the AMT capital loss carryover, fill out an $65,000 of regular tax ordinary income shares. Then multiply the amount in AMT Capital Loss Carryover Worksheet and the $0 of AMT ordinary income for box 3, $10, by the 100 shares in box 5. in the Schedule D instructions. the first sale. The result is $1,000, the amount you For each of the four items listed • For the regular tax, Ash has $50,000 paid for all the shares. Your adjustment earlier, figure the difference between the capital gain net income from the second is $1,500 ($2,500 − $1,000). Enter it on amount included in taxable income for sale. For the AMT, Ash has a $25,000 Form 6251, line 2i. the regular tax and the amount included short-term capital loss from the first

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sale, and a $40,000 long-term capital • Section 1250 property placed in 179 expense deduction. The reduction loss from the second sale, resulting in a service after 1998 that isn’t depreciated to the depreciable basis of section 179 net capital loss of $65,000 for the AMT. for the regular tax using the straight line property by the amount of the section However, only $3,000 of the $65,000 method; and 179 expense deduction is the same for net capital loss is allowed for 2020 for • Tangible property placed in service the regular tax and the AMT. the AMT. The difference between the after 1986 and before 1999. (If the • Motion picture films, videotapes, or regular tax gain of $50,000 and the transitional election was made under sound recordings. $3,000 loss allowed for the AMT results section 203(a)(1)(B) of the Tax Reform • Property depreciated under the in a $53,000 negative adjustment to Act of 1986, this rule applies to property unit-of-production method or any other include on line 2k. placed in service after July 31, 1986.) method not expressed in a term of Ash has an AMT capital loss years. carryover from 2020 to 2021 of $62,000, What Depreciation Isn’t Refigured • Indian reservation property that of which $22,000 is short term and for the AMT? meets the requirements of section $40,000 is long term. If he has no other 168(j). Don’t refigure depreciation for the AMT Form 8949 or Schedule D transactions • A natural gas gathering line placed in for the following. for 2021, his adjustment reported on his service after April 11, 2005. Residential rental property placed in 2021 Form 6251 would be limited to • service after 1998. ($3,000), the amount of his capital loss How Is Depreciation Refigured for Nonresidential real property with a limitation for 2021. • class life of 27.5 years or more placed in the AMT? Line 2l—Post-1986 service after 1998 that is depreciated for Property placed in service before Depreciation the regular tax using the straight line 1999. Refigure depreciation for the method. AMT using ADS, with the same To avoid duplication, any AMT • Other section 1250 property placed in convention used for the regular tax. See adjustment or tax preference ! service after 1998 that is depreciated for the following table for the method and CAUTION item taken into account on this the regular tax using the straight line recovery period to use. line shouldn’t be taken into account in method. figuring the amount to enter on any • Property (other than section 1250 Property Placed in Service Before 1999 other adjustment or tax preference item property) placed in service after 1998 line of this form. that is depreciated for the regular tax IF the property is... THEN use the... using the 150% declining balance section 1250 property straight line method This section describes when over 40 years. depreciation must be refigured for the method or the straight line method. AMT and how to figure the amount to • Property for which you elected to use tangible property straight line method enter on line 2l. the alternative depreciation system (other than section over the property's (ADS) of section 168(g) for the regular 1250 property) AMT class life. Don’t use line 2l for depreciation tax. depreciated using related to the following. • Qualified property that is or was straight line method for • Passive activities. Take this eligible for a special depreciation the regular tax adjustment into account on line 2m. allowance if the depreciable basis of the any other tangible 150% declining • An activity for which you aren’t at risk. property is the same for the AMT and property balance method, Take this adjustment into account on the regular tax. This applies to any switching to straight line 2n. special depreciation allowance, line method the first Income or loss from a partnership or including those for disaster assistance tax year it gives a • larger deduction, over an S corporation if the basis limitations property, reuse and recycling property, the property's AMT apply. Take this adjustment into account cellulosic biofuel plant property, second class life. on line 2n. generation biofuel plant property, New • A tax shelter farm activity. Take this York Liberty Zone property, Gulf adjustment into account on line 3. Opportunity Zone property, and Kansas disaster area recovery assistance Property placed in service after What Depreciation Must Be property. The special allowance is 1998. Use the same convention and Refigured for the AMT? deductible for the AMT, and no recovery period used for the regular tax. adjustment is required for any Generally, you must refigure For property other than section 1250 depreciation figured on the remaining property, use the 150% declining depreciation for the AMT, including basis of the qualified property because depreciation allocable to inventory balance method, switching to straight the depreciable basis of the property is line the first tax year it gives a larger costs, for: the same for the AMT and the regular • Property placed in service after 1998 deduction. For section 1250 property, tax. If you elected not to have any use the straight line method. that is depreciated for the regular tax special depreciation allowance apply, using the 200% declining balance the property may be subject to an AMT method (generally 3-, 5-, 7-, and adjustment for depreciation if it was How Is the AMT Class Life 10-year property under the modified placed in service before 2016. It isn’t Determined? accelerated cost recovery system subject to an AMT adjustment for The class life used for the AMT isn’t (MACRS), except for certain qualified depreciation if it was placed in service necessarily the same as the recovery property eligible for the special after 2015. period used for the regular tax. The depreciation allowance (discussed • Any part of the cost of any property class lives for the AMT are listed in Rev. later)); for which you elected to take a section Proc. 87-56, 1987-2 C.B. 674, and in

