6251 Alternative Minimum Tax Computation ia
Form
Department of the Treasury DP Attach to Forms 1040, 1040NR, 1041 or 990-T (Trust). 1 985
Internal Revenue Service 32
Name(s) as shown on tax return Identifying number
1 Adjusted gross income from Form 1040, line 33 or Form 1040NR, line 32 (see instructions) 1
2 Deductions (see instructions):
a (1)Medical and dental expense from Schedule A, line 5 . 2a(1)
(2) Muttiply Form 1040, line 33 by 5% (.05) 2a(2) |
(3) Subtract line 2a(2) from line 2a(1). (If zero or less, enter zero) . \2a(3)
b Contributions from Schedule A, line 18 . 2b
c Casualty and theft losses from Schedule A, line 19 . Soe . 2c
d Qualified interest on property used as a residence from Schedule A, line 11 . 2d
e (1) Interest, other than line 2d above, from Schedule A, line 14. |2e(1)
(2)Net investment income (If zero or less, enter zero) . 2e(2)
(3) Enter the smaller of line 2e(1) or line 2e(2) : . 2e(3)
f Gambling losses to the extent of gambling winnings from Schedule A, line 22 . 2f
g Estate tax allowable under section 691(c) from Schedule A 2g
h Estates and trusts only: Charitable deduction and income distribution deduction . 2h - Mh
i Add lines 2a(3), b, ¢, d, e(3), fg, and h 2i
3 Subtract line 2i from line 1 3
4 Tax preference items:
a Dividend exclusion . 4a
b 60% capital gain deduction . . [4b
c Accelerateddepreciationon nonrecoveryreal propertyor 15 (or 18). yearreal property . 4c
d Accelerated depreciation on leased personal property or leased recovery property
other than 15 (or 18)-year real property . 4d
e Amortization of certified pollution control facilities . 4e
f Mining exploration and development costs : af
g Circulation and research and experimental expenditures 4g
h Reserves for losses on bad debts of financial institutions 4h
i Depletion 4l
j Incentive stock options . 4j /]
k Intangible drilling costs 4k 7]
| Add lines 4a through 4k Al
5 Alternative minimum taxable income (add lines 3 and A(I)) (chort period returns, see e instructions) 5
6 Enter: $40,000, if married filing joint return or Qualifying widow(er) . .
$30,000, if single or head of household . . \ 6
$20,000, if married filing separate return or estate or trust . .
7 Subtract line 6 from line 5. If zero or less, do not complete the rest of this form 7
8 Enter 20% of line 7 . 8
9 Amount from Form 1040, line 50, or + Form 1040NR, line 51. (Do not include Form 1040, line 39, or ‘Form
1040NR, line 41.) (estates and trusts, see instructions) 9
10 Subtract line 9 from line 8. If zero or less, enter zero . 10
11 Foreign tax credit : 11
12 Alternative minimum tax (subtract line a from line 10). Enter o on Form 1040, line 52, Form ‘LO40NR, line
52, Form 1041, line 31, or Form 990-T, page 1, line 14. 2... | 12
Instructions For more information, see Publication 909, enter info the computation of tax preference

(Section References are to the Internal Revenue
Code)
Paperwork Reduction Act Notice.— We ask for
this information to carry out the Internal Revenue
laws of the United States. We need it to ensure
that taxpayers are complying with these laws and
to allow us to figure and collect the right amount
of tax. You are required to give us this information.
Who Must File.—File this form if : (a) You are
liable for the alternative minimum tax; or (b )
you have one or more tax preference items on
lines 4c through 4k; or (c) you have an amount
on line 2e(3), and line 2e(2) includes income
other than interest and dividend income.
Individuals, estates or trusts may be liable if
their adjusted gross income plus tax preference
items listed on line 4 total more than line 6.

Alternative Minimum Tax.

Minimum Tax Deferred From Earlier
Year(s).—If a net operating loss carryover from
an earlier year(s) reduces taxable income for
1985, and the net operating loss giving rise to.
the carryover resulted in the deferral of
minimum tax in that earlier year(s), all or part of
the deferred minimum tax may be includible as
tax liability for 1985. Figure the deferred
minimum tax in the worksheet in Publication
909 and enter it on Form 1040, line 52, or Form
1041, line 31. Write “Deferred Minimum Tax.”

Partners, Beneficiaries, etc.—If you are a:
(1) Partner or shareholder of an S corporation,

take into account separately your distributive
share of items of income and deductions that

items.

(2) Beneficiary of an estate or trust, see
section 58(c).

(3) Participant in a common trust fund,
see section 58(e).

