Instructions For Form 8801 - 2006 printable pdf download

2006

Department of the Treasury

Internal Revenue Service

Instructions for Form 8801

Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts

Section references are to the Internal Revenue Code unless

Line 2

otherwise noted.

Enter on this line the adjustments and preferences

General Instructions

treated as exclusion items (except the standard

deduction). Exclusion items are only the following AMT

adjustments and preferences: itemized deductions

Purpose of Form

(including any investment interest expense reported on

Use Form 8801 if you are an individual, estate, or trust to

Schedule E), certain tax-exempt interest, depletion, the

figure the minimum tax credit, if any, for alternative

section 1202 exclusion, and any other adjustments

minimum tax (AMT) you incurred in prior tax years and to

related to exclusion items. Do not include the standard

figure any minimum tax credit carryforward.

deduction. It has already been included on line 1.

Combine lines 2 through 5, 7 through 9, 11, and 12 of

Who Should File

your 2005 Form 6251. Do not include any amount from

line 14 of the 2005 Form 6251. Instead, include the

Complete Form 8801 if you are an individual, estate, or

exclusion item amount from the Schedule(s) K-1 (Form

trust that for 2005 had:

•

1041) you received for 2005. That amount is shown in

An AMT liability and adjustments or preferences other

box 12 with code J. If you included on line 26 of the 2005

than exclusion items,

•

Form 6251 any adjustments related to exclusion items,

A minimum tax credit carryforward to 2006, or

•

also include those adjustments in the amount you enter

An unallowed nonconventional source fuel credit or

on line 2. Enter the total on line 2.

qualified electric vehicle credit (see the instructions for

line 20).

Exclusion items on other lines. If you included any

exclusion item on a line not listed above, include that

File Form 8801 only if line 21 is more than zero.

item in the amount you enter on line 2. For example, if

depletion was included on Form 6251 as an adjustment

on line 18 (passive activities) instead of on line 9

Specific Instructions

(depletion), include it as an exclusion item in the amount

you enter on line 2.

The AMT is caused by two types of adjustments and

preferences —deferral items and exclusion items.

Line 3

Deferral items (for example, depreciation) generally do

Your minimum tax credit net operating loss deduction

not cause a permanent difference in taxable income over

(MTCNOLD) is the total of the minimum tax credit net

time. Exclusion items (for example, the standard

operating loss (MTCNOL) carryovers and carrybacks to

deduction), on the other hand, do cause a permanent

2005. Your MTCNOL is figured as follows.

difference. The minimum tax credit is allowed only for the

Your MTCNOL is the excess of the deductions

AMT caused by deferral items.

(excluding the MTCNOLD) over the income used to

figure alternative minimum taxable income (AMTI) taking

Part I—Net Minimum Tax on

into account only exclusion items. Figure this excess with

Exclusion Items

the modifications in section 172(d) taking into account

only exclusion items. (That is, the section 172(d)

modifications must be figured separately for the

Line 1—Estates and Trusts

MTCNOL.)

Skip lines 1 through 3 of Form 8801. Complete Parts I

For example, the limitation of nonbusiness deductions

and II of another 2005 Form 1041, Schedule I. For Part I

to the amount of nonbusiness income must be figured

of Schedule I, take into account only exclusion items (the

separately for the MTCNOL using only nonbusiness

amounts included on lines 2 through 6, 8, and 9, and any

income and deductions but taking into account only

other adjustments related to exclusion items included on

exclusion items. However, ignore the disallowance of the

line 23 of Schedule I). On line 24 of Schedule I, use the

deduction for personal exemptions under section

minimum tax credit net operating loss deduction

172(d)(3) because it has already been taken into account

(MTCNOLD). However, do not limit the MTCNOLD to

to figure AMTI attributable only to exclusion items.

90% of the total of lines 1 through 23 of Schedule I. (See

the instructions for line 3 on this page for how to figure

To determine the amount of MTCNOL that may be

the MTCNOLD.) In Part II of Schedule I, complete lines

carried to tax years other than 2005, apply sections

35 and 36 without taking into account any basis

172(b)(2) and 172(d) with appropriate modifications to

adjustments arising from deferral items. If the amount on

take into account only exclusion items.

Schedule I, line 29, is zero or less, enter -0- on Form

Line 4

8801, line 4. Otherwise, enter on Form 8801, line 4, the

amount from Schedule I, line 29, adjusted for exclusion

If your filing status was married filing separately for 2005

items that were allocated to the beneficiary.

and line 4 is more than $191,000, you must include an

Cat. No. 10600C

Instructions For Form 8801 - 2006

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