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Pub. 946, How To Depreciate Property. The amount of any AMT activities (that aren’t passive), see the Use 12 years for any tangible personal passive activity loss that isn’t line 3 instructions. property not assigned a class life. deductible and is carried forward is likely to differ from the regular Refigure your gains and losses from See Pub. 946 for tables that can tax amount, if any. Therefore, keep activities for which you aren’t at risk and TIP be used to figure AMT adequate records for both the AMT and basis limitations applicable to depreciation. Rev. Proc. 89-15, regular tax. partnerships and S corporations by 1989-1 C.B. 816, has special rules for taking into account all AMT adjustments short years and for property disposed of and preferences that apply. See before the end of the recovery period. Enter the difference between the sections 59(h), 465, 704(d), and amount that would be reported for the 1366(d). activity on Schedule C, E, or F or Form How Is the Adjustment Figured? 4835, Farm Rental Income and Enter the difference between the Subtract the AMT deduction for Expenses, for the AMT and the regular amount that would be reported for the depreciation from the regular tax tax amount. If (a) the AMT loss is more activity on Schedule C, E, or F or Form deduction and enter the result. If the than the regular tax loss, (b) the AMT 4835 for the AMT and the regular tax AMT deduction is more than the regular gain is less than the regular tax gain, or amount. If (a) the AMT loss is more than tax deduction, enter the difference as a (c) you have an AMT loss and a regular the regular tax loss, (b) the AMT gain is negative amount. tax gain, enter the adjustment as a less than the regular tax gain, or (c) you negative amount. have an AMT loss and a regular tax In addition to the AMT adjustment to gain, enter the adjustment as a negative your deduction for depreciation, also Enter any adjustment for amounts amount. adjust the amount of depreciation that reported on Form 8949, Schedule D, Form 4684, or Form 4797, for the The AMT amount of any gain or was capitalized, if any, to account for loss from activities for which you the difference between the rules for the activity on line 2k instead of line 2m. See the instructions for line 2k. aren’t at risk is likely to differ regular tax and the AMT. Include on this from the regular tax amount. Your AMT line the current year adjustment to basis in partnerships and S corporations taxable income, if any, resulting from Publicly Traded Partnership (PTP) is also likely to differ from your regular the difference. If you had a loss from a PTP, refigure tax basis. Therefore, keep adequate Line 2m—Passive Activities the loss using any AMT adjustments records for both the AMT and regular and preferences and any AMT prior tax. Refigure your passive activity gains and year unallowed loss. losses for the AMT by taking into Enter any adjustment for amounts account all adjustments and reported on Form 8949, Schedule D, preferences and any AMT prior year Tax Shelter Passive Farm Activities Form 4684, or Form 4797, for the unallowed losses that apply to that activity on line 2k instead of line 2n. activity. You may fill out an AMT Form Refigure any gain or loss from a tax 8582, Passive Activity Loss Limitations, shelter passive farm activity taking into Line 2o—Circulation Costs and AMT versions of the other forms or account all AMT adjustments and Don’t make this adjustment for schedules on which your passive preferences and any AMT prior year costs for which you elected the activities are reported, to determine unallowed losses. If the amount is a optional 3-year write-off for the your passive activity loss allowed for the gain, include it on the AMT Form 8582. regular tax. AMT, but don’t file the AMT versions of If the amount is a loss, don’t include it these forms and schedules with your tax on the AMT Form 8582. Carry the loss Circulation costs (expenditures to return. Instead, keep them with your forward to 2021 to see if you have a establish, maintain, or increase the records. gain or loss from tax shelter passive circulation of a newspaper, magazine, Example. You are a partner in a farm activities for 2021. or other periodical) deducted in full for partnership and the Schedule K-1 (Form the regular tax in the year they were 1065) you received shows the following. Insolvency paid or incurred must be capitalized and A passive activity loss of $4,125. amortized over 3 years for the AMT. • If at the end of the tax year your A depreciation adjustment of $500 on Enter the difference between the regular • liabilities exceed the fair market value of post-1986 property. tax and AMT deduction. If the AMT your assets, increase your passive An adjustment of $225 on the deduction is more than the regular tax • activity loss allowed by that excess (but disposition of property. deduction, enter the difference as a not by more than your total loss). See negative amount. Because the two adjustments above section 58(c)(1). are from the passive activity and aren’t If you had a loss on property for allowed for the AMT, you must first Line 2n—Loss Limitations which circulation costs haven’t been reduce the passive activity loss by those To avoid duplication, any AMT fully amortized for the AMT, your AMT amounts. The result is a passive activity ! adjustment or tax preference deduction is the smaller of (a) the loss loss for the AMT of $3,400. You then CAUTION item taken into account on this allowable for the costs had they enter this amount on the AMT Form line shouldn’t be taken into account in remained capitalized, or (b) the 8582 and refigure the allowable passive figuring the amount to enter on any remaining costs to be amortized for the activity loss for the AMT. other adjustment or tax preference item AMT. line of this form. For passive activities, see the line 2m instructions instead. For tax shelter farm

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Line 2p—Long-Term Contracts Line 2r—Research and amortized these IDCs over a 120-month Experimental Costs period starting with the month the well To avoid duplication, any AMT was placed in production. If you prefer ! adjustment or tax preference Don’t make this adjustment for not to use the 120-month period, you CAUTION item taken into account on this costs paid or incurred in can elect to use any method that is line shouldn’t be taken into account in connection with an activity in permissible in determining cost figuring the amount to enter on any which you materially participated under depletion. other adjustment or tax preference item the passive activity rules or for costs for line of this form. which you elected the optional 10-year Net income. Determine net income by write-off for the regular tax. reducing the gross income that you For the AMT, you must generally use received or accrued during the tax year the percentage-of-completion method Research and experimental costs from all oil, gas, and geothermal wells described in section 460(b) to deducted in full for the regular tax in the by the deductions allocable to those determine your income from any tax year they were paid or incurred must wells (reduced by the excess IDCs). long-term contract (defined in section be capitalized and amortized over 10 When refiguring net income, use only 460(f)). However, this rule doesn’t apply years for the AMT. Enter the difference income and deductions allowed for the to any home construction contract (as between the regular tax and AMT AMT. defined in section 460(e)(5) (formerly deduction. If the AMT deduction is more designated 460(e)(6)). For contracts Exception. The preference for IDCs than the regular tax deduction, enter the from oil and gas wells doesn’t apply to excepted from the difference as a negative amount. percentage-of-completion method for taxpayers who are independent the regular tax by section 460(e)(1), use If you had a loss on property for producers (that is, not integrated oil the simplified procedures for allocating which research and experimental costs companies as defined in section 291(b) costs outlined in section 460(b)(3) to haven’t been fully amortized for the (4)). However, this benefit may be determine the percentage of AMT, your AMT deduction is the smaller limited. First, figure the IDC preference completion. of (a) the loss allowable for the