Instructions For Form 6251 - Alternative Minimum Tax - Individuals - 2009 Page 5
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12How Is Depreciation Refigured
and the $0 of AMT ordinary income for
Act of 1986, this rule applies to property
the first sale.
placed in service after July 31, 1986.)
for the AMT?
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For the regular tax, Ash has $50,000
Property placed in service before
capital gain net income reported on
What Depreciation Is Not
1999. Refigure depreciation for the
Schedule D for the second sale. For the
Refigured for the AMT?
AMT using ADS, with the same
AMT, Ash has a $25,000 short-term
Do not refigure depreciation for the
convention used for the regular tax.
capital loss from the first sale, and a
AMT for the following.
See the following table for the method
$40,000 long-term capital loss from the
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and recovery period to use.
Residential rental property placed in
second sale, resulting in a net capital
service after 1998.
loss of $65,000 for the AMT. However,
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Property Placed in Service Before 1999
Nonresidential real property with a
only $3,000 of the $65,000 net capital
loss is allowed for 2009 for the AMT.
class life of 27.5 years or more placed
IF the property is... THEN use the...
The difference between the regular tax
in service after 1998 that is depreciated
section 1250
straight line method
Schedule D gain of $50,000 and the
for the regular tax using the straight line
property
over 40 years.
$3,000 loss allowed for the AMT results
method.
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in a $53,000 negative adjustment to
Other section 1250 property placed
tangible property
straight line method
include on line 18.
(other than section
over the property’s
in service after 1998 that is depreciated
1250 property)
AMT class life.
for the regular tax using the straight line
Ash has an AMT capital loss
depreciated using
carryover from 2009 to 2010 of
method.
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straight line method
$62,000, of which $22,000 is short-term
Property (other than section 1250
for the regular tax
and $40,000 is long-term. If he has no
property) placed in service after 1998
other Schedule D transactions for 2010,
that is depreciated for the regular tax
any other tangible
150% declining
his adjustment reported on line 18 of
property
balance method,
using the 150% declining balance
his 2010 Form 6251 would be limited to
switching to straight
method or the straight line method.
($3,000), the amount of his capital loss
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line method the first
Property for which you elected to use
limitation for 2010.
tax year it gives a
the alternative depreciation system
larger deduction,
(ADS) of section 168(g) for the regular
Line 19—Post-1986
over the property’s
tax.
AMT class life.
Depreciation
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Qualified property that is or was
This section describes when
eligible for a special depreciation
Property placed in service after 1998.
depreciation must be refigured for the
allowance if the depreciable basis of
Use the same convention and recovery
AMT and how to figure the amount to
the property for the AMT is the same as
period used for the regular tax. For
enter on line 19.
for the regular tax. This applies to any
property other than section 1250
Do not use line 19 for depreciation
special depreciation allowance,
property, use the 150% declining
related to the following.
including those for qualified disaster
balance method, switching to straight
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Employee business expenses
assistance property, qualified reuse and
line the first tax year it gives a larger
claimed on line 21 of Schedule A (Form
recycling property, qualified cellulosic
deduction. For section 1250 property,
1040) or line 9 of Schedule A (Form
biofuel plant property, qualified New
use the straight line method.
1040NR). Take this adjustment into
York Liberty Zone property, qualified
How Is the AMT Class Life
account on line 5.
Gulf Opportunity Zone property, and
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Determined?
Passive activities. Take this
Kansas disaster area qualified recovery
adjustment into account on line 20.
The class life used for the AMT is not
assistance property. The special
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An activity for which you are not at
necessarily the same as the recovery
allowance is deductible for the AMT,
risk or income or loss from a
period used for the regular tax. The
and there also is no adjustment
partnership or an S corporation if the
class lives for the AMT are listed in
required for any depreciation figured on
basis limitations apply. Take this
Rev. Proc. 87-56, 1987-2 C.B. 674, and
the remaining basis of the qualified
adjustment into account on line 21.
in Pub. 946, How To Depreciate
property if the depreciable basis of the
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A tax shelter farm activity. Take this
Property. Use 12 years for any tangible
property for the AMT is the same as for
adjustment into account on line 28.
personal property not assigned a class
the regular tax. Property for which an
life.
What Depreciation Must Be
election is in effect to not have the
special allowance apply is not qualified
Refigured for the AMT?
See Pub. 946 for tables that can
property.
TIP
be used to figure AMT
Generally, you must refigure
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Any part of the cost of any property
depreciation. Rev. Proc. 89-15,
depreciation for the AMT, including
1989-1 C.B. 816, has special rules for
for which you elected to take a section
depreciation allocable to inventory
short years and for property disposed
179 expense deduction. The reduction
costs, for:
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of before the end of the recovery
to the depreciable basis of section 179
Property placed in service after 1998
period.
property by the amount of the section
that is depreciated for the regular tax
179 expense deduction is the same for
using the 200% declining balance
How Is the Adjustment
the regular tax and the AMT.
method (generally 3-, 5-, 7-, and
Figured?
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10-year property under the modified
Motion picture films, videotapes, or
Subtract the AMT deduction for
accelerated cost recovery system
sound recordings.
depreciation from the regular tax
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(MACRS), except for qualified property
Property depreciated under the
deduction and enter the result. If the
eligible for the special depreciation
unit-of-production method or any other
AMT deduction is more than the regular
allowance (discussed later on this
method not expressed in a term of
tax deduction, enter the difference as a
page));
years.
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negative amount.
Section 1250 property placed in
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Qualified Indian reservation property.
service after 1998 that is not
In addition to the AMT adjustment to
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Qualified revitalization expenditures
depreciated for the regular tax using
your deduction for depreciation, you
for a building for which you elected to
the straight line method; and
must also adjust the amount of
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claim the commercial revitalization
Tangible property placed in service
depreciation that was capitalized, if any,
deduction under section 1400I.
after 1986 and before 1999. (If the
to account for the difference between
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transitional election was made under
A natural gas gathering line placed in
the rules for the regular tax and the
section 203(a)(1)(B) of the Tax Reform
service after April 11, 2005.
AMT. Include on this line the current
-5-
Instructions for Form 6251 (2009)
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