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($1,750 if you checked filing status box 3, 4, or 5 for 2006)

Line 4

from the result.

If your filing status was married filing separately for 2006

and line 4 is more than $200,100, you must include an

Line 12

additional amount on line 4. If line 4 is $325,200 or more,

If you made an election to claim the foreign tax credit on

include an additional $31,275 on line 4. Otherwise, include

your 2006 Form 1040 (or Form 1040NR) without filing Form

25% of the excess of the amount on line 4 over $200,100.

1116, enter on Form 8801, line 12, the amount from your

For example, if the amount on line 4 is $220,100, enter

2006 Form 1040, line 47 (or Form 1040NR, line 44).

$225,100 instead — the additional $5,000 is 25% of $20,000

Otherwise, the minimum tax foreign tax credit on exclusion

($220,100 minus $200,100).

items (MTFTCE) is your 2006 AMT foreign tax credit

(AMTFTC) refigured using only exclusion items. Follow

Line 9

these steps to figure your MTFTCE.

If this form is for a child who was under age 18 at the end of

Step 1. Use a separate 2006 Form 1116 for the MTFTCE

2006, did not file a joint return for 2006, and at least one of

for each separate category of income specified at the top of

the child’s parents was alive at the end of 2006, do not enter

Form 1116.

more than the sum of the child’s 2006 earned income plus

When applying the separate categories of income, use

$6,050.

the applicable AMT rate instead of the regular tax rate to

A child born on January 1, 1989, is considered to be age

determine if any income is “high-taxed.”

18 at the end of 2006 and is therefore not subject to this

Step 2. If you figured your 2006 AMTFTC using the

limitation.

simplified limitation election, skip Part I and enter on the

MTFTCE Form 1116, line 16, the same amount you entered

Line 10

on that line for the 2006 AMT Form 1116. Otherwise,

If you filed Form 1040NR for 2006 and had a net gain on the

complete Part I using only taxable income and exclusion

disposition of U.S. real property interests, line 10 cannot be

items that are attributable to sources outside the United

less than the smaller of that net gain or line 4.

States. If you had any 2006 foreign source qualified

dividends or foreign source capital gains (including any

Line 11

foreign source capital gain distributions) or losses, use the

instructions under Step 3 to determine whether you must

If for 2006 you claimed the foreign earned income exclusion

make adjustments to those amounts before you include the

or the housing exclusion on Form 2555 or Form 2555-EZ,

amounts on line 1a or line 5 of the MTFTCE Form 1116.

you must use the worksheet below to figure the amount to

enter on line 11.

Step 3. Follow the instructions below, if applicable, to

determine the amount of foreign source qualified dividends,

Form 1040NR. If for 2006 you filed Form 1040NR and you

capital gain distributions, and other capital gains and losses

reported capital gain distributions directly on Form 1040NR,

to include on line 1a and line 5 of the MTFTCE Form 1116.

line 14; you reported qualified dividends on Form 1040NR,

Foreign qualified dividends. You must adjust your

line 10b; or you had a gain on both lines 15 and 16 of

foreign source qualified dividends before you include those

Schedule D (Form 1040), complete Part III on page 2 of

amounts on line 1a of the MTFTCE Form 1116 if:

Form 8801 and enter the amount from line 48 on line 11.

•

Line 46 of Form 8801 is smaller than line 47, and

Otherwise, do not complete Part III. Instead, if Form 8801,

•

Line 34 of Form 8801 is greater than zero.

line 10, is $175,000 or less ($87,500 or less if you checked

filing status box 3, 4, or 5 on Form 1040NR for 2006), figure

But you do not need to make any adjustments if:

•

the amount to enter on line 11 by multiplying line 10 by 26%

You qualified for the adjustment exception under Qualified

(.26). Otherwise, figure the amount to enter on line 11 by

Dividends and Capital Gain Tax Worksheet (Individuals),

multiplying line 10 by 28% (.28) and subtracting $3,500

Qualified Dividends Tax Worksheet (Estates and Trusts), or

Keep for Your

Foreign Earned Income Tax Worksheet—Line 11

Records

1. Enter the amount from Form 8801, line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Enter the amount from Form 8801, line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Subtract line 2 from line 1. If less than zero, enter as a negative amount . . . . . . . . . . . . . . . . . . . . . . . 3.

4. Enter the amount from your (and your spouse’s if filing jointly) 2006 Form 2555, line 45, or

2006 Form 2555-EZ, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Enter the total amount of any itemized deductions you could not claim for 2006 because

they were related to excluded income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

6. Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Combine lines 3 and 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

8. Tax on amount on line 7.

}

•

If for 2006 you reported capital gain distributions directly on Form 1040, line 13; you reported

qualified dividends on Form 1040, line 9b; or you had a gain on both lines 15 and 16 of Schedule D

(Form 1040), enter the amount from line 7 of this worksheet on Form 8801, line 29. Then complete the

rest of Part III of Form 8801 and enter the amount from line 48 here.

•

All others: If line 7 is $175,000 or less ($87,500 or less if married filing separately for 2006), multiply

line 7 by 26% (.26). Otherwise, multiply line 7 by 28% (.28) and subtract $3,500 ($1,750 if married filing

separately for 2006) from the result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Tax on amount on line 6. If line 6 is $175,000 or less ($87,500 or less if married filing separately for 2006), multiply

line 6 by 26% (.26). Otherwise, multiply line 6 by 28% (.28) and subtract $3,500 ($1,750 if married filing separately

for 2006) from the result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. Subtract line 9 from line 8. Enter here and on Form 8801, line 11. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . 10.

-2-

Instructions For Form 8801 - Credit For Prior Year Minimum Tax-Individuals, Estates, And Trusts - 2007 Page 2

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