costs as if this exception didn’t apply. Then, had they remained capitalized, or (b) the for purposes of this exception, complete Enter the difference between the remaining costs to be amortized for the Form 6251 through line 3, including the AMT and regular tax income. If the AMT AMT. IDC preference and treating line 2f as if income is smaller, enter the difference it were zero, and combine lines 1 as a negative amount. Line 2s—Installment Sales through 3. If the amount of the IDC The installment method doesn’t apply preference exceeds 40% of the total of Note. If you are required to use the for the AMT to any nondealer lines 1 through 3 (figured as described percentage-of-completion method for disposition of property after August 16, in the preceding sentence), enter the either the regular tax or the AMT, you 1986, but before January 1, 1987, if an excess on line 2t (your benefit from this may owe or be entitled to a refund of installment obligation to which the exception is limited). Otherwise, don’t interest for the tax year the contract is proportionate disallowance rule applied enter an amount on line 2t (your benefit completed or adjusted. For details, see arose from the disposition. Enter the from this exception isn’t limited). Form 8697, Interest Computation Under amount of installment sale income the Look-Back Method for Completed Line 3—Other Adjustments reported for the regular tax as a Long-Term Contracts. negative amount on line 2s. Enter on line 3 the total of any other Line 2q—Mining Costs adjustments that apply to you, including Line 2t—Intangible Drilling the following. Don’t make this adjustment for Costs (IDCs) costs for which you elected the Depreciation Figured Using Don’t make this adjustment for optional 10-year write-off for the Pre-1987 Rules regular tax. costs for which you elected the optional 60-month write-off for This preference generally applies only Mining exploration and development the regular tax. to property placed in service after 1987, costs deducted in full for the regular tax but depreciated using pre-1987 rules in the tax year they were paid or IDCs from oil, gas, and geothermal due to transitional provisions of the Tax incurred must be capitalized and wells are a preference to the extent that Reform Act of 1986. amortized over 10 years for the AMT. the excess IDCs are more than 65% of the net income from the wells. Figure Enter the difference between the regular For the AMT, you must use the the preference for all oil and gas tax and AMT deduction. If the AMT straight line method to figure properties separately from the deduction is more than the regular tax depreciation on real property for which preference for all geothermal properties. deduction, enter the difference as a accelerated depreciation was negative amount. Excess IDCs. Figure excess IDCs as determined using pre-1987 rules. Use a If you had a loss on property for follows. recovery period of 19 years for 19-year real property and 15 years for which mining costs haven’t been fully Step 1. Determine the amount of low-income housing. For leased amortized for the AMT, your AMT your IDCs allowed for the regular tax personal property other than recovery deduction is the smaller of (a) the loss under section 263(c), but don’t include property, enter the amount by which allowable for the costs had they any section 263(c) deduction for your regular tax depreciation using the remained capitalized, or (b) the nonproductive wells. remaining costs to be amortized for the pre-1987 rules exceeds the AMT. Step 2. Subtract from the amount depreciation allowable using the straight determined in Step 1 the amount that line method. For leased 10-year would have been allowed had you recovery property and leased 15-year

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public utility property, enter the amount gain, enter the adjustment as a negative If you filed Schedule A to itemize by which your regular tax depreciation amount. your deductions, then don't make this exceeds the depreciation allowable adjustment. using the straight line method with a Enter any adjustment for amounts half-year convention, no salvage value, reported on Form 8949, Schedule D, Related Adjustments and a recovery period of 15 years (22 Form 4684, or Form 4797 for the activity years for 15-year public utility property). on line 2k instead of line 3. If you have an entry on line 2c because you deducted investment interest Figure the excess of the regular tax Charitable Contributions of Certain allocable to an interest in a trade or business, or on line 2d, 2h, 2i, or 2k depreciation over the AMT depreciation Property separately for each property and include through 2t, or you have any amount on line 3 only positive amounts. If you made a charitable contribution of included on line 3 from pre-1987 property to which section 170(e) applies depreciation, pollution control facilities, or tax shelter farm activities, you may Pollution Control Facilities and you had a different basis for AMT purposes, you may have to make an have to refigure any item of income or The section 169 election to amortize the adjustment. See section 170(e) for deduction based on a limit of income basis of a certified pollution control details. other than AGI or modified AGI. facility over a 60-month or 84-month period isn’t available for the AMT. For Business Interest Limitation Affected items include the following. facilities placed in service before 1999, • Section 179 expense deduction Complete an AMT Form 8990 using figure the AMT deduction using ADS. (Form 4562, line 12). amounts adjusted for AMT. Enter the For facilities placed in service after • Expenses for business or rental use difference between the AMT and regular 1998, figure the AMT deduction under of your home. tax allowable interest expense. If line 30 MACRS using the straight line method. • Conservation expenses (Schedule F of the AMT Form 8990 is more than the Enter the difference between the regular (Form 1040), line 12). amount on line 30 of the regular tax tax and AMT deduction. If the AMT • Taxable IRA distributions (Form Form 8990, enter the difference as a deduction is more than the regular tax 1040, 1040-SR, or 1040-NR, line 4b), if negative amount. deduction, enter the difference as a prior year IRA deductions were different negative amount. for the AMT and the regular tax. Biofuel Producer Credit and • Self-employed health insurance Tax Shelter Farm Activities Biodiesel and Renewable Diesel deduction (Schedule 1 (Form 1040), Figure this adjustment only if you have a Fuels Credit line 16). gain or loss from a tax shelter farm • Self-employed SEP, SIMPLE, and If your taxable income includes the qualified plans deduction (Schedule 1 activity (as defined in section 58(a)(2)) amount of the biofuel producer credit or that isn’t a passive activity. If the activity (Form 1040), line 15). biodiesel and renewable diesel fuels • IRA deduction (Schedule 1 (Form is passive, you must include it with your credit, include that amount as a other passive activities on line 2m. 1040), line 19), affected by the earned negative amount on line 3. income limitation of section 219(b)(1) Refigure all gains and losses you (B). reported for the regular tax from tax Mortgage Interest shelter farm activities by taking into If you deducted home mortgage interest Figure the difference between the account any AMT adjustments and on Schedule A for a dwelling that isn’t a AMT and regular tax amount for each preferences. Determine your tax shelter principal residence (within the meaning item. Combine the amounts