Instructions For Schedule P (Form 540nr) - Alternative Minimum Tax And Credit Limitations - Nonresidents Or Part-Year Residents - 2013 Page 2
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8A Purpose
AMT carryovers. You are a qualified taxpayer if you meet both of the
following:
California tax law gives special treatment to some items of income
• Own or have an ownership interest in a trade or business.
and allows deductions and credits for some items of expense. Many
• Have aggregate gross receipts (less returns and allowances),
individuals who benefit from these provisions must pay at least a
during the taxable year of less than $1,000,000 from all trades or
minimum amount of tax and/or limit the amount of their credits.
businesses for which you are the owner or have an ownership interest.
Use Schedule P (540NR), Alternative Minimum Tax and Credit
Gross receipts may include, but are not limited to, items reported on
Limitations — Nonresidents or Part-Year Residents, to determine if:
federal Schedules C, Profit or Loss from Business, D, Capital Gains
• You owe AMT.
and Losses, E, Supplemental Income and Loss (other than income
• Your credits must be reduced or eliminated entirely. Your credits
from a trust), or F, Profit or Loss from Farming, and from federal
may be limited even if you do not owe AMT, so be sure to complete
Form 4797, Sales of Business Property, (figured in accordance with
Side 1, Side 2, and Side 3 of Schedule P (540NR).
California law), or California Schedule D-1, Sales of Business Property
(if required to complete it) that are associated with a trade or business.
B Who Must File
In the case of an ownership interest, you include only the proportional
share of gross receipts of any trade or business from a partnership,
Complete Schedule P (540NR) to see if AMT applies to you. Attach it to
S corporation, regulated investment company (RIC), real estate
your Long Form 540NR only if any of the following apply:
investment trust (REIT), or real estate mortgage investment conduit
• You have AMT.
(REMIC) in accordance with your ownership interest in the enterprise.
• You have certain credits that are limited by Tentative Minimum Tax
Apply the $1,000,000 test to the tax return regardless of filing status.
(TMT), Part II, line 43 (or in some cases, AMT, Part II, line 45).
The threshold does not become $2,000,000 for married/RDP taxpayers
• The total of Part I, line 7 through line 13 is negative and you would
filing jointly.
be liable for AMT without taking those lines into account.
Aggregate gross receipts (less returns and allowances) means the
• Schedule P (540NR), Part I, line 21 is more than Part II, line 22,
sum of the gross receipts of the trades or businesses which you own
and you have one or more adjustments on line 4 or line 7 through
and the proportionate interest of the gross receipts of the trades or
line 13l.
businesses which you own and of pass-through entities in which you
hold an interest.
C Record Keeping
Gross receipts (less returns and allowances) means the sum of the
For AMT, certain items of income, deductions, etc., receive different tax
gross receipts from the production of business income, as defined in
treatment than regular tax. Therefore, you need to refigure items for AMT
R&TC Section 25120(a), and the gross receipts from the production of
that you figured for regular tax. In some cases, you may wish to do this
nonbusiness income, as defined in R&TC Section 25120(d).
by completing the applicable tax form a second time. If you do complete
Proportionate interest means:
another form, do not attach it to your tax return, but keep it for your tax
records.
1. In the case of a pass-through entity which reports a profit for the
taxable year, your profit interest in the entity at the end of your
For regular tax, some deductions may result in carryovers to future
taxable year.
taxable years. Examples are investment interest expense, net operating
2. In the case of a pass-through entity which reports a loss for the
loss, and capital loss. Because you may have to refigure these items for
taxable year, your loss interest in the entity at the end of your taxable
AMT, the carryover amount may be different for AMT than for regular
year.
tax. Although the carryovers that you figure for AMT do not affect the
3. In the case of a pass-through entity which is sold or liquidates during
carryovers for regular tax, you must keep track of your AMT carryovers
the taxable year, your capital account interest in the entity at the time
in order to complete your Schedule P (540NR) in future years.
of the sale or liquidation.
D Partnerships, S Corporations, Limited
Proportionate interest includes an interest in a pass-through entity
Liability Companies (LLCs), Estates, or Trusts
including a partnership, S corporation, RIC, REIT, or REMIC.
If you are a qualified taxpayer both of the following applies:
If you are a partner in a partnership, a shareholder of an S corporation,
• In Part I, do not include any positive or negative adjustments or
a member of an LLC, or a beneficiary of an estate or trust, you must
preference items attributable to any trade or business.
include your distributive share of adjustments and tax preference items
• In Part I, line 17, enter all taxable income attributable to any trade or
shown on your Schedule K-1 (565), for partners; Schedule K-1 (100S),
business.
for shareholders; Schedule K-1 (568), for members of an LLC; or
Schedule K-1 (541) for beneficiaries.
Specific Line Instructions
E Credit for Prior Year Alternative Minimum Tax
Registered Domestic Partners (RDP)
RDPs compute their AMT using the same rules applicable to a married
If you paid AMT in a prior year, you may be able to claim the credit for
person. RDPs will base their California AMT on the pro forma federal
prior year AMT. Get form FTB 3510, Credit for Prior Year Alternative
return. For more information on RDPs, get FTB Pub. 737.
Minimum Tax — Individuals or Fiduciaries, to see if you qualify.
The prior year alternative minimum tax (AMT) credit must be applied
Part I Alternative Minimum Taxable Income
before any credits that can reduce regular tax below the tentative
If you are a military servicemember domiciled outside of California,
minimum tax (TMT).
subtract your military pay from your federal adjusted gross income.
F Additional Information
In Part I, determine your adjustments and preferences that apply to your
total taxable income for the year as if you were a resident in the current
For more information, get federal Form 6251, Alternative Minimum
taxable year and all prior taxable years.
Tax – Individuals.
If you itemized your deductions for California regular tax only and not
G Alternative Minimum Taxable Income (AMTI)
for federal tax, use the amounts from the federal Schedule A, Itemized
Deductions, (1040 or 1040NR) that you completed using California
Exclusion
figures when these instructions refer to Schedule A.
A qualified taxpayer must exclude income, positive and negative
Line 2 – Medical and dental expenses
adjustments, and preference items attributable to any trade or business
Do not include any adjustment for differences between federal and
when figuring AMTI. These adjustments and preference items must
California laws.
also be excluded when calculating any deductions that may result in
Page 2 Schedule P (540NR) Instructions 2013
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