(4) Shareholder or holder of beneficial interest
ina regulated investment company or a real
estate investment trust, see section 58(F).
Carryback and Carryover of Unused
Credits.—It may be necessary to figure the
carryback or carryover of certain unused credits.
See section 55(c)(3).

Note: If you have an earned income credit, you
must reduce that credit by any alternative
minimum tax.

(Continued on back)

Form 6251 1985)


Form 6251 (1985)

Page 2

Line by Line Instructions

Line 1, Estates and Trusts.—Adjusted gross
income is figured in the same way as for an
individual except that the costs of the
administration of the estate or trust are allowed
in figuring adjusted gross income.

All taxpayers. —Do not include in adjusted

gross income, interest expense incurred to
purchase or carry a limited business interest ina
partnership or S corporation. Instead, include in
line 2(e)(1).

Do not include in line 1 any alcohol fuel credit
included in income.

Anet operating loss deduction taken in figuring
adjusted gross income may have to be changed in
figuring the alternative minimum tax. See
Publication 909, Alternative Minimum Tax, for
details and attach a computation.

Lines 2(a) through 2(h).—Do not include on
these lines any deduction that can be carried
back or forward as a net operating loss or forward
as a charitable contribution.

Individuals. —Complete and attach Schedule
‘A (Form 1040) for any deduction listed on these
lines, whether or not you completed it in figuring
Form 1040, line 34. If you did not use Schedule A
to figure Form 1040, line 34, write “Alt Min Tax”
in the top margin of Schedule A.

Estates and Trusts. —Enter on the applicable
line any deduction listed on these lines allowable
to the estate or trust.

Line 2(d).—Enter the part of the interest that is
from debts you incurred in acquiring,
constructing, or substantially rehabilitating
property, other than a houseboat, which you, or
certain family members listed in section
267(c)(4), use as a residence.

If the interest expense is on debts incurred
before July 1, 1982 the following applies. At the
time you incurred the debt, it must have been
secured by property which you, or certain family
members listed in section 267(c)(4), used as a
residence.

Line 2(e)(2).—Enter your investment income
minus investment expenses.

Investment income is your gross income from
interest, dividends, rents, and royalties, and any
amount treated as ordinary income under
sections 1245, 1250, and 1254. Do not include
income from a trade or business. Include as
investment income, your capital gain net income
from the sale or exchange of property held for
investment, and the amount to be entered on line
4(@). Add or subtract from investment income,
any income or loss from a limited business
interest.

Investment expenses are those expenses
allowable against the production of investment
income provided they are allowed in figuring
adjusted gross income and not includible in line 4.
Line 4(b), 60% Capital gain deduction. —
Individuals.—Enter your 60% capital gain
deduction from your Schedule D (Form 1040),
line 22, or Form 4798, line 9. If you had an entry
on Form 1040, line 14, enter 60% of your capital
gain distributions. Do not include the capital gain
deduction attributable to a sale or exchange of a
principal residence.

Estates and Trusts. —Enter the capital gain
deduction taken into account on Forms 1041 or
990-T. However, an amount paid or permanently
set aside for a charitable purpose is not a tax
preference item.

Lines 4(c) and 4(d), Accelerated depreciation
on real property; Accelerated depreciation on
leased personal property or leased recovery
property other than 15-year (or 18-year) real
property. —If you use the Class Life Asset
Depreciation Range (CLADR) System, use the
asset guideline period as the straight-line useful
life to figure lines 4(c) and (d).

For (c) but not (d), use any variance in useful
life under section 167(m)(1) as the straight-line
useful life.

Line 4(c).—For property other than recovery
property, enter the amount you get (never less
than zero) by subtracting the depreciation that
would have been allowable for the year if you had
used the straight-line method, from the
depreciation or amortization actually allowable.
Figure this amount separately for each property.
For 15-year (or 18-year) real property, or low
income housing, enter the amount by which the
deduction allowed under section 168(a) (or
section 167 for section 167(k) property) is more
than the deduction which would have been
allowable had the property been depreciated
using a 15-year (or 18-year) period and the
straight-line method without salvage value.

Line 4(d).—For leased property other than
recovery property, enter the amount you get
(never less than zero) by subtracting the
depreciation that would have been allowable for
the year if you had used the straight-line method,
from the depreciation or amortization actually
allowable. Figure this amount separately for each
Property.

