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Adjustments to foreign qualified dividends under Schedule D

line for 2006 for the regular tax. Use your MTFTCE

Filers, whichever applies, in the Form 1116 instructions

carryover, if any, on line 10.

when you completed your regular tax Form 1116 (or you

Step 5. If you did not figure your 2006 AMTFTC using the

would have qualified for that adjustment exception if you had

simplified limitation election, complete lines 14 through 16 of

completed a regular tax Form 1116) for 2006, and

the MTFTCE Form 1116.

•

Line 34 of Form 8801 is not more than $175,000 ($87,500

Step 6. If you did not complete Part III of Form 8801, enter

if married filing separately for 2006).

the amount from Form 8801, line 4, on line 17 of the

To adjust your foreign source qualified dividends, multiply

MTFTCE Form 1116 and go to Step 7. If you completed Part

your foreign source qualified dividends in each separate

III of Form 8801, you must complete, for the MTFTCE, the

category by 0.5357. Include the results on line 1a of the

Worksheet for Line 17 in the Form 1116 instructions to

applicable MTFTCE Form 1116. But do not adjust the

determine the amount to enter on line 17 of the MTFTCE

amount of any foreign source qualified dividend you elected

Form 1116 if:

to include on line 4g of Form 4952.

•

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

•

Individuals with capital gain distributions only. If you

Line 34 of Form 8801 is greater than zero.

had no 2006 capital gains or losses other than capital gain

But you do not need to complete the Worksheet for Line

distributions from box 2a of Form(s) 1099-DIV or substitute

17 if:

statement(s), you must adjust your foreign source capital

•

You qualified for the adjustment exception under Qualified

gain distributions before you include those amounts on line

Dividends and Capital Gain Tax Worksheet (Individuals),

1a of the MTFTCE Form 1116 if you are required to adjust

Qualified Dividends Tax Worksheet (Estates and Trusts), or

your foreign source qualified dividends under the rules just

Adjustments to foreign qualified dividends under Schedule D

described or you would be required to adjust your foreign

Filers, whichever applies, in the Form 1116 instructions

source qualified dividends if you had any.

when you completed your regular tax Form 1116 (or you

To adjust your foreign source capital gain distributions,

would have qualified for that adjustment exception if you had

multiply your foreign source capital gain distributions in each

completed a regular tax Form 1116) for 2006, and

•

separate category by 0.5357. Include the results on line 1a

Line 34 of Form 8801 is not more than $175,000 ($87,500

of the applicable MTFTCE Form 1116. But do not adjust the

if married filing separately for 2006).

amount of any foreign source capital gain distribution you

If you do not need to complete the Worksheet for Line 17,

elected to include on line 4g of Form 4952.

enter the amount from line 4 of Form 8801 on line 17 of the

Other capital gains or losses. Use Worksheet A in the

MTFTCE Form 1116.

instructions for the 2006 Form 1116 to determine the

Instructions for MTFTCE Worksheet for Line 17.

adjustments you must make to your foreign source capital

Follow these steps to complete, for the MTFTCE, the

gains or losses if you have foreign source capital gains or

Worksheet for Line 17 in the Form 1116 instructions.

losses in no more than two separate categories and any of

the following apply.

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

•

You figured your 2006 tax using the Qualified Dividends

the worksheet.

and Capital Gain Tax Worksheet in the Form 1040 (or Form

2. Skip lines 2 and 3 of the worksheet.

1040NR) instructions and line 3 of that worksheet minus the

3. Enter the amount from Form 8801, line 44, on line 4 of

amount on line 4e of Form 4952 that you elected to include

the worksheet.

on line 4g of Form 4952 is zero or less.

4. Multiply line 4 of the worksheet by 0.1071 (instead of

•

Line 15 or 16 of your 2006 Schedule D (Form 1040) (line

0.2857). Enter the result on line 5 of the worksheet.

14a or 15 of Schedule D (Form 1041)) is zero or a loss.

5. Enter the amount from Form 8801, line 42, on line 6 of

•

You figured your 2006 tax using Schedule D (Form 1041)

the worksheet.

and line 18 of Schedule D minus the amount on line 4e of

6. Multiply line 6 of the worksheet by 0.4643 (instead of

Form 4952 that you elected to include on line 4g of Form

0.5714). Enter the result on line 7 of the worksheet.

4952 is zero or less.

7. Complete lines 8 and 9 of the worksheet as instructed

•

You figured your 2006 tax using the Schedule D Tax

on the worksheet.

Worksheet in the Schedule D (Form 1040) instructions or in

the Form 1041 instructions and line 9 of that worksheet is

Step 7. Enter the amount from Form 8801, line 11, on the

zero or a loss.

MTFTCE Form 1116, line 19. Complete lines 18, 20, and 21

•

You were not required to make adjustments to your

of the MTFTCE Form 1116.

foreign source qualified dividends under the rules described

Step 8. Complete Part IV of the first MTFTCE Form 1116

above (or you would not have been required to make those

only. Enter the amount from that MTFTCE Form 1116, line

adjustments if you had foreign source qualified dividends).

33, on Form 8801, line 12.

Use Worksheet B if you:

Step 9. Keep all Forms 1116 you used to figure your

•

Cannot use Worksheet A,

MTFTCE, but do not attach them to your tax return.

•

Had 2006 foreign source capital gains and losses in no

more than two separate categories, and

If line 13 of the MTFTCE Form 1116 is greater than line

•

Did not have any item of unrecaptured section 1250 gain

20 of the MTFTCE Form 1116, keep a record of the

or 28% rate gain or loss.

difference. This amount is carried forward and used to figure

your MTFTCE next year.

Instructions for Worksheets A and B. When you

complete Worksheet A or Worksheet B, do not use any

Part II—Current Year Nonrefundable

foreign source capital gains you elected to include on line 4g

of Form 4952. Use 0.5357 instead of 0.4286 to complete

and Refundable Credits and

lines 11, 13, and 15 of Worksheet B and to complete lines 8,

11, and 17 of the Line 15 Worksheet for Worksheet B.

Carryforward to 2008

If you do not qualify to use Worksheet A or Worksheet B,

Line 20

use the instructions for Capital Gains and Losses in Pub.

514 to determine the adjustments you make.

Enter any qualified electric vehicle credit not allowed for

Step 4. Complete lines 9 through 13 of the MTFTCE Form

2006 solely because of the limitation under section

1116. For line 9, use the same amount you entered on that

30(b)(3)(B).

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Instructions For Form 8801 - Credit For Prior Year Minimum Tax-Individuals, Estates, And Trusts - 2007 Page 3

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