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risk. Also, refigure the basis limitations that apply to

Insolvency. If, at the end of the taxable year, the liabilities

partnerships and S corporations. Refer to IRC

of the estate or trust exceed the fair market value of its

Sections 59(h), 465, 704(d), and 1366(d).

assets, increase the passive activity loss allowed by the

excess (but not more than the total loss). See IRC

Enter on this line the difference between AMT limited

Section 58(c)(1).

losses (from activities reported on federal Schedules C,

C-EZ, E, F, or federal Form 4835) and the regular tax limited

Line 4o – Beneficiaries of other trusts or decedent’s

losses from these activities. If the AMT limited loss is less

estates

than the regular tax limited loss, enter the difference as a

If the estate or trust is a beneficiary of another estate or

negative amount.

trust, enter on this line the amount from Schedule K-1

(541), line 8. This is the estate’s or trust’s share of the

Line 4m – Tax shelter farm activities

distributable AMTI from the other estate or trust.

Important: If you include AMT adjustments or tax prefer-

ences on this line, do not include them on any other line of

Line 4p – Appreciated property charitable deduction

this schedule.

California did not conform to the federal repeal of the tax

Complete this line only if the estate or trust has a gain or

preference for charitable contributions of appreciated

loss from a tax shelter farm activity (as defined in IRC

tangible personal property.

Section 58(a)(2)) that is not a passive activity. If the tax

For AMT, refigure the contribution deduction, including

shelter farm activity is a passive activity, you must include

capital gain and IRC Section 1231 property, using the cost

it with other passive activities on line 4n.

or other basis rather than the fair market value (FMV).

Refigure all gains and losses reported for regular tax from

Do not include property for which you elected under IRC

tax shelter farm activities using the AMT adjustments and

Section 170(b)(1)(C)(iii) to figure the contribution

preferences.

deduction using the property’s adjusted basis rather than

Figure the tax shelter farm activity gain or loss for AMT

the FMV.

using the same rules used for regular tax except:

Enter on this line the difference between the AMT charitable

• Do not take any recomputed loss unless the estate or

contribution and the regular tax charitable contribution.

trust is insolvent (see IRC Section 58(c)(1)); and

Line 4q – Depletion

• Do not offset gains from other tax shelter farm activities

For AMT, if the depletion deduction for mines, wells, and

with the recomputed loss.

other natural deposits determined under IRC Section 611

Suspend and carry over the loss to future taxable years

exceeds the adjusted basis of the property at the end of the

until:

taxable year, the estate or trust will have a depletion

• There is a gain in a future taxable year from that same

adjustment. To figure the adjusted basis, use the rules in

activity; or

IRC Section 1016 but do not reduce the adjusted basis by

• The activity is disposed of.

current-year depletion. Figure the excess amount separately

for each property. Enter on this line only the depletion

Enter on this line the difference between the tax shelter

amount that exceeds the adjusted basis. Get the instruc-

farm loss for AMT and regular tax.

tions to federal Form 1041, Schedule I, line 4q for more

Line 4n – Passive activities

information.

Important: If you include AMT adjustments or preferences

In 1993, California conformed to the federal repeal of the

on this line, do not include them on any other line of this

AMT depletion adjustment for independent oil and gas

schedule.

producers and royalty owners. See federal Form 6251,

The estate or trust may want to complete a second form

Alternative Minimum Tax — Individuals, and instructions.

FTB 3801, Passive Activity Loss Limitations, and the other

However, your California depletion costs may continue to

forms or schedules on which passive activities are reported

be different from the federal amounts because of prior

to figure this adjustment.

differences in law and different bases.

Several types of adjustments may be entered on this line.

Line 4r – Accelerated depreciation of real property

Regular passive activities. Refigure the passive activity

placed in service before 1987

gains and losses for AMT by taking into account all AMT

For AMT, use the straight-line method to figure deprecia-

adjustments, preferences and AMT prior-year unallowed

tion on this property. Figure the depreciation separately for

losses that apply to the passive activity. The adjustment is

each property.

the difference between the AMT passive activity income or

15- or 18-year real property. Use the straight-line method

loss (from activities reported on federal Schedules C, C-EZ,

over the same number of years using the half-year

E, F, or federal Form 4835) and the regular tax passive

convention and no salvage value.

activity income or loss from these activities.

Low-income housing property. Use the straight-line

Publicly traded partnership (PTP). If the estate or trust

method over 15 years.

had a loss from a PTP, it will have to refigure the loss using

Enter on this line the excess of the regular tax depreciation

any AMT adjustments, tax preferences, and any AMT prior-

over the AMT depreciation. Do not enter a negative amount

year unallowed loss.

on this line.

Tax shelter passive farm activities. Refigure any gain or

loss from a tax shelter passive farm activity. Take into

Line 4s – Accelerated depreciation of leased personal

account all AMT adjustments, tax preferences, and AMT

property placed in service before 1987

prior-year unallowed losses. If the amount is a gain, it can

For AMT purposes, use the straight-line method to figure

be included on the AMT form FTB 3801; but, if it is a loss,

depreciation on leased personal property. Figure the

the adjustment for tax shelter passive farm activity is the

depreciation separately for each property.

loss reported for regular tax. The AMT loss to carry over is

For leased recovery property, other than 15- or 18-year real

the refigured AMT loss.

property or low-income housing, figure the depreciation

Schedule P (541) Instructions 1999 Page 5

Instructions For Schedule P (541) - Alternative Minimum Tax And Credit Limitations - Fiduciaries - 1999 Page 5

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