for all your farm activity gain or loss for the AMT of section 121) or qualified dwelling for related adjustments and include the using the same rules you used for the AMT, include that deducted interest on total on line 3. Keep a copy of all regular tax with the following line 3. A qualified dwelling for AMT is a computations for your records, including modifications. house, apartment, condominium, or any AMT carryover and basis amounts. • No refigured loss is allowed, except mobile home not used on a transient Don’t include on line 3 any to the extent you are insolvent (see basis. A qualified dwelling for AMT adjustment for an item you section 58(c)(1)). doesn’t include house boats and ! CAUTION refigured on another line of this • Don’t use a refigured loss in the recreational vehicles. form (for example, line 2d). current tax year to offset gains from other tax shelter farm activities. Instead, Net Qualified Disaster Loss Example. On your Schedule C suspend any refigured loss and carry it If you filed Schedule A to claim an (Form 1040), you have a net profit of forward indefinitely until (a) you have a $9,000 before figuring your section 179 gain in a subsequent tax year from that increased standard deduction on Form 1040 or Form 1040-SR due to a loss deduction. You don’t report any other same activity, or (b) you dispose of the business income on your return. During activity. you suffered related to property in a federally declared disaster area, then the year, you purchased an asset for $10,000 for which you elect to take the Enter the difference between the include on line 3 the standard deduction amount you listed on the dotted line section 179 deduction. You also have amount that would be reported for the an AMT depreciation adjustment of activity on Schedule E or F or Form next to Schedule A, line 16, as your "Standard Deduction Claimed With $700 for other assets depreciated on 4835 for the AMT and the regular tax your Schedule C. amount. If (a) the AMT loss is more than Qualified Disaster Loss." the regular tax loss, (b) the AMT gain is Your section 179 deduction for the less than the regular tax gain, or (c) you regular tax is limited to your net profit have an AMT loss and a regular tax (before any section 179 deduction) of

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$9,000. The $1,000 excess is a section amount on Schedule E, line 38, column IF your filing AND line 4 is THEN enter 179 deduction carryforward for the (c). If the amount in column (c) is larger status is... not over... on line 5... regular tax. than the amount you would otherwise For the AMT, your net profit is enter on line 4, enter the amount from Single $ 518,400 $ 72,900 $9,700, and you are allowed a section column (c) instead and enter “Sch. Q” Married 518,400 56,700 on the dotted line next to line 4. 179 deduction of $9,700 for the AMT. Qualifying 1,036,800 113,400 You have a section 179 deduction Widow(er) carryforward of $300 for the AMT. If your filing status is married filing separately, be sure to include the You include a $700 negative additional amount that must be added to adjustment on line 3 because your line 4 (as explained above) before you Line 7 section 179 deduction for the AMT is compare line 4 with the amount on If you claimed the foreign earned $700 greater than your allowable Schedule E, line 38, column (c). income exclusion, housing exclusion, or regular tax deduction. In the following housing deduction on Form 2555, you year, when you use the $1,000 regular Part II—Alternative must use the Foreign Earned Income tax carryforward, you will have a $700 Tax Worksheet in these instructions to positive related adjustment for the AMT Minimum Tax figure the amount to enter on line 7. because your AMT carryforward is only Line 5—Exemption Amount $300. Form 1040-NR. If you are filing Form If line 4 is more than the amount shown 1040-NR and you reported capital gain Line 4—Alternative Minimum for your filing status in the middle distributions directly on Form 1040-NR, Taxable Income column of the chart on line 5, see the line 7; you reported qualified dividends Exemption Worksheet to figure the If your filing status is married filing on Form 1040-NR, line 3a; or you had a amount to enter on line 5. separately and line 4 is more than gain on both lines 15 and 16 of $745,200, you must include an Form 1040-NR. If you are filing Form Schedule D (Form 1040) (as refigured additional amount on line 4. If line 4 is 1040-NR, use the following chart to for the AMT, if necessary), complete $972,000 or more, include an additional figure the amount to enter on line 5. Part III of Form 6251 and enter the $56,700. Otherwise, include 25% of the However, if line 4 is more than the amount from line 40 on line 7. All other excess of the amount on line 4 over amount shown for your filing status in Form 1040-NR filers, don’t complete $745,200. For example, if the amount the middle column of the chart, use the Part III. Instead, if Form 6251, line 6, is on line 4 is $765,200, enter $770,200 Exemption Worksheet to figure the $197,900 or less ($98,950 or less if instead—the additional $5,000 is 25% amount to enter on line 5. married), figure the amount to enter on of $20,000 ($765,200 minus $745,200). line 7 by multiplying line 6 by 26% (0.26). Otherwise, figure the amount to Special Rule for Holders of a enter on line 7 by multiplying line 6 by 28% (0.28) and subtracting $3,958 Residual Interest in a REMIC ($1,979 if married) from the result. If you held a residual interest in a real estate mortgage investment conduit Line 8—Alternative Minimum (REMIC) in 2020, the amount you enter Tax Foreign Tax Credit on line 4 may not be less than the (AMTFTC) The AMTFTC is a credit that you can Exemption Worksheet— claim against the AMT. You will figure Line 5 Keep for Your Records the AMTFTC using the same limitation rules that apply to the foreign tax credit Note. If Form 6251, line 4, is equal to or more than: $810,000 if single or head of household, for regular tax purposes, but with AMT $1,490,400 if married filing jointly or qualifying widow(er), or $745,200 if married filing separately, amounts. However, you may be able to your exemption is zero. Don’t complete this worksheet; instead, enter the amount from Form 6251, simplify your AMTFTC calculation by line 4, on line 6 and go to line 7. electing to use some of the same 1. Enter: $72,900 if single or head of household; $113,400 if married amounts you used to figure your foreign filing jointly or qualifying widow(er); $56,700 if married filing tax credit. See Simplified Limitation separately ...... 1. Election, later, for more information. 2. Enter your alternative minimum taxable Do I need to fill out line 8? Before income (AMTI) from Form 6251, line 4 ...... 2. figuring your AMTFTC, figure your 3. Enter: $518,400 if single or head of foreign tax credit for the regular tax and household; $1,036,800 if married filing jointly complete Schedule 3 (Form 1040), or qualifying widow(er); $518,400 if married line 1. Next, fill in Form 6251, line 10, as filing separately ...... 3. instructed. If the amount on line 10 is 4. Subtract line 3 from line 2. If zero or less, greater than or equal to the amount on enter -0- ...... 4. line 7, do the following. Leave line 8 blank and enter -0- on 5. Multiply line 4 by 25% (0.25) ...... • 5. line 11. 6. Subtract line 5 from line 1. If zero or less, enter -0-. Also, enter • See Who Must File, earlier, to find out this amount on Form 6251, line 5, and go to Form 6251, ▶ if you must attach Form 6251 to your line 6 ...... 6. return.

