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not adjust the amount of any foreign source qualified dividend

You qualified for the adjustment exception under Qualified

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

Dividends and Capital Gain Tax Worksheet (Individuals),

Qualified Dividends Tax Worksheet (Estates and Trusts), or

Individuals with capital gain distributions only. If you

Adjustments to foreign qualified dividends under Schedule D

had no 2007 capital gains or losses other than capital gain

Filers, whichever applies, in the Form 1116 instructions when

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

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

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

qualified for that adjustment exception if you had completed a

distributions before you include those amounts on line 1a of the

regular tax Form 1116) for 2007, and

MTFTCE Form 1116 if you are required to adjust your foreign

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

source qualified dividends under the rules just described or you

married filing separately for 2007).

would be required to adjust your foreign source qualified

dividends if you had any.

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

To adjust your foreign source capital gain distributions,

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

multiply your foreign source capital gain distributions in each

MTFTCE Form 1116.

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

Instructions for MTFTCE Worksheet for Line 17. Follow

source capital gain distributions are taxed at a rate of 15%. To

these steps to complete, for the MTFTCE, the Worksheet for

adjust foreign source capital gain distributions that are taxed at

Line 17 in the Form 1116 instructions.

a rate of 5%, multiply those foreign source capital gain

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

distributions in each separate category by 0.1786 (instead of

worksheet.

0.1429). Include the results on line 1a of the applicable

2. Skip lines 2 and 3 of the worksheet.

MTFTCE Form 1116. But do not adjust the amount of any

3. Enter the amount from Form 8801, line 47, on line 4 of

foreign source capital gain distribution you elected to include on

the worksheet.

line 4g of Form 4952.

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

Other capital gains or losses. Use Worksheet A in the

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

instructions for the 2007 Form 1116 to determine the

5. Enter the amount from Form 8801, line 45, on line 6 of

adjustments you must make to your foreign source capital gains

the worksheet.

or losses if you have foreign source capital gains or losses in no

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

more than two separate categories and any of the following

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

apply.

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7. Enter the amount from Form 8801, line 43, on line 8 of

You figured your 2007 tax using the Qualified Dividends and

the worksheet.

Capital Gain Tax Worksheet in the Form 1040 (or Form

8. Multiply line 8 of the worksheet by 0.8214 (instead of

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

0.8571). Enter the result on line 9 of the worksheet.

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

9. Complete lines 10 and 11 of the worksheet as instructed

line 4g of Form 4952 is zero or less.

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on the worksheet.

Line 15 or 16 of your 2007 Schedule D (Form 1040) (line 14a

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

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

You figured your 2007 tax using Schedule D (Form 1041)

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

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

the MTFTCE Form 1116.

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

or less.

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

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You figured your 2007 tax using the Schedule D Tax

Enter the amount from that MTFTCE Form 1116, line 29, on

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

Form 8801, line 12.

Form 1041 instructions and line 9 of that worksheet is zero or a

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

loss.

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but do not attach them to your tax return.

You were not required to make adjustments to your foreign

source qualified dividends under the rules described earlier (or

If line 13 of the MTFTCE Form 1116 is greater than line 20

you would not have been required to make those adjustments if

of the MTFTCE Form 1116, keep a record of the difference.

you had foreign source qualified dividends).

This amount is carried forward and used to figure your MTFTCE

Use Worksheet B if you:

next year.

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Cannot use Worksheet A,

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Had 2007 foreign source capital gains and losses in no more

Part II—Current Year Nonrefundable and

than two separate categories, and

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Refundable Credits and Carryforward to

Did not have any item of unrecaptured section 1250 gain or

28% rate gain or loss.

2009

Instructions for Worksheets A and B. When you

complete Worksheet A or Worksheet B, do not use any foreign

Line 20

source capital gains you elected to include on line 4g of Form

Enter any qualified electric vehicle credit not allowed for 2007

4952. Use 0.5357 instead of 0.4286 to complete lines 11, 13,

solely because of the limitation under section 30(b)(3)(B).

and 15 of Worksheet B and to complete lines 8, 11, and 17 of

the Line 15 Worksheet for Worksheet B.

Line 21

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

If, as of October 3, 2008, you had any unpaid AMT from 2007

use the instructions for Capital Gains and Losses in Pub. 514 to

or any prior year attributable to the exercise of incentive stock

determine the adjustments you make.

options, that tax is abated. You should receive a Letter 2719C

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

from the IRS detailing the amount of tax, interest, and penalties

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

abated. Enter, as a negative amount on line 21, only the

for 2007 for the regular tax. Use your MTFTCE carryover, if

amount of any tax that was abated; do not enter the amount of

any, on line 10.

any interest or penalties abated.

Step 5. If you did not figure your 2007 AMTFTC using the

If you qualified for an abatement of unpaid AMT in more than

simplified limitation election, complete lines 14 through 16 of the

one year, you should receive a separate Letter 2719C for each

MTFTCE Form 1116.

year. Add the amounts of tax abated on all Letters 2719C that

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

you receive, and enter the total on line 21 as a negative

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

amount.

1116 and go to Step 7. If you completed Part III of Form 8801,

you must complete, for the MTFTCE, the Worksheet for Line 17

If you have any questions, call the IRS at the number and

in the Form 1116 instructions to determine the amount to enter

during the hours shown in the Letter 2719C. If you believe you

on line 17 of the MTFTCE Form 1116 if:

qualify for the abatement of unpaid AMT but did not receive a

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

Letter 2719C, call the phone number shown on page 86 of the

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Line 37 of Form 8801 is greater than zero.

2008 Form 1040 instructions or page 31 of the 2008 Form

But you do not need to complete the Worksheet for Line 17

1040NR instructions, whichever applies, for assistance.

if:

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Instructions For Form 8801 - Credit For Prior Year Minimum Tax - Individuals, Estates, And Trusts - 2008 Page 3

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