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with appropriate modifications to take into account only

only exclusion items. Follow these steps to figure your

exclusion items.

MTFTCE.

Line 4

Step 1. Use a separate 2007 Form 1116 for the MTFTCE for

each separate category of income specified at the top of Form

If your filing status was married filing separately for 2007 and

1116.

line 4 is more than $207,500, you must include an additional

amount on line 4. If line 4 is $340,000 or more, include an

When applying the separate categories of income, use the

additional $33,125 on line 4. Otherwise, include 25% of the

applicable AMT rate instead of the regular tax rate to determine

excess of the amount on line 4 over $207,500. For example, if

if any income is “high-taxed.”

the amount on line 4 is $227,500, enter $232,500 instead — the

Step 2. If you figured your 2007 AMTFTC using the simplified

additional $5,000 is 25% of $20,000 ($227,500 minus

limitation election, skip Part I and enter on the MTFTCE Form

$207,500).

1116, line 16, the same amount you entered on that line for the

Line 9

2007 AMT Form 1116. Otherwise, complete Part I using only

taxable income and exclusion items that are attributable to

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

sources outside the United States. If you had any 2007 foreign

2007, did not file a joint return for 2007, and at least one of the

source qualified dividends or foreign source capital gains

child’s parents was alive at the end of 2007, do not enter more

(including any foreign source capital gain distributions) or

than the sum of the child’s 2007 earned income plus $6,300.

losses, use the instructions under Step 3 to determine whether

A child born on January 1, 1990, is considered to be age 18

you must make adjustments to those amounts before you

at the end of 2007 and is therefore not subject to this limitation.

include the amounts on line 1a or line 5 of the MTFTCE Form

Line 10

1116.

If you filed Form 1040NR for 2007 and had a net gain on the

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

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

determine the amount of foreign source qualified dividends,

than the smaller of that net gain or line 4.

capital gain distributions, and other capital gains and losses to

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

Line 11

If for 2007 you claimed the foreign earned income exclusion or

Foreign qualified dividends. You must adjust your

foreign source qualified dividends before you include those

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

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

must use the worksheet below to figure the amount to enter on

•

Line 49 of Form 8801 is smaller than line 50, and

line 11.

•

Line 37 of Form 8801 is greater than zero.

Form 1040NR. If for 2007 you filed Form 1040NR and you

reported capital gain distributions directly on Form 1040NR, line

But you do not need to make any adjustments if:

•

14; you reported qualified dividends on Form 1040NR, line 10b;

You qualified for the adjustment exception under Qualified

or you had a gain on both lines 15 and 16 of Schedule D (Form

Dividends and Capital Gain Tax Worksheet (Individuals),

1040), complete Part III on page 3 of Form 8801 and enter the

Qualified Dividends Tax Worksheet (Estates and Trusts), or

amount from line 51 on line 11. Otherwise, do not complete Part

Adjustments to foreign qualified dividends under Schedule D

III. Instead, if Form 8801, line 10, is $175,000 or less ($87,500

Filers, whichever applies, in the Form 1116 instructions when

or less if you checked filing status box 3, 4, or 5 on Form

you completed your regular tax Form 1116 (or you would have

1040NR for 2007), figure the amount to enter on line 11 by

qualified for that adjustment exception if you had completed a

multiplying line 10 by 26% (.26). Otherwise, figure the amount

regular tax Form 1116) for 2007, and

•

to enter on line 11 by multiplying line 10 by 28% (.28) and

Line 37 of Form 8801 is not more than $175,000 ($87,500 if

subtracting $3,500 ($1,750 if you checked filing status box 3, 4,

married filing separately for 2007).

or 5 for 2007) from the result.

To adjust your foreign source qualified dividends, multiply

Line 12

your foreign source qualified dividends in each separate

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

category by 0.5357 (instead of 0.4286) if the foreign source

2007 Form 1040 (or Form 1040NR) without filing Form 1116,

qualified dividends are taxed at a rate of 15%. To adjust foreign

enter on Form 8801, line 12, the amount from your 2007 Form

source qualified dividends that are taxed at a rate of 5%,

1040, line 51 (or Form 1040NR, line 46). Otherwise, the

multiply those foreign source qualified dividends in each

minimum tax foreign tax credit on exclusion items (MTFTCE) is

separate category by 0.1786 (instead of 0.1429). Include the

your 2007 AMT foreign tax credit (AMTFTC) refigured using

results on line 1a of the applicable MTFTCE Form 1116. But do

Foreign Earned Income Tax Worksheet —Line 11

Keep for Your Records

Before you begin:

If Form 8801, line 10, is zero, do not complete this worksheet.

1. Enter the amount from Form 8801, line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Enter the amount from your (and your spouse’s if filing jointly) 2007 Form 2555, line 45, or 2007 Form 2555-EZ, line

18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Tax on the amount on line 3.

•

}

If for 2007 you reported capital gain distributions directly on Form 1040, line 13; or 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 3 of this worksheet on Form 8801, line 32. Complete the rest of Part III of Form 8801.

However, before completing Part III, see Forms 2555 and 2555-EZ, on page 4, to see if you must complete

Part III with certain modifications. Then enter the amount from Form 8801, line 51, here.

•

All others: If line 3 is $175,000 or less ($87,500 or less if married filing separately for 2007), multiply line 3

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

for 2007) from the result.

5. Tax on the amount on line 2. If line 2 is $175,000 or less ($87,500 or less if married filing separately for 2007),

multiply line 2 by 26% (.26). Otherwise, multiply line 2 by 28% (.28) and subtract $3,500 ($1,750 if married filing

separately for 2007) from the result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Subtract line 5 from line 4. Enter the result here and on Form 8801, line 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Instructions For Form 8801 - Credit For Prior Year Minimum Tax - Individuals, Estates, And Trusts - 2008 Page 2

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