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• Determine if you can carry back or instead of the regular tax rate to But you don’t need to make any carry forward your unused 2020 determine if any income is “high-taxed.” adjustments if: AMTFTC. See AMTFTC Carryback and You qualify for the adjustment Step 2. Complete Part I of each AMT • Carryforward, later. If you can carry exception under Qualified Dividends Form 1116 using only income and back or carry forward your unused 2020 and Capital Gain Tax Worksheet deductions that are allowed for the AMT AMTFTC, you will need to complete (Individuals) or Adjustments to foreign and attributable to sources outside the line 8 for your records. qualified dividends under Schedule D United States. If the amount on line 10 is less than Filers in the Instructions for Form 1116, the amount on line 7, figure your Simplified limitation election. If and AMTFTC and enter it on line 8. you previously made or are making the • Line 17 of Form 6251 isn’t more than simplified limitation election, skip Part I $197,900 ($98,950 if married filing Figuring the AMTFTC. If you made an and go to Step 3. For more information separately (on Form 1040 or 1040-SR) election to claim the foreign tax credit on about the simplified limitation election, or married (on Form 1040-NR)). your 2020 tax return without filing Form see Simplified Limitation Election, later. Use your capital gains and losses as 1116, your AMTFTC is the same as the refigured for the AMT to determine foreign tax credit on Schedule 3 (Form Foreign source qualified dividends whether your total amounts are less 1040), line 1. Enter that amount on Form and capital gains. If you have any than the $20,000 threshold under the 6251, line 8. For more information about foreign source qualified dividends or adjustment exception. If you qualify for electing to claim your foreign tax credit foreign source capital gains (including the adjustment exception, your election without filing Form 1116, see the any foreign source capital gain also applies when you determine Instructions for Form 1116. distributions) or losses, use the following instructions to determine whether you must adjust your capital Otherwise, figure your AMTFTC as whether you must make adjustments to gain distributions or other capital gains follows. those amounts before you include the or losses. It also applies to Step 4. Step 1. Separate your foreign source amounts on line 1a or line 5 of the AMT To adjust your foreign source income into categories. See the Form 1116. qualified dividends, multiply your foreign Instructions for Form 1116 for source qualified dividends in each Foreign qualified dividends. You information about categories of income. separate category by 0.5357 if the must adjust your foreign source Complete a separate AMT Form 1116 foreign source qualified dividends are qualified dividends before you include for each separate category of income. taxed at a rate of 15%, and by 0.7143 if those amounts on line 1a of the AMT Write “AMT” and specify the category of they are taxed at a rate of 20%. Include Form 1116 if: income in the top margin of each Form the results on line 1a of the applicable Line 38 of Form 6251 is smaller than 1116. • AMT Form 1116. line 39, and Figuring high-taxed income. • Line 17 of Form 6251 is greater than You adjust your foreign source When applying the separate categories zero. qualified dividends taxed at the 0% rate of income, use the applicable AMT rate by not including them on line 1a. Amounts taxed at the 0% rate are on

Foreign Earned Income Tax Worksheet—Line 7 Keep for Your Records Before you begin: If Form 6251, line 6, is zero, don’t complete this worksheet.

1. Enter the amount from Form 6251, line 6 ...... 1. 2a. Enter the amount from your (and your spouse's if filing jointly) Form 2555, lines 45 and 50 ...... 2a. b. Enter the total amount of any itemized deductions or exclusions you couldn't claim because they are related to excluded income ...... 2b. c. Subtract line 2b from line 2a. If zero or less, enter -0- ...... 2c. 3. Add lines 1 and 2c ...... 3. 4. Tax on the amount on line 3. • If you reported capital gain distributions directly on Form 1040 or 1040-SR, line 7; or you reported qualified dividends on Form 1040 or 1040-SR, line 3a; or you had a gain on both lines 15 and 16 of Schedule D (Form 1040) (as refigured for the AMT, if necessary), enter the amount from line 3 of this worksheet on Form 6251, line 12. Complete the rest of Part III of Form 6251. However, before 4.. completing Part III, see Form 2555, later, to see if you must complete Part III with certain modifications. Then enter the amount from Form 6251, line 40, here. • All others: If line 3 is $197,900 or less ($98,950 or less if married filing separately), multiply line 3 by 26% (0.26). Otherwise, multiply line 3 by 28% (0.28) and subtract $3,958 ($1,979 if married filing separately) from the result. 5. Tax on the amount on line 2c. If line 2c is $197,900 or less ($98,950 or less if married filing separately), multiply line 2c by 26% (0.26). Otherwise, multiply line 2c by 28% (0.28) and subtract $3,958 ($1,979 if married filing separately) from the result ...... 5. 6. Subtract line 5 from line 4. Enter the result here and on Form 6251, line 7 ...... 6.

