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2 0 07

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

(MTCNOLD). However, do not limit the MTCNOLD to 90%

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

otherwise noted.

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

General Instructions

MTCNOLD.) In Part II of Schedule I, complete lines 35 and

36 without taking into account any basis adjustments arising

from deferral items. If the amount on Schedule I, line 29, is

What’s New

zero or less, enter -0- on Form 8801, line 4. Otherwise,

•

If you have any unused minimum tax credit carryforward

enter on Form 8801, line 4, the amount from Schedule I, line

from 2004 or earlier years, you may qualify for a refundable

29, adjusted for exclusion items that were allocated to the

credit for part or all of that amount, even if the total amount

beneficiary.

of your current year credit exceeds the tax liability limit. To

figure your current year refundable credit, complete Part IV

Line 2

of Form 8801. Estates and trusts are not allowed to claim

Enter on this line the adjustments and preferences treated

this refundable credit.

as exclusion items (except the standard deduction).

•

If you claimed the foreign earned income exclusion or the

Exclusion items are only the following AMT adjustments and

housing exclusion for 2006 on Form 2555 or 2555-EZ, you

preferences: itemized deductions (including any investment

must use the Foreign Earned Income Tax Worksheet to

interest expense reported on Schedule E), certain

figure the amount to enter on line 11. See the instructions

tax-exempt interest, depletion, the section 1202 exclusion,

for line 11 on page 2.

and any other adjustments related to exclusion items. Do

not include the standard deduction. It has already been

Purpose of Form

included on line 1. Combine lines 2 through 5, 7 through 9,

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

11, and 12 of your 2006 Form 6251. Do not include any

figure the current year nonrefundable credit, if any, for

amount from line 14 of the 2006 Form 6251. Instead, include

alternative minimum tax (AMT) you incurred in prior tax

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

years; to figure the current year refundable credit

1041) you received for 2006. That amount is shown in box

(individuals only), if any, for any unused credit carryforward

12 with code J. If you included on line 26 of the 2006 Form

from 2004; and to figure any credit carryforward to 2008.

6251 any adjustments related to exclusion items, also

include those adjustments in the amount you enter on line 2.

Who Should File

Enter the total on line 2.

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

Exclusion items on other lines. If you included any

that for 2006 had:

exclusion item on a line not listed above, include that item in

•

An AMT liability and adjustments or preferences other

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

than exclusion items,

was included on Form 6251 as an adjustment on line 18

•

A minimum tax credit carryforward to 2007, or

(passive activities) instead of on line 9 (depletion), include it

•

An unallowed qualified electric vehicle credit (see the

as an exclusion item in the amount you enter on line 2.

instructions for line 20).

Line 3

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

Your minimum tax credit net operating loss deduction

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

operating loss (MTCNOL) carryovers and carrybacks to

Specific Instructions

2006. Your MTCNOL is figured as follows.

The AMT is caused by two types of adjustments and

Your MTCNOL is the excess of the deductions (excluding

preferences — deferral items and exclusion items. Deferral

the MTCNOLD) over the income used to figure alternative

items (for example, depreciation) generally do not cause a

minimum taxable income (AMTI) taking into account only

permanent difference in taxable income over time. Exclusion

exclusion items. Figure this excess with the modifications in

items (for example, the standard deduction), on the other

section 172(d) taking into account only exclusion items.

hand, do cause a permanent difference. The minimum tax

(That is, the section 172(d) modifications must be figured

credit is allowed only for the AMT caused by deferral items.

separately for the MTCNOL.)

Part I—Net Minimum Tax on

For example, the limitation of nonbusiness deductions to

the amount of nonbusiness income must be figured

Exclusion Items

separately for the MTCNOL using only nonbusiness income

and deductions but taking into account only exclusion items.

Line 1—Estates and Trusts

However, ignore the disallowance of the deduction for

personal exemptions under section 172(d)(3) because it has

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

already been taken into account to figure AMTI attributable

of another 2006 Form 1041, Schedule I. For Part I of

only to exclusion items.

Schedule I, take into account only exclusion items (the

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

To determine the amount of MTCNOL that may be

other adjustments related to exclusion items included on line

carried to tax years other than 2006, apply sections

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

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

minimum tax credit net operating loss deduction

into account only exclusion items.

Cat. No. 10600C

Instructions For Form 8801 - Credit For Prior Year Minimum Tax-Individuals, Estates, And Trusts - 2007

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