Instructions For Form 6251 - 2008 (Page 4 of 12) in pdf

restriction) when your rights in the

Schedule D for the AMT, if applicable,

(proceeds minus his AMT basis of

acquired stock first become

by taking into account any adjustments

$100,000).

transferable or when these rights are

you made this year or in previous years

Ash has no other sales of stock or

no longer subject to a substantial risk of

that affect your basis or otherwise result

other capital assets for 2008. Ash

forfeiture, over

in a different amount for the AMT.

enters a total negative adjustment of

2. The amount you paid for the

$118,000 on line 17 of his 2008 Form

If you have a capital loss after

stock, including any amount you paid

6251, figured as follows:

refiguring Schedule D for the AMT,

•

for the ISO used to acquire the stock.

Ash figures a negative adjustment of

apply the $3,000 capital loss limitation

$65,000 for the difference between the

separately to the AMT loss. Because

Note. Even if your rights in the stock

$65,000 of regular tax ordinary income

the amount of your gains and losses

are not transferable and are subject to

and the $0 of AMT ordinary income for

may be different for the AMT, the

a substantial risk of forfeiture, you may

the first sale.

amount of any capital loss carryover

elect to include in AMT income the

•

For the regular tax, Ash has $50,000

also may be different for the AMT. See

excess of the stock’s fair market value

capital gain net income reported on

the example that begins below. To

(determined without regard to any lapse

Schedule D for the second sale. For the

figure your AMT capital loss carryover,

restriction) over the exercise price upon

AMT, Ash has a $25,000 short-term

fill out an AMT Capital Loss Carryover

the transfer to you of the stock acquired

capital loss from the first sale, and a

Worksheet in the Schedule D

through exercise of the option. You

$40,000 long-term capital loss from the

instructions.

must make the election by the 30th day

second sale, resulting in a net capital

after the date of the transfer. See Pub.

For each of the four items listed

loss of $65,000 for the AMT. However,

525, Taxable and Nontaxable Income,

earlier, figure the difference between

only $3,000 of the $65,000 net capital

for more details.

the amount included in taxable income

loss is allowed for 2008 for the AMT.

for the regular tax and the amount

If you acquired stock by exercising

The difference between the regular tax

included in income for the AMT. Treat

an ISO and you disposed of that stock

Schedule D gain of $50,000 and the

the difference as a negative amount if

in the same year, the tax treatment

$3,000 loss allowed for the AMT results

(a) both the AMT and regular tax

under the regular tax and the AMT is

in a $53,000 negative adjustment to

amounts are zero or more and the AMT

the same, and no adjustment is

include on line 17.

amount is less than the regular tax

required.

Ash has an AMT capital loss

amount or (b) the AMT amount is a

Increase your AMT basis in any

carryover from 2008 to 2009 of

loss, and the regular tax amount is a

$62,000, of which $22,000 is short-term

stock acquired through the exercise of

smaller loss or zero or more.

and $40,000 is long-term. If he has no

an ISO by the amount of the

adjustment. Keep adequate records for

Enter on line 17 the combined

other Schedule D transactions for 2009,

adjustments for the four items listed

his adjustment reported on line 17 of

both the AMT and regular tax so that

you can figure your adjustment. See

earlier.

his 2009 Form 6251 would be limited to

the instructions for line 17.

($3,000), the amount of his capital loss

Example. On March 13, 2007,

limitation for 2009.

Victor Ash, whose filing status is single,

Line 16—Large Partnerships

paid $20,000 to exercise an incentive

Line 18—Post-1986

If you were a partner in an electing

stock option (which was granted to him

Depreciation

large partnership, enter the amount

on January 3, 2006) to buy 200 shares

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

This section describes when

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

6. Take into account any amount from

depreciation must be refigured for the

difference between his cost and the

box 5 on Form 6251, line 19.

AMT and how to figure the amount to

value of the stock at the time he

enter on line 18.

exercised the option is not taxable for

Line 17—Disposition of

the regular tax. His regular tax basis in

Do not use line 18 for depreciation

Property

the stock at the end of 2007 is $20,000.

related to the following.

•

Your AMT gain or loss from the

For the AMT, however, Ash must

Employee business expenses

disposition of property may be different

include the $180,000 as an adjustment

claimed on line 21 of Schedule A (Form

from your gain or loss for the regular

on his 2007 Form 6251. His AMT basis

1040) or line 9 of Schedule A (Form

tax. This is because the property may

in the stock at the end of 2007 is

1040NR). Take this adjustment into

have a different adjusted basis for the

$200,000.

account on line 5.

•

AMT. Use this line to report any AMT

Passive activities. Take this

On January 18, 2008, Ash sold 100

adjustment resulting from refiguring:

adjustment into account on line 19.

of the shares for $75,000. Because Ash

•

An activity for which you are not at

1. Gain or loss from the sale,

did not hold these shares more than 1

risk or income or loss from a

exchange, or involuntary conversion of

year, that sale is a disqualifying

partnership or an S corporation if the

property reported on Form 4797, Sales

disposition. For the regular tax, Ash has

basis limitations apply. Take this

of Business Property;

ordinary income of $65,000 (proceeds

adjustment into account on line 20.

2. Casualty gain or loss to business

minus his $10,000 basis in the 100

•

A tax shelter farm activity. Take this

or income-producing property reported

shares). Ash has no capital gain or loss

adjustment into account on line 27.

on Form 4684, Casualties and Thefts;

for the regular tax resulting from the

3. Ordinary income from the

sale. For the AMT, Ash has no ordinary

What Depreciation Must Be

disposition of property not already

income, but has a short-term capital

Refigured for the AMT?

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

loss of $25,000 (proceeds minus his

Generally, you must refigure

any other line on Form 6251, such as a

$100,000 AMT basis in the 100

depreciation for the AMT, including

disqualifying disposition of stock

shares).

depreciation allocable to inventory

acquired in a prior year by exercising

On April 21, 2008, Ash sold the other

costs, for:

an incentive stock option; and

•

100 shares for $60,000. Because he

Property placed in service after 1998

4. Capital gain or loss (including any

held the shares for more than 1 year,

that is depreciated for the regular tax

carryover that is different for the AMT)

the sale is not a disqualifying

using the 200% declining balance

reported on Schedule D (Form 1040),

disposition. For the regular tax, Ash has

method (generally 3-, 5-, 7-, and

Capital Gains and Losses.

a long-term capital gain of $50,000

10-year property under the modified

First figure any ordinary income

(proceeds minus his regular tax basis of

accelerated cost recovery system

adjustment related to (3) above. Then,

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

(MACRS), except for qualified property

refigure Form 4684, Form 4797, and

long-term capital loss of $40,000

eligible for the special depreciation

-4-

Instructions For Form 6251 - 2008 Page 4

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