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line 9 of the Qualified Dividends and • On the AMT Qualified Dividends and line 10. Capital Gain Tax Worksheet or line 22 Capital Gain Tax Worksheet, (a) line 3 of the Schedule D Tax Worksheet. of that worksheet is zero or less, (b) Simplified limitation election. If line 5 of that worksheet is zero, or (c) you previously made or are making the Don’t adjust the amount of any line 23 of that worksheet is equal to or simplified limitation election, complete foreign source qualified ! greater than line 24. Part II and lines 9 through 14. Use your CAUTION dividends you elected to include On the AMT Schedule D Tax AMTFTC carryover, if any, on line 10. on line 4g of AMT Form 4952. • Worksheet, (a) line 18 is zero, (b) line 9 Skip lines 15 and 16. Enter on your AMT is zero or less, or (c) line 45 is equal to Form 1116, line 17, the same amount Individuals with capital gain or greater than line 46. you entered on that line for the regular distributions only. If you have no tax. capital gains or losses other than capital Use Worksheet B in the Instructions Step 4. Enter the amount from line 4 of gain distributions from box 2a of for Form 1116 if you: Form 6251 on line 18 of the AMT Form Form(s) 1099-DIV or substitute • Can’t use Worksheet A, 1116 unless you must complete an AMT statement(s), you must adjust your • Have foreign source capital gains and Worksheet for Line 18. In most cases, foreign source capital gain distributions losses in no more than two separate you must complete an AMT Worksheet if you are required to adjust your foreign categories, for Line 18 if you completed Part III of source qualified dividends under the • Didn’t have any item of unrecaptured Form 6251 and: rules just described or you would be section 1250 gain or 28% rate gain or Line 38 of Form 6251 is smaller than required to adjust your foreign source loss for the AMT, and • line 39, and qualified dividends if you had any. • Don’t have any capital gains taxed at a rate of 0% or 20%. • Line 17 of Form 6251 is greater than To adjust your foreign source capital zero. gain distributions, multiply your foreign Instructions for Worksheets A and But even if you meet the source capital gain distributions in each B. When you complete Worksheet A or requirements above, you don’t need to separate category by 0.5357 if the Worksheet B, use foreign source capital complete an AMT Worksheet for foreign source capital gain distributions gains and losses, as refigured for the Line 18 if: are taxed at a rate of 15%, and by AMT if necessary, and don’t use any • You qualify for the adjustment 0.7143 if they are taxed at a rate of foreign source capital gains you elected exception under Qualified Dividends 20%. Include the results on line 1a of to include on line 4g of AMT Form 4952. and Capital Gain Tax Worksheet the applicable AMT Form 1116. If you are required to complete a (Individuals) or Adjustments to foreign Schedule D for the AMT, use line 16 of You adjust your foreign source qualified dividends under Schedule D that AMT Schedule D to complete line 3 capital gain distributions taxed at the 0% Filers in the Instructions for Form 1116, of Worksheet A or line 4 of the Line 2 rate by not including them on line 1a. and Worksheet for Worksheet B. Use Amounts taxed at the 0% rate are on • Line 17 of Form 6251 isn’t more than 0.5357 instead of the number used for line 9 of the Qualified Dividends and $197,900 ($98,950 if married filing regular tax to complete lines 11, 13, and Capital Gain Tax Worksheet or line 22 separately (on Form 1040 or 1040-SR) 15 of Worksheet B and to complete of the Schedule D Tax Worksheet. or married (on Form 1040-NR)). lines 8, 11, and 17 of the Line 15 Note. Use your capital gains and Don’t adjust the amount of any Worksheet for Worksheet B. foreign source capital gain losses as refigured for the AMT to distributions you elected to If you don’t qualify to use Worksheet determine whether your total amounts include on line 4g of AMT Form 4952. A or Worksheet B, use the instructions are less than the $20,000 threshold for Capital Gains and Losses in Pub. under the adjustment exception. If you Individuals with other capital 514 to determine the adjustments you have any foreign source qualified gains or losses. If any capital gain or make. When using the instructions in dividends or capital gains (or losses), loss is different for the AMT, use Pub. 514 to determine if you must adjust then you must make the same amounts as refigured for the AMT to foreign source capital gains and losses, adjustment exception election you complete this step. Use Worksheet A in make the following substitutions. made in Step 2. the Instructions for Form 1116 to • When the amount of any AMT gain is in the 15% rate group, multiply it by Instructions for AMT Worksheet determine the adjustments you must for Line 18. If you must complete an make to your foreign source capital 0.5357 instead of the number used for regular tax. AMT Worksheet for Line 18 for your gains or losses (as refigured for the AMT Form 1116, you will use the AMT) if you have foreign source capital • When the amount of any AMT gain is in the 20% rate group, multiply it by Worksheet for Line 18 in the Instructions gains or losses (as refigured for the for Form 1116 and do the following. AMT) in no more than two separate 0.7143 instead of the number used for categories and any of the following regular tax. 1. Enter the amount from Form apply. • When the amount of any AMT gain is 6251, line 4, on line 1 of the worksheet. • You aren’t required to make in the 25% rate group, multiply it by 2. Skip lines 2 and 3 of the adjustments to your foreign source 0.8929 instead of the number used for worksheet. qualified dividends under the rules regular tax. • When the amount of any AMT gain is 3. Enter the amount from Form described earlier (or you wouldn’t be 6251, line 36, on line 4 of the worksheet. required to make those adjustments if in the 28% rate group, multiply it by 1.0 4. Multiply line 4 of the worksheet by you had foreign source qualified instead of the number used for regular 0.1071 (instead of the number used for dividends). tax. regular tax). Enter the result on line 5 of Line 15 or 16 of the AMT Schedule D • Step 3. Complete Part II and lines 9 the worksheet. (Form 1040) is zero or a loss. through 17 of the AMT Form 1116. Use your AMTFTC carryover, if any, on

