Instructions For Form 6251 - Alternative Minimum Tax-Individuals

using the straight line method with a

Charitable Contributions of

$9,000. The $1,000 excess is a section

half-year convention, no salvage value,

179 deduction carryforward for the

Certain Property

and a recovery period of 15 years (22

regular tax.

If you made a charitable contribution of

years for 15-year public utility property).

property to which section 170(e) applies

For the AMT, your net profit is

and you had a different basis for AMT

Figure the excess of the regular tax

$9,700, and you are allowed a section

depreciation over the AMT depreciation

purposes, you may have to make an

179 deduction of $9,700 for the AMT.

separately for each property and

adjustment. See section 170(e) for

You have a section 179 deduction

include on line 26 only positive

details.

carryforward of $300 for the AMT.

amounts.

Alcohol Fuel Credit

You include a $700 negative

Patron’s Adjustment

adjustment on line 26 because your

If your taxable income includes an

section 179 deduction for the AMT is

Distributions you received from a

amount from the alcohol fuel credit

$700 greater than your allowable

cooperative may be includible in

under section 87, include that amount

income. Unless the distributions are

regular tax deduction. In the following

as a negative amount on line 26.

nontaxable, include on line 26 the total

year, when you use the $1,000 regular

Related Adjustments

AMT patronage dividend adjustment

tax carryforward, you will have a $700

reported to you by the cooperative.

positive related adjustment for the AMT

If you have an entry on line 8 because

because your AMT carryforward is only

you deducted investment interest

Pollution Control Facilities

$300.

allocable to an interest in a trade or

The section 169 election to amortize

business, or on line 9, 12, 13, or 15

Line 27—Alternative Tax Net

the basis of a certified pollution control

through 25, or you have any amount

facility over a 60-month period is not

included on line 26 from pre-1987

Operating Loss Deduction

available for the AMT. For facilities

depreciation, patron’s adjustment,

(ATNOLD)

placed in service before 1999, figure

pollution control facilities, or tax shelter

the AMT deduction using ADS. For

The ATNOLD is the sum of the

farm activities, you may have to refigure

facilities placed in service after 1998,

alternative tax net operating loss

any item of income or deduction based

figure the AMT deduction under

(ATNOL) carryovers and carrybacks to

on a limit of income other than AGI or

MACRS using the straight line method.

the tax year, subject to the limitation

modified AGI.

Enter the difference between the

explained below. Figure your ATNOLD

Affected items include the following.

regular tax and AMT deduction. If the

as follows.

•

Section 179 expense deduction

AMT amount is greater, enter the

Your ATNOL for a loss year is the

(Form 4562, line 12).

difference as a negative amount.

•

excess of the deductions allowed for

Expenses for business or rental use

Tax Shelter Farm Activities

figuring AMTI (excluding the ATNOLD)

of your home.

•

over the income included in AMTI.

Conservation expenses (Schedule F,

Figure this adjustment only if you have

Figure this excess with the

line 14).

a gain or loss from a tax shelter farm

•

modifications in section 172(d), taking

Taxable IRA distributions (Form

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

into account the adjustments in

1040, line 15b), if prior year IRA

that is not a passive activity. If the

sections 56 and 58 and preferences in

deductions were different for the AMT

activity is passive, you must include it

section 57 (that is, the section 172(d)

and the regular tax.

with your other passive activities on line

•

modifications must be separately

Self-employed health insurance

18.

figured for the ATNOL). For example,

deduction (Form 1040, line 29).

•

Refigure all gains and losses you

the limitation of nonbusiness

Self-employed SEP, SIMPLE, and

reported for the regular tax from tax

deductions to the amount of

qualified plans deduction (Form 1040,

shelter farm activities by taking into

nonbusiness income must be

line 30).

•

account any AMT adjustments and

separately figured for the ATNOL, using

IRA deduction (Form 1040, line 24),

preferences. Determine your tax shelter

only nonbusiness income and

affected by the earned income limitation

farm activity gain or loss for the AMT

deductions that are included in AMTI.

of section 219(b)(1)(B).

using the same rules you used for the

Figure the difference between the

Your ATNOLD may be limited. To

regular tax with the following

AMT and regular tax amount for each

figure the ATNOLD limitation, you must

modifications. No refigured loss is

item. Combine the amounts for all your

first figure your AMTI without regard to

allowed, except to the extent you are

related adjustments and include the

the ATNOLD. To do this, first figure a

insolvent (see section 58(c)(1)). A

total on line 26. Keep a copy of all

tentative amount for line 9 by treating

refigured loss may not be used in the

computations for your records,

line 27 as if it were zero. Next, figure a

current tax year to offset gains from

including any AMT carryover and basis

tentative total of lines 1 through 26

other tax shelter farm activities. Instead,

amounts.

using the tentative line 9 amount and

any refigured loss must be suspended

treating line 27 as if it were zero. Your

and carried forward indefinitely until (a)

Note: Do not include on line 26 any

ATNOLD limitation is 90% of this

you have a gain in a subsequent tax

adjustment for an item you refigured on

tentative total.

year from that same activity or (b) you

another line of this form (for example,

dispose of the activity.

line 9).

Enter on line 27 the smaller of the

Example. On your Schedule C

Enter the difference between the

ATNOLD or the ATNOLD limitation.

(Form 1040) you have a net profit of

amount that would be reported for the

Any ATNOL not used may be carried

$9,000 before figuring your section 179

activity on Schedule E or F or Form

back 2 years or forward up to 20 years

deduction (and you do not report any

4835 for the AMT and the regular tax

(15 years for loss years beginning

other business income on your return).

amount. If (a) the AMT loss is more

before 1998). In some cases, the

During the year, you purchased an

than the regular tax loss, (b) the AMT

carryback period is longer than 2 years;

asset for $10,000 for which you elect to

gain is less than the regular tax gain, or

see section 172(b) for details. The

take the section 179 deduction. You

treatment of ATNOLs does not affect

also have an AMT depreciation

tax gain, enter the adjustment as a

your regular tax NOL.

adjustment of $700 for other assets

negative amount.

depreciated on your Schedule C.

Note: If you elected under section

Enter any adjustment for amounts

172(b)(3) to forego the carryback period

reported on Schedule D, Form 4684, or

Your section 179 deduction for the

for the regular tax, the election also

Form 4797 for the activity on line 16

regular tax is limited to your net profit

applies for the AMT.

instead.

(before any section 179 deduction) of

-6-

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2003 Page 6

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