OMB No. 1545-1073

Form 8801

Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 74 © Attach to your tax return.

Name(s) shown on return Identifying number

Net Minimum Tax on Exclusion Items

1 Combine lines 16 through 18 of your 1996 Form 6251. Estates and trusts, see instructions 1

2 Enter adjustments and preferences treated as exclusion items. See instructions 2

3 ( ) 3 Minimum tax credit net operating loss deduction. See instructions

Combine lines 1, 2, and 3. If zero or less, enter -0- here and on line 15 and go to Part II. If more

than $165,000 and you were married filing separately for 1996, see instructions

4

4

5

Enter $45,000 ($33,750 if single or head of household for 1996, $22,500 if married filing separately

for 1996). Estates and trusts, enter $22,500

5

6

Enter $150,000 ($112,500 if single or head of household for 1996, $75,000 if married filing

separately for 1996). Estates and trusts, enter $75,000

6

7 Subtract line 6 from line 4. If zero or less, enter -0- here and on line 8 and go to line 9 7

8 Multiply line 7 by 25% (.25) 8

9

9 Subtract line 8 from line 5. If zero or less, enter -0-. If this form is for a child under age 14, see

instructions

10

Subtract line 9 from line 4. If zero or less, enter -0- here and on line 15, and go to Part II. Form

1040NR filers, see instructions

10

11

11 If line 10 is $175,000 or less ($87,500 or less if married filing separately for 1996), multiply line

10 by 26% (.26). Otherwise, multiply line 10 by 28% (.28), and subtract $3,500 ($1,750 if married

filing separately for 1996) from the result. Caution: For a fiscal year taxpayer with a prior tax year

that includes May 7, 1997, the amount on this line cannot exceed the amount figured under

section 55(b)(3) (maximum rate of tax on net capital gain)

12 Minimum tax foreign tax credit on exclusion items. See instructions 12

13 Tentative minimum tax on exclusion items. Subtract line 12 from line 11 13

14 Enter the amount from your 1996 Form 6251, line 27, or Form 1041, Schedule I, line 40 14

15 Net minimum tax on exclusion items. Subtract line 14 from line 13. If zero or less, enter -0- 15

Minimum Tax Credit and Carryforward to 1998

16 Enter the amount from your 1996 Form 6251, line 28, or Form 1041, Schedule I, line 41 16

17 Enter the amount from line 15 above 17

18 Subtract line 17 from line 16. If less than zero, enter as a negative amount 18

19 1996 minimum tax credit carryforward. Enter the amount from your 1996 Form 8801, line 26 19

Enter the total of your 1996 unallowed nonconventional source fuel credit and 1996 unallowed

qualified electric vehicle credit. See instructions

20

20

21 Combine lines 18, 19, and 20. If zero or less, stop here and see instructions 21

22 Enter your 1997 regular income tax liability minus allowable credits. See instructions 22

23 Enter the amount from your 1997 Form 6251, line 26, or 1997 Form 1041, Schedule I, line 38 23

24 Subtract line 23 from line 22. If zero or less, enter -0- 24

25 Minimum tax credit. Enter the smaller of line 21 or line 24. Also enter this amount on the

appropriate line of your 1997 tax return. See instructions 25

26 Minimum tax credit carryforward to 1998. Subtract line 25 from line 21. See instructions 26

General Instructions

Section references are to the Internal

Revenue Code.

Purpose of Form

Form 8801 is used by individuals, estates,

and trusts to figure the minimum tax credit,

if any, for alternative minimum tax (AMT)

incurred in prior tax years after 1986. The

form is also used to figure any minimum

tax credit carryforward.

Who Should File

Form 8801 should be completed by

individuals, estates, and trusts that had:

● An AMT liability in 1996 and adjustments

or preferences (other than exclusion items)

in 1996,

● A minimum tax credit carryforward from

1996 to 1997, or

Cat. No. 10002S

Part II

Part I

Credit For Prior Year Minimum Tax—

Individuals, Estates, and Trusts

Form 8801 (1997)

97

Line 1. Estates and trusts. Skip lines 1

through 3 of Form 8801. Complete Parts I

and II of another 1996 Form 1041,

Schedule I. For Part I of Schedule I, take

into account only exclusion items (the

amounts included on lines 4a through 4d,

4p, and 4q of Schedule I) and any other

adjustments related to exclusion items

included on line 4u of Schedule I. On line 7

of Schedule I, use the minimum tax credit

net operating loss deduction (MTCNOLD).

