Instructions For Schedule I (Form 1041) - 2016 (Page 5 of 9) in pdf

Line 19—Mining Costs

deduction is the smaller of (a) the loss

producers (that is, not integrated oil

allowable for the costs had they

companies as defined in section 291(b)

Don’t make this adjustment for

remained capitalized or (b) the

(4)). However, this benefit may be

costs for which you elected the

remaining costs to be amortized for the

limited. First, figure the IDC preference

optional 10-year write-off period

AMT.

as if this exception didn't apply. For

CAUTION

under section 59(e) for regular tax

purposes of this exception, complete

Line 21—Income From Certain

purposes.

and combine lines 1 through 23,

Installment Sales Before

including the IDC preference. If the

Expenditures for the development or

January 1, 1987

amount of the IDC preference exceeds

exploration of a mine or certain other

40% of the total of lines 1 through 23,

The installment method doesn't apply

mineral deposits (other than an oil, gas,

enter the excess on line 22 (the benefit

for AMT purposes to any nondealer

or geothermal well) deducted under

of this exception is limited). Otherwise,

disposition of property that occurred

sections 616(a) and 617(a) for regular

don’t enter an amount on line 22 (the

after August 16, 1986, but before the

tax purposes must be amortized for

estate's or trust's benefit from this

first day of your tax year that began in

AMT purposes over 10 years beginning

exception isn't limited).

1987, if an installment obligation to

with the year the expenditures were

which the proportionate disallowance

paid or incurred.

Line 23—Other Adjustments

rule applied arose from the disposition.

Enter on line 23 the total of any other

Enter the difference between the

Enter on line 21 the amount of

adjustments that apply including the

amount allowed for AMT purposes and

installment sale income that was

following.

the amount allowed for regular tax

reported for regular tax purposes.

Depreciation figured using

purposes. If the amount allowed for

Line 22—Intangible Drilling

pre1987 rules. For AMT purposes,

AMT purposes exceeds the amount

use the straight line method to figure

Costs Preference (IDCs)

deducted for regular tax purposes, enter

depreciation on real property. Use a

the difference as a negative amount.

Don’t make this adjustment for

recovery period of 19 years for 19-year

If the estate or trust had a loss on

costs for which you elected the

real property and 15 years for

property for which mining expenditures

optional 60-month write-off

low-income housing. Enter the excess

CAUTION

haven't been fully amortized for the

under section 59(e) for regular tax

of depreciation claimed for regular tax

AMT, the AMT deduction is the smaller

purposes.

purposes over depreciation refigured

of (a) the amount of the loss allowable

using the straight line method. Figure

IDCs from oil, gas, and geothermal

for the expenditures had they remained

this amount separately for each property

wells are a preference to the extent that

capitalized or (b) the remaining

and include on line 23 only positive

the excess IDCs exceed 65% of the net

expenditures to be amortized for the

amounts.

income from the wells. Figure the

AMT.

For leased personal property other

preference for all oil and gas properties

Line 20—Research and

than recovery property, enter the

separately from the preference for all

amount by which the regular tax

Experimental Costs

geothermal properties.

depreciation using the pre-1987 rules

Don’t make this adjustment for

Figure excess IDCs as follows:

exceeds the depreciation allowable

costs paid or incurred in

using the straight line method. For

1. Determine the amount of the

connection with an activity in

leased 10-year recovery property and

estate's or trust's IDCs allowed for the

CAUTION

which the estate or trust materially

leased 15-year public utility property,

regular tax under section 263(c), but

participated under the passive activity

enter the amount by which the

don’t include any section 263(c)

rules or for costs for which you elected

depreciation deduction determined for

deduction for nonproductive wells, then

the optional 10-year write-off for

regular tax purposes is more than the

2. Subtract the amount that would

research and experimental

deduction allowable using the straight

have been allowed had you amortized

expenditures under section 59(e) for

line method with a half-year convention,

these IDCs over a 120-month period

regular tax purposes.

no salvage value, and a recovery period

starting with the month the well was

of 15 years (22 years for 15-year public

Research and experimental

placed in production.

utility property). Figure this amount

expenditures deducted under section

separately for each property and include

Cost depletion can be

174(a) for regular tax purposes

on line 23 only positive amounts.

substituted for the amount

generally must be amortized for AMT

Patron's adjustment. Distributions

allowed using amortization over

purposes over 10 years beginning with

CAUTION

the estate or trust received from a

120 months.

the year the expenditures were paid or

cooperative may be includible in

incurred.

Net income. Determine net income by

income. Unless the distributions are

reducing the gross income that the

nontaxable, include on line 23 the total

Enter the difference between the

estate or trust received or accrued

AMT patronage dividend adjustment

amount allowed for AMT purposes and

during the tax year from all oil, gas, and

reported to the estate or trust from the

the amount allowed for regular tax

geothermal wells by the deductions

cooperative.

purposes. If the amount for AMT

allocable to those wells (reduced by the

Amortization of pollution control

purposes exceeds the amount allowed

excess IDCs). When refiguring net

facilities. The amortization deduction

for regular tax purposes, enter the

income, use only income and

under section 169 must be refigured for

difference as a negative amount.

deductions allowed for the AMT.

the AMT. For facilities placed in service

If the estate or trust had a loss on

after 1986 and before 1999, figure the

Exception. The preference for IDCs

property for which research and

amortization deduction for the AMT

from oil and gas wells doesn't apply to

experimental costs haven't been fully

using the ADS described in section

taxpayers who are independent

amortized for the AMT, the AMT

2016 Instructions for Schedule I (Form 1041)

Instructions For Schedule I (Form 1041) - 2016 Page 5

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