For leased recovery property other than 15-
year (or 18-year) real property, or low income
housing, enter the amount by which your
deduction under section 168(a) is more than the
deduction allowable using the straight-line
method with a half-year convention, no salvage
value, andthe following recovery period

3 year property. 5 years
5 year property... -. 8 years
10 year property... 15 years
15 year public utility property........22 years

Note: /f the recovery period actually used is
Jonger than the recovery period in 4(c) or 4(d),
do not complete lines 4(c) or 4(d).

Line 4(e), Amortization of certified pollution
contro! facilities. —Enter the amount by which
the amortization allowable under section 169 is
more than the depreciation deduction otherwise
allowable.

Line 4(f), Mining exploration and development
costs.—For each mine or other natural deposit
(other than an oil or gas well), enter the amount
by which the deductions allowable under section
616(a) or 617 are more than the amount that
would have been allowable if you had amortized
the expenses over a 10-year period.

Line 4(g), Circulation and research and
experimental expenditures.—Enter the amount
by which the deductions allowable for circulation
and research and experimental expenditures
under sections 173 or 174(a) are more than the
amount that would have been allowable if you
had amortized the circulation expenses over a 3-
year period and the research and experimental
expenditures over a 10-year period.

Line 4(h), Reserves for losses on bad debts of
financial institutions. —Enter your share of the
excess of the addition to the reserve for bad debts
over the reasonable addition to the reserve for
bad debts that would have been allowable if you
had maintained the bad debt reserve for all tax
years based on actual experience.

Line 4(i), Depletion.—in the case of mines,
wells, and other natural deposits, enter the
amount by which the deduction for depletion
under section 611 (including percentage
depletion for geothermal deposits), is more than
the adjusted basis of such property at the end of
the tax year. Figure the adjusted basis without
regard to the depletion deduction and figure the
excess separately for each property.

Line 4(), Incentive stock options.—If you
received stock by the exercise of an incentive
stock option, enter the amount by which the fair
market value of the shares at the time of exercise
was more than the option price. See sections
57(a)(10) and 422A.

Line 4(k), Intangible drilling costs.— Intangible
drilling costs are a tax preference item to the
extent that the excess intangible drilling costs are
more than your net income from oil, gas, and
geothermal properties.

Figure excess intangible drilling costs as
follows: From the allowable intangible drilling and
development costs (except for costs in drilling a
nonproductive well), subtract the amount that
would have been allowable if you had capitalized
these costs and either amortized them over the
120 months that started when production began,
or treated them according to any election you
made under section 57(d)(2).

Your net income from oil, gas, and geothermal
properties is your gross income from them, minus
the deductions allocable to them, except for
excess intangible drilling costs and nonproductive
well costs.

Figure the line 4(k) amount separately for oil
and gas properties which are not geothermal
deposits and for all properties which are
geothermal deposits.

Lines 5 and 8.—If this is a short period return,
use the formula in section 443(d)(1) to
determine the amount to enter on these lines.

Nonresident Alien Individuals.—If you
disposed of U.S. real property interests at a gain,
see Form 1040NR instructions for a special rule
in figuring line 8.

Line 9, Estates and trusts.—Enter the amount
from Form 1041, line 29. Do not include any tax
from Forms 4970, 4972 or 5544.

Line 11, Foreign Tax Credit.—if line 10 is more
than zero, and you incurred foreign taxes and
elect to take them as a credit, enter on line 11
the foreign tax credit allowed against the
alternative minimum tax. Figure this credit as
follows:

(1) Use and attach a separate Form 1116 for
each type of income specified at the top of Form

(2) Print across the top of each Form 1116
used: "ALT MIN TAX.”

(3) Part I—Fill in a new Part | using that
portion of your income, deductions and tax
preference items from Form 6251, attributable
to sources outside the U.S.

(4) Part Ill. —Complete only the following
ines:

(a) Insert on line 5 the result of the
following:

() the amount from Part Ill, line 5 of
the Form 1116 used to figure the
credit allowed against your regular
tax, minus

Gii) the amount from Part Ill, line 15 of
that Form 1116, plus

(iii) the smaller of (A) the amount from
Part ill, ine 15 of that Form 1116,
or (B) Form 6251, line 10 (or if
more than one Form 1116 is being
used, an allocable portion of Form
6251, line 10).

(b) Complete lines 6 through 8, using
the result of step 3 for line 6.

(c) Line 11.—Enter Form 6251, line 5.
(d) Complete line 12 as indicated in Part Ill.
(e) Line 13.—Enter Form 6251, line 8.

(f) Complete lines 14 and 15 as indicated
in Part il.

(5) Part 1V.—Enter on line 11, Form 6251,
the amount from line 7, Part IV of this Form 1116
(but not more than the amount on Form 6251,
line 10).