Instructions For Schedule P (Form 541) - Alternative Minimum Tax And Credit Limitations - Fiduciaries - 2013 Page 5

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Publicly traded partnership (PTP). If the estate or trust had a loss from
Line 4r – California qualified stock options
a PTP, it will have to refigure the loss using any AMT adjustments, tax
Include the amount of compensation excluded from the employee’s
preferences, and any AMT prior year unallowed loss.
gross income for regular tax from the exercise of California qualified
stock options (CQSOs). This amount is the difference between the FMV
Tax shelter passive farm activities. Refigure any gain or loss from a tax
of the corporation’s stock on the date the option is exercised and the
shelter passive farm activity. Take into account all AMT adjustments, tax
amount the employee paid for the stock.
preferences, and AMT prior year unallowed losses. Do not include a tax
shelter passive farm activity loss on your AMT form FTB 3801. Instead,
Line 4s – Other adjustments
carry the loss forward to offset against future tax shelter passive farm
Include on this line:
activities.
• Patron’s adjustment. Distributions the estate or trust received from a
Insolvency. If, at the end of the taxable year, the liabilities of the estate
cooperative may be includible in income. Unless the distributions are
or trust exceed the FMV of its assets, increase the passive activity
nontaxable, include on line 4s the total AMT patronage dividend and
loss allowed by the excess (but not more than the total loss). See IRC
per-unit retain allocation adjustment reported to the estate or trust by
Section 58(c)(1).
the cooperative.
• Related adjustments. AMT adjustments and tax preferences may
Line 4o – Beneficiaries of other trusts or decedent’s estates
affect deductions that are based on an income limit other than AGI
If the estate or trust is a beneficiary of another estate or trust, enter
or modified AGI (e.g., farm conservation expenses). Refigure these
on this line the amount from Schedule K-1 (541), line 12a. This is the
deductions using the income limit as modified for AMT. Include the
estate’s or trust’s share of the distributable AMTI from the other estate
difference between the regular tax and AMT deduction on line 4r. If
or trust.
the AMT deduction is more than the regular tax deduction, include
Line 4p – Depletion
the difference as a negative amount.
For AMT, if the depletion deduction for mines, wells, and other natural
Do not make an adjustment on line 4s for an item you refigured on
deposits determined under IRC Section 611 exceeds the adjusted basis
another line of Schedule P (541).
of the property at the end of the taxable year, the estate or trust will have
a depletion adjustment. To figure the adjusted basis, use the rules in
Line 7a – Alternative minimum tax NOL deduction
IRC Section 1016 but do not reduce the adjusted basis by current-year
For loss years beginning after 1986, reduce any NOL by any
depletion. Figure the excess amount separately for each property. Enter
positive AMT adjustments in that year. Increase the NOL by negative
on this line only the depletion amount that exceeds the adjusted basis.
adjustments. Also, reduce the NOL by any tax preferences, but only to
Get the instructions to federal Schedule I (Form 1041), line 6 for more
the extent they increase the NOL figured for regular tax.
information.
Line 7b – AMTI Exclusion
California conforms to the federal repeal of the AMT depletion
Qualified taxpayers shall exclude income from any trade or business
adjustment for independent oil and gas producers and royalty owners.
when figuring AMTI. If you are a qualified taxpayer (refer to General
For more information, get federal Form 6251, Alternative Minimum
Information G, Alternative Minimum Taxable Income (AMTI) Exclusion),
Tax — Individuals, and instructions. However, your California depletion
enter your taxable trade or business income on line 7b. If zero or less,
costs may continue to be different from the federal amounts because of
enter -0-.
prior differences in law and different basis.
Part II – Income Distribution Deduction on an Alternative
Line 4q – Intangible drilling costs
Minimum (AMT) Tax Basis
If the estate or trust elected the optional 60-month write-off under IRC
Section 59(e) for all property in this category, skip this line.
Line 5 – Enter any capital gains that were paid or permanently set aside
for charitable purposes from the current year’s income included on
For AMT, intangible drilling costs (IDCs) from oil, gas, and geothermal
Form 541, Schedule A, line 1c.
wells are preferences if the excess IDCs exceed 65% of the net income
from the wells. Figure the preference for oil and gas properties separate
Line 6 and Line 7 – Capital gains and losses must take into account any
from geothermal properties. To figure excess IDCs:
basis adjustments from Part I, line 4k.
A. Figure the amount of the IDCs allowed for regular tax under IRC
Line 15 – Income distribution deduction on an alternative minimum
Section 263(c). Do not include any deduction for nonproductive
tax basis
wells. Refigure the IDCs allowed for AMT by amortizing them
Allocate the income distribution deduction computed on an AMT basis
over 120 months, starting with the month the well was placed in
among the beneficiaries in the same manner as income was allocated
production. Then subtract the AMT IDCs from the regular tax IDCs
for regular tax. Report each beneficiary’s share on the respective
to get the excess IDCs. The estate or trust may elect to use any other
Schedule K-1 (541), line 12a.
method that is allowed in determining cost depletion.
Part III – Tentative Minimum Tax (TMT) and Alternative
B. Figure net income by reducing the gross income, from all oil, gas,
Minimum Tax (AMT) Computation
and geothermal wells that was received or accrued during the taxable
year by any deductions allocable to these properties (reduced by the
Line 9 – Enter the total of the estate’s or trust’s regular tax from
excess IDCs). Use only income and deductions allowed for AMT.
Form 541, line 21a.
C. Multiply the net income by 65% (.65). Subtract the result from the
Part IV – Credits That Reduce Tax
excess IDCs figured in Step A. This is the excess IDCs. Enter the
Complete Part IV only if you have tax credits.
result on line 4q.
Use Part IV to determine the following:
Exception. The preference for IDCs from oil and gas wells does not
apply to taxpayers who are independent producers, i.e., not integrated
• Amount of credit that may be used to offset tax
oil companies as defined in IRC Section 291(b)(4). However, this benefit
• Tax that may be offset
may be limited. First, figure the IDC preference as if this exception did
• Amount of credit, if any, that may be carried over to future years
not apply. Then, for purposes of this exception, complete Schedule P
• Order in which to claim credits, if you have more than one credit to
(541) through line 6, including the IDC preference. If the amount of
claim
the IDC preference exceeds 40% of the amount figured for line 6, enter
Before you begin Part IV:
the excess on line 4q (the benefit of this exception is limited). If the
• Complete Form 541 through line 24.
amount of the IDC preference is equal to or less than 40% of the amount
• Figure the amount of your credits using the credit form or worksheet
figured for line 6, do not enter an amount on line 4q (the benefit of this
exception is not limited).
Schedule P (541) Instructions 2013 Page 5

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