Instructions For Form 6251 - Alternative Minimum Tax-Individuals

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Department of the Treasury

Internal Revenue Service

Instructions for Form 6251

Alternative Minimum Tax—Individuals

Section references are to the Internal Revenue Code.

Recordkeeping

Credit for Prior Year

General Instructions

For the AMT, certain items of income,

Minimum Tax

deductions, etc., receive different tax

Changes To Note

See Form 8801, Credit for Prior Year

treatment than for the regular tax.

•

Minimum Tax — Individuals, Estates,

For 2003, the exemption amount has

Therefore, you need to refigure items

and Trusts, if you paid AMT for 2002 or

increased to $40,250 ($58,000 if

for the AMT that you figured for the

you had a minimum tax credit

regular tax. In some cases, you may

married filing jointly or qualifying

carryforward on your 2002 Form 8801.

widow(er); $29,000 if married filing

wish to do this by completing the

If you pay AMT for 2003, you may be

applicable tax form a second time. If

separately).

able to take a credit on Form 8801 for

•

you do complete another form, do not

The 20% maximum tax rate on net

2004.

attach it to your tax return (except for

capital gain has been reduced to 15%,

Form 1116, Foreign Tax Credit — see

and the 10% rate has been reduced to

Optional Write-Off for

the instructions for line 32 beginning on

5%, for sales and other dispositions

page 7), but keep it for your records.

after May 5, 2003 (and installment

Certain Expenditures

payments received after that date). See

For the regular tax, some deductions

There is no AMT adjustment for the

Part III.

and credits may result in carrybacks or

•

following items if you elect for the

Beginning in 2003, your alternative

carryforwards to other tax years.

regular tax to deduct them ratably over

tax net operating loss deduction

Examples are investment interest

the period of time shown.

(ATNOLD) is generally limited to 90%

•

expense, a net operating loss, a capital

Circulation expenditures — 3 years

of your alternative minimum taxable

loss, a passive activity loss, and the

(section 173).

income (figured without regard to the

foreign tax credit. Because you may

•

Research and experimental

ATNOLD). See the line 27 instructions

have to refigure these items for the

expenditures — 10 years (section

beginning on page 6.

AMT, the carryback or carryforward

•

174(a)).

For 2003, the minimum exemption

amount may be different for the AMT

•

Mining exploration and development

amount for a child under age 14 has

than for the regular tax. Your at-risk

costs — 10 years (sections 616(a) and

increased to $5,600.

limits and basis amounts also may

617(a)).

differ for the AMT. Therefore, you must

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Intangible drilling costs — 60 months

Purpose of Form

keep records of these different

(section 263(c)).

amounts.

Use Form 6251 to figure the amount, if

See section 59(e) for more details.

any, of your alternative minimum tax

Partners and

(AMT). The AMT applies to taxpayers

who have certain types of income that

Shareholders

Specific Instructions

receive special treatment, or who

qualify for certain special deductions,

If you are a partner in a partnership or a

under the tax law. Because of these

shareholder in an S corporation, see

If you claim the standard

special benefits, some taxpayers with

Schedule K-1 and its instructions to

deduction on Form 1040, you

substantial economic income can

figure your adjustments or preferences

must also use the standard

CAUTION

significantly reduce their regular tax.

from the partnership or S corporation to

deduction in figuring the AMT.

The AMT ensures that these taxpayers

include on Form 6251.

However, if you owe AMT, you may be

pay at least a minimum amount of tax.

able to lower your total tax (regular tax

Nonresident Aliens

plus AMT) by itemizing deductions on

Also use Form 6251 to figure the tax

Form 1040.

If you are a nonresident alien and you

liability limit on the general business

disposed of U.S. real property interests

credit, the qualified electric vehicle

Part I—Alternative

at a gain, you must make a special

credit, the nonconventional source fuel

computation. Fill in Form 6251 through

credit, or the credit for prior year

Minimum Taxable

line 30. If your net gain from the

minimum tax.

Income (AMTI)

disposition of U.S. real property

interests and the amount on line 28 are

Who Must File

both greater than the tentative amount

To avoid duplication, any

you figured for line 30, replace the

Attach Form 6251 to your return if:

adjustment or preference for line

•

amount on line 30 with the smaller of

5, 18, or 19 or for a tax shelter

Line 31 is greater than line 34, or

CAUTION

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that net gain or the amount on line 28.

farm activity on line 26 must not be

You claim any general business

Also, write “RPI” on the dotted line next

taken into account in figuring the

credit, the qualified electric vehicle

to line 30. Otherwise, do not change

amount to enter for any other

credit, the nonconventional source fuel

line 30.

adjustment or preference.

credit, or the credit for prior year

minimum tax, or

Note: If you are filing Form 1040NR,

•

Line 1

treat any reference in these instructions

The total of lines 8 through 27 is

or on Form 6251 to a line on Form

negative and line 31 would be greater

If Form 1040, line 40, includes a

1040 as a reference to the

than line 34 if you did not take into

write-in amount (such as a capital

corresponding line on Form 1040NR.

account lines 8 through 27.

construction fund deduction for

Cat. No. 64277P

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2003

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