Instructions for Form 6251 (2020) -11- Page 12 of 13 Fileid: … ions/I6251/2020/A/XML/Cycle07/source 14:42 - 8-Jan-2021

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5. Enter the amount from Form used for regular tax. (The amount on Then, use the following instructions 6251, line 33, on line 6 of the worksheet. line 17 of your AMT Form 1116 will be that apply to you. 6. Multiply line 6 of the worksheet by the same as the amount on line 17 of • If none of the statements apply, go to 0.2857 (instead of the number used for your regular tax Form 1116.) You must None of the statements apply, later. regular tax). Enter the result on line 7 of make the election for the first tax year • If only statement (2) applies, go to the worksheet. after 1997 for which you claim an Only statement (2) applies, later. AMTFTC. If you don’t make the election • If statement (3) applies (by itself or in 7. Enter the amount from Form for that year, you may not make it for a combination with statement (1) or (2)), 6251, line 30, on line 8 of the worksheet. later year. Once made, the election go to Beneficiaries of estates or trusts 8. Multiply line 8 of the worksheet by applies to all later tax years and may be first, then go to Statement (1) or (3) 0.4643 (instead of the number used for revoked only with IRS consent. applies, later. regular tax). Enter the result on line 9 of • For all other situations, go to the worksheet. Line 10 Statement (1) or (3) applies, later. 9. Enter the amount from Form If you used Schedule J, Income Averaging for Farmers and Fishermen, None of the statements apply. If (1), 6251, line 23, on line 10 of the (2), or (3) don’t apply, then for Part III of worksheet. to figure your tax on Form 1040, 1040-SR, or 1040-NR, line 16, you must these instructions, the AMT versions of 10. Complete lines 11 and 12 of the refigure that tax (including any tax from your Qualified Dividends and Capital worksheet, as instructed on the Form 8814) without using Schedule J Gain Tax Worksheet, Schedule D Tax worksheet. before completing this line. This is only Worksheet, Unrecaptured Section 1250 11. Enter the amount from your AMT for Form 6251; don’t change the amount Gain Worksheet, 28% Rate Gain Worksheet for Line 18 on your AMT on Form 1040, 1040-SR, or 1040-NR, Worksheet, and Schedule D will be the Form 1116, line 18. line 16. same as those you used for regular tax purposes. Use the regular tax amounts Step 5. Enter the amount from Form Form 1040-NR. If you are filing Form to complete lines 13, 14, and 15. 6251, line 7, on the AMT Form 1116, 1040-NR, add Form 1040-NR, line 16 If you filed Form 2555, see Form line 20. Complete lines 19 through 24 of (minus any tax from Form 4972, Tax on 2555, later, for additional modifications the AMT Form 1116. Lump-Sum Distributions) and Schedule you may have to make before entering 2 (Form 1040), line 2. Subtract from the amounts on lines 13, 14, and 15. Step 6. Complete Part IV of the first result any foreign tax credit from AMT Form 1116 only. Schedule 3 (Form 1040), line 1. If you Statement (1) or (3) applies. If (1) Enter on Form 6251, line 8, the used Schedule J to figure your tax on applies, complete all of the following amount from line 35 of the first AMT Form 1040-NR, line 16, refigure that tax steps. If (3) applies, but (1) doesn’t, Form 1116. without using Schedule J before complete steps 2 through 4 only. completing Form 6251, line 10 (see Attach to your tax return, after Form Step 1. Complete an AMT Form preceding paragraph). 6251, all AMT Forms 1116 you used to 8949 or, if applicable, lines 1a and 8a of figure your AMTFTC. But don’t attach Line 11 an AMT Schedule D, by refiguring, for AMT Forms 1116 if your AMTFTC is the If you are filing Form 1040-NR, enter the example, your basis for the AMT. same as your regular tax foreign tax amount from line 11 on Schedule 2 credit. Step 2. Complete lines 1b through (Form 1040), line 1. 20 of an AMT Schedule D. AMTFTC Carryback and Part III—Tax Computation Step 3. Complete lines 2 through 4 Carryforward of an AMT Qualified Dividends and Using Maximum Capital Capital Gain Tax Worksheet or lines 2 If your AMTFTC is limited, the unused Gains Rates through 13 of an AMT Schedule D Tax amount may generally be carried back Worksheet, whichever applies. (See or forward according to section 904(c). Lines 13, 14, and 15 line 20 of your AMT Schedule D, if you No AMTFTC carryback or carryfor- Determine if any of the following completed one, to determine which ward allowed in 2020. If you made the statements apply. worksheet applies.) election to claim the foreign tax credit on 1. The gain or loss from any Complete lines 3 and 4 of the AMT your 2020 tax return without filing Form transaction reported on Form 8949 or Schedule D Tax Worksheet, using your 1116, any unused AMTFTC for 2020 Schedule D is different for the AMT (for AMT Form 4952. can’t be carried back or forward. In example, because of a different basis addition, you can’t claim any unused for the AMT due to depreciation Step 4. Use amounts from the AMT AMTFTC from another year in 2020. adjustments, an ISO adjustment, or a Qualified Dividends and Capital Gain Tax Worksheet or AMT Schedule D Tax For more information about electing different AMT capital loss carryover Worksheet, whichever applies, and the to claim your foreign tax credit without from 2019). AMT Schedule D to complete lines 13, filing Form 1116, see the Instructions for 2. You didn’t complete either the 14, and 15. Form 1116. Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax If you filed Form 2555, see Form Simplified Limitation Election Worksheet because Form 1040, 2555, later, for additional modifications 1040-SR, or Form 1040-NR, line 15, is you may have to make before entering You may elect to use a simplified zero. amounts on lines 13, 14, and 15. section 904 limitation to figure your AMTFTC. If you do, when figuring your 3. You received a Schedule K-1 Only statement (2) applies. If (2) AMTFTC, you will use the same net (Form 1041) that shows an amount in applies, but (1) and (3) don’t, complete foreign source income for AMT that you box 12 with code B, C, D, E, or F. the following steps.

