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Property depreciated under the

Refigure your allowable losses for AMT

How is the line 14 adjustment fig-

unit-of-production method or any other

purposes from activities for which you

ured? Subtract the AMT deduction for

method not expressed in a term of

aren't at risk and basis limitations

depreciation from the regular tax

years.

applicable to interests in partnerships

deduction and enter the result. If the

Qualified Indian reservation property.

and stock in S corporations by taking

AMT deduction is more than the regular

A natural gas gathering line placed in

into account your AMT adjustments and

tax deduction, enter the difference as a

service after April 11, 2005.

tax preference items. See sections

negative amount.

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

How is depreciation refigured for the

In addition to the AMT adjustment to

AMT? See methods below.

your deduction for depreciation, you

Enter the difference between the loss

must also adjust the amount of

reported for regular tax purposes and

Property placed in service before

depreciation that was capitalized, if any,

the AMT loss. If the AMT loss is more

1999. Refigure depreciation for the

to account for the difference between

than the loss reported for regular tax

AMT using ADS with the same

the rules for the regular tax and the

purposes, enter the adjustment as a

convention used for the regular tax. See

AMT. Include on this line the current

negative amount.

the table below for the method and

year adjustment to taxable income, if

Line 17—Circulation Costs

recovery period to use.

any, resulting from the difference.

Don’t make this adjustment for

Line 15—Passive Activities

Property Placed in Service Before 1999

expenditures for which you

IF the property is...

THEN use the...

Don’t enter again elsewhere on

elected the optional 3-year

CAUTION

this schedule any AMT

write-off period for regular tax purposes.

Section 1250 property. Straight line method

adjustment or tax preference

over 40 years.

CAUTION

Circulation expenditures deducted

item included on this line.

Tangible property

Straight line method

under section 173(a) for regular tax

(other than section

over the property's

For AMT purposes, the rules described

purposes must be amortized for AMT

1250 property)

AMT class life.

in section 469 apply, except that in

purposes over 3 years beginning with

depreciated using

applying the limitations, minimum tax

the year the expenditures were paid or

straight line for the

rules apply.

incurred.

regular tax.

Enter the difference between the

Any other tangible

150% declining

Refigure passive activity gains and

property.

balance method,

regular tax and AMT deduction. If the

losses on an AMT basis. Refigure a

switching to straight

AMT deduction is greater, enter the

passive activity gain or loss by taking

line the first tax year it

difference as a negative amount.

into account all AMT adjustments or tax

gives a larger

preference items that pertain to that

deduction, over the

If the estate or trust had a loss on

activity.

property's AMT class

property for which circulation

life.

expenditures haven't been fully

You may complete a second Form

amortized for the AMT, the AMT

8582, Passive Activity Loss Limitations,

deduction is the smaller of (a) the

to determine the passive activity losses

amount of the loss allowable for the

allowed for AMT purposes, but don't

Property placed in service after

expenditures had they remained

send this AMT Form 8582 to the IRS.

1998. Use the same convention and

capitalized or (b) the remaining

recovery period used for the regular tax.

expenditures to be amortized for the

Enter the difference between the loss

For property other than section 1250

AMT.

reported for regular tax purposes and

property, use the 150% declining

the AMT loss, if any.

Line 18—Long-Term Contracts

balance method, switching to straight

line the first tax year it gives a larger

The amount of any passive

For AMT purposes, the percentage of

deduction. For section 1250 property,

completion method of accounting

activity loss that isn't deductible

TIP

use the straight line method.

described in section 460(b) generally

(and is therefore carried

must be used. However, this rule

forward) for AMT purposes is likely to

How is the AMT class life deter-

doesn't apply to any home construction

differ from the amount (if any) that is

mined? The class life used for the AMT

contract (as defined in section 460(e)

carried forward for regular tax purposes.

isn't necessarily the same as the

(6)).

Therefore, it is essential that you retain

recovery period used for the regular tax.

adequate records for both AMT and

The class lives for the AMT are listed in

Note. Contracts described in section

regular tax purposes.

Rev. Proc. 87-56, 1987-2 C.B. 674, and

460(e)(1)(B) are subject to the simplified

in Pub. 946, How To Depreciate

method of cost allocation of section

Publicly traded partnerships (PTPs).

Property. Use 12 years for any tangible

460(b)(4).

If the estate or trust had a loss from a

personal property not assigned a class

PTP, refigure the loss using any AMT

Enter the difference between the

life.

adjustments, tax preference items, and

AMT and regular tax income. If the AMT

See Pub. 946 for optional tables

any AMT prior year unallowed loss.

income is smaller, enter the difference

that can be used to figure AMT

TIP

Line 16—Loss Limitations

as a negative amount.

depreciation. Rev. Proc. 89-15,

1989-1 C.B. 816, has special rules for

If the loss is from a passive

short tax years and for property

activity, use line 15 instead. If

disposed of before the end of the

the loss is from a tax shelter

CAUTION

recovery period.

farm activity (that isn't passive), use

line 23.

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2017 Instructions for Schedule I (Form 1041)

Instructions For Schedule I (Form 1041) - Alternative Minimum Tax-Estates And Trusts - 2017 Page 4

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