Instructions For Form 6251 - Alternative Minimum Tax-Individuals

one of whose parents was alive at the

to see if you have an AMTFTC

Line 28—Alternative

end of 2003.

carryback or carryforward to other tax

Minimum Taxable Income

years.

Line 8 of the worksheet. Earned

If your filing status is married filing

income includes wages, tips, and other

Your AMTFTC is your foreign tax

separately and line 28 is more than

amounts received for personal services

credit refigured as follows.

$191,000, you must include an

performed. If the child is engaged as a

1. Use a separate AMT Form 1116

additional amount on line 28. If line 28

sole proprietor or as a partner in a trade

for each separate limitation category

is $307,000 or more, include an

or business in which both personal

specified at the top of Form 1116. Write

additional $29,000. Otherwise, include

services and capital are material

“AMT” in the top margin of each Form

25% of the excess of the amount on

income-producing factors, earned

1116.

line 28 over $191,000. For example, if

income also includes a reasonable

the amount on line 28 is $211,000,

allowance for compensation for

Note: When applying the separate

enter $216,000 instead — the additional

personal services rendered by the child,

limitation categories, use the applicable

$5,000 is 25% of $20,000 ($211,000

but not more than 30% of his or her

AMT rate instead of the regular tax rate

minus $191,000).

share of the net profits from that trade

to determine if any income is

or business (after subtracting the

“high-taxed.”

Special Rule for Holders of a

deduction for one-half of

Residual Interest in a REMIC

2. If you previously made or are

self-employment tax). However, the

making the simplified limitation

If you held a residual interest in a real

30% limit does not apply if there are no

election (see page 8), skip Part I and

estate mortgage investment conduit

net profits from the trade or business. If

enter on the AMT Form 1116, line 16,

(REMIC) in 2003, the amount you enter

capital is not an income-producing

the same amount you entered on that

on line 28 may not be less than the

factor and the child’s personal services

line for the regular tax. If you did not

amount on Schedule E, line 38, column

produced the business income, all of

complete Form 1116 for the regular tax

(c). If the amount in column (c) is larger

the child’s gross income from the trade

and you previously made or are making

than the amount you would otherwise

or business is considered earned

the simplified limitation election,

enter on line 28, enter the amount from

income.

complete Part I and lines 14 through 16

column (c) instead and write “Sch. Q”

of the AMT Form 1116 using regular

on the dotted line next to line 28.

Line 32—Alternative

tax amounts.

Minimum Tax Foreign Tax

Part II—Alternative

If the election does not apply,

Credit (AMTFTC)

complete Part I using only income and

Minimum Tax

deductions that are allowed for the

AMT and attributable to sources outside

To see if you need to figure your

Line 29—Exemption Amount

TIP

the United States. If required by the

AMTFTC, fill in line 34 of Form

Instructions for Form 1116 (based on

6251 as instructed (you will first

If line 28 is more than the amount

your AMT Schedule D), complete

need to figure your foreign tax credit for

shown for your filing status in the

the regular tax and complete Form

Worksheet A, Worksheet B, and the

middle column of the chart on line 29,

Worksheet for Line 17 for the AMT.

1040, line 44). If the amount on line 34

see the worksheet on this page to

(But, if required, make adjustments to

is greater than or equal to the amount

figure the amount to enter on line 29.

your foreign source capital gains and

on line 31, you do not owe the AMT.

Child Under Age 14

losses using the instructions in Pub.

Enter zero on line 35 and see Who

514, Foreign Tax Credit for Individuals,

If this form is for a child under age 14,

Must File on page 1 to find out if you

instead of completing Worksheets A

complete the worksheet on this page. A

must attach Form 6251 to your return.

and B.) If you are required to complete

child under age 14 is a child who was

However, even if you do not owe the

an AMT Worksheet for Line 17, follow

born after January 1, 1990, and at least

AMT, you may need to complete line 32

the instructions under 5 beginning

below.

Exemption Worksheet — Line 29

3. Complete Part II and lines 9

Keep for Your Records

through 13 of the AMT Form 1116. Use

Note: If Form 6251, line 28, is equal to or more than: $273,500 if single or head of household; $382,000

your AMTFTC carryover, if any, on line

if married filing jointly or qualifying widow(er); or $191,000 if married filing separately; your exemption is

10.

zero. Do not complete this worksheet; instead, enter the amount from Form 6251, line 28, on line 30 and

4. If the simplified limitation election

go to line 31.

does not apply, complete lines 14

through 16 of the AMT Form 1116.

1. Enter: $40,250 if single or head of household; $58,000 if married

5. If you did not complete Schedule

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

D (Form 1040) for the regular tax and

separately . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

did not complete Part III of Form 6251,

2. Enter your alternative minimum taxable

enter the AMTI from Form 6251, line

income (AMTI) from Form 6251, line 28 . . . 2.

28, on line 17 of the AMT Form 1116

3. Enter: $112,500 if single or head of

and go to 6 below. Otherwise, follow

household; $150,000 if married filing jointly

these steps to complete, for the AMT,

or qualifying widow(er); $75,000 if married

the Worksheet for Line 17 in the Form

filing separately . . . . . . . . . . . . . . . . . . . 3.

1116 instructions.

4. Subtract line 3 from line 2. If zero or less,

a. Enter the amount from Form

enter -0- . . . . . . . . . . . . . . . . . . . . . . . . 4.

6251, line 28, on line 1 of the AMT

5. Multiply line 4 by 25% (.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

Worksheet for Line 17.

6. Subtract line 5 from line 1. If zero or less, enter -0-. If this form is

b. Complete a Schedule D for the

for a child under age 14, go to line 7 below. Otherwise, stop here

AMT as explained in the instructions for

and enter this amount on Form 6251, line 29, and go to Form

lines 37, 38, 39, 43, and 46 on page 8

6251, line 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(or, if you already completed an AMT

7. Child’s minimum exemption amount . . . . . . . . . . . . . . . . . . . . . . . 7.

$5,600

Schedule D to complete Part III of Form

8. Enter the child’s earned income, if any (see instructions) . . . . . . . 8.

6251, use that Schedule D). Next, enter

9. Add lines 7 and 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.

the amount from Form 6251, line 30, on

10. Enter the smaller of line 6 or line 9 here and on Form 6251, line

line 21 of your AMT Schedule D or line

29, and go to Form 6251, line 30 . . . . . . . . . . . . . . . . . . . . . .

10.

1 of the AMT Schedule D Tax

Worksheet. Then, complete lines 27

-7-

Instructions For Form 6251 - Alternative Minimum Tax-Individuals - 2003 Page 7

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