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Step 1. Complete lines 2 through 4 not below zero) by your AMT capital 1040-NR, line 15; if zero or less, of an AMT Qualified Dividends and gain excess. enter -0-. Capital Gain Tax Worksheet or lines 2 4. Include your AMT capital gain Form 2555. If you are filing Form 2555, through 13 of an AMT Schedule D Tax excess as a loss on line 16 of your AMT the amount you enter on line 20 will take Worksheet, whichever applies. (See Unrecaptured Section 1250 Gain into account your regular tax capital line 20 of your Schedule D to determine Worksheet in the Instructions for gain excess, if any. Don’t refigure it which worksheet applies.) Schedule D (Form 1040). using the amount of your AMT capital Complete lines 3 and 4 of the AMT gain excess. Schedule D Tax Worksheet, using your Also see the instructions for line 20. If you are filing Form 2555 and you AMT Form 4952. Beneficiaries of estates or trusts. If didn’t complete either the Qualified you received a Schedule K-1 (Form Step 2. Use amounts from the AMT Dividends and Capital Gain Tax 1041) that shows an adjustment in Qualified Dividends and Capital Gain Worksheet or the Schedule D Tax box 12, follow the instructions in the Tax Worksheet or AMT Schedule D Tax Worksheet for the regular tax, enter the following table. Worksheet, whichever applies, and the amount from line 3 of the Foreign Schedule D you used for regular tax to IF the code in THEN include that Earned Income Tax Worksheet in the complete lines 13, 14, and 15. box 12 is... adjustment in figuring the Form 1040 and 1040-SR instructions amount on... If you filed Form 2555, see Form (as figured for the regular tax). 2555, later, for additional modifications B line 2 of an AMT Qualified Line 25 you may have to make before entering Dividends and Capital Gain Tax Worksheet or an AMT If you are filing Form 1040-NR, enter on amounts on lines 13, 14, and 15. Schedule D Tax Worksheet, Form 6251, line 25, the amount from the Keep the AMT Form 8949, AMT whichever applies. list below that corresponds to your filing TIP Schedule D, and the applicable C line 5 of an AMT Schedule D. status. AMT worksheet for your D line 12 of an AMT Schedule D. • $441,450 if single. records, but don’t attach any of them to E line 11 of an AMT • $248,300 if married. your tax return. Unrecaptured Section 1250 • $496,600 if qualifying widow(er). Gain Worksheet. Line 27 Note. Don’t decrease your section F line 4 of an AMT 28% Rate If you are filing Form 1040-NR, enter on 1202 exclusion by the amount, if any, on Gain Worksheet. line 2h. Form 6251, line 27, the amount from line 5 of the Qualified Dividends and Form 2555. If you are filing Form 2555 Form 1040-NR. If you are filing Form Capital Gain Tax Worksheet, or the and you have an AMT capital gain 1040-NR, enter on Form 6251, line 13, amount from line 21 of the Schedule D excess, you must complete Part III of the amount from line 4 of the Qualified Tax Worksheet, whichever applies (as Form 6251 with certain modifications. Dividends and Capital Gain Tax figured for the regular tax). If you didn’t To see if you have an AMT capital gain Worksheet, or the amount from line 13 complete either worksheet for the excess, subtract Form 6251, line 6, from of the Schedule D Tax Worksheet, regular tax, enter the amount from Form line 4 of your AMT Qualified Dividends whichever applies (as refigured for the 1040-NR, line 15; if zero or less, and Capital Gain Tax Worksheet or AMT, if necessary). enter -0-. line 10 of your AMT Schedule D Tax Worksheet, whichever applies. If the Form 2555. If you are filing Form 2555, Line 18 the amount you enter on line 27 will take result is greater than zero, that amount If you are filing Form 1040-NR and Form is your AMT capital gain excess. into account your regular tax capital 6251, line 17, is $197,900 or less gain excess, if any. Don’t refigure it If you have AMT capital gain excess, ($98,950 or less if married), multiply using the amount of your AMT capital figure the amounts to enter on lines 13, line 17 by 26% (0.26). Otherwise, gain excess. 14, and 15 of Form 6251 using the multiply line 17 by 28% (0.28) and If you are filing Form 2555 and you following modifications (only for subtract $3,958 ($1,979 if married) from didn’t complete either the Qualified purposes of Part III of Form 6251). the result. Dividends and Capital Gain Tax 1. Reduce the amount you would Line 19 Worksheet or the Schedule D Tax otherwise enter on line 3 of your AMT If you are filing Form 1040-NR, enter Worksheet for the regular tax, enter the Qualified Dividends and Capital Gain amount from Form 6251, line 20. Tax Worksheet or line 9 of your AMT $40,000 ($80,000 if your filing status is Schedule D Tax Worksheet (but not qualifying widow(er)). Line 39 below zero) by your AMT capital gain Line 20 If you are filing Form 1040-NR and Form excess. If you are filing Form 1040-NR, enter on 6251, line 12, is $197,900 or less 2. Reduce the amount you would Form 6251, line 20, the amount from ($98,950 or less if married), multiply otherwise enter on line 2 of your AMT line 5 of the Qualified Dividends and line 12 by 26% (0.26). Otherwise, Qualified Dividends and Capital Gain Capital Gain Tax Worksheet, or the multiply line 12 by 28% (0.28) and Tax Worksheet or line 6 of your AMT amount from line 14 of the Schedule D subtract $3,958 ($1,979 if married) from Schedule D Tax Worksheet (but not Tax Worksheet, whichever applies (as the result. below zero) by any of your AMT capital figured for the regular tax). If you didn’t gain excess not used in (1). complete either worksheet for the 3. Reduce the amount on your AMT regular tax, enter the amount from Form Schedule D (Form 1040), line 18, (but

Instructions for Form 6251 (2020) -13-