Specific Instructions

The AMT is attributable to two types of

adjustments and preferences—deferral

items and exclusion items. Deferral items

generally do not cause a permanent

● A nonconventional source fuel credit or a

qualified electric vehicle credit not allowed

for 1996 (see the instructions for line 20).

File Form 8801 only if line 21 is more

than zero.

For Paperwork Reduction Act Notice, see back of form.

difference in taxable income over time (e.g.,

depreciation). Exclusion items, on the

other hand, do cause a permanent

difference (e.g., the standard deduction).

The minimum tax credit is allowed only on

the AMT attributable to deferral items.

(99)
Form 8801 (1997) Page 2

Step 3. Complete Part IV of Form 1116.

Enter the refigured credit from Form 1116,

line 32, on Form 8801, line 12.

For loss years beginning before 1987,

the amount of MTCNOL that may be

carried forward to tax years beginning after

1986 is equal to the amount of regular tax

NOL that may be carried from such loss

years to the first tax year beginning after

1986.

Line 20.—Enter the total of any

nonconventional source fuel credit and

qualified electric vehicle credit not allowed

for 1996 solely because of the limitation

under sections 29(b)(6)(B) and 30(b)(3)(B).

To determine the amount of MTCNOL

that may be carried to tax years other than

1996, apply sections 172(b)(2) and 172(d),

with appropriate modifications to take into

account exclusion items.

Line 4. If your filing status was married

filing separately for 1996 and line 4 is more

than $165,000, you must include an

additional amount on line 4. If line 4 is

$255,000 or more, include an additional

$22,500 on line 4. Otherwise, include 25%

of the excess of the amount on line 4 over

$165,000. For example, if the amount on

line 4 is $185,000, enter $190,000

instead—the additional $5,000 is 25% of

$20,000 ($185,000 minus $165,000).

Line 21.—If line 21 is zero or less, you do

not have a minimum tax credit or a

minimum tax credit carryforward. Do not

complete the rest of this form and do not

file it.

Line 22. Follow the instructions below and

refer to your 1997 income tax return to

figure the amount to enter on line 22.

Form 1040. Subtract from the amount

on line 39 (excluding any amount from

Form 4972) the total of any credits on lines

40 through 44 (not including any credit for

prior year minimum tax) and any write-in

credit on line 45.

Line 9. If you are completing this form for

a child who was under age 14 on January

1, 1997, and at least one of the child’s

parents was alive on December 31, 1996,

do not follow the instructions on the form

for line 9. Instead, if line 8 is equal to or

more than line 5, enter zero. Otherwise,

enter the smaller of (a) the amount by

which line 5 exceeds line 8, or (b) the

amount from line 17 of the worksheet for

line 22 of the child’s 1996 Form 6251,

refigured to take into account only

exclusion items.

Note: If you included any exclusion item on

a line not listed above, include that item in

the amount to be entered on line 2. For

example, if depletion was included on Form

6251 as an adjustment on line 11 (passive

activities) instead of on line 14c (depletion),

include it as an exclusion item when

figuring the amount for line 2.

Form 1040NR. Subtract from the amount

on line 38 (excluding any amount from

Form 4972) the total of any credits on lines

39 through 42 (not including any credit for

prior year minimum tax) and any write-in

credit on line 43.

Line 12. Minimum tax foreign tax credit

on exclusion items. Refigure your

minimum tax foreign tax credit using only

exclusion items attributable to sources

outside the United States. To do this, use

a separate 1996 Form 1116, Foreign Tax

Credit, for each type of income and follow

the steps below.

Form 1041, Schedule G. Subtract the

total of any credits on lines 2a through 2c

from line 1c (excluding any amount from

Form 4972).

Line 3. Minimum tax credit net operating

loss deduction (MTCNOLD). Your

MTCNOLD is the aggregate of the

minimum tax credit net operating loss

(MTCNOL) carryovers and carrybacks to

1996. Your MTCNOL is figured as follows: Step 1. Fill in Part I of Form 1116 using

that part of your taxable income and

exclusion items attributable to sources

outside the United States.

Line 25. Minimum tax credit. Enter the

minimum tax credit on the following line of

your 1997 tax return: Form 1040, line 44;

Form 1040NR, line 42; Form 1041,

Schedule G, line 2d.

Step 2. Fill in Part III of Form 1116.

However, instead of entering the AMT

foreign tax credit carryover on line 10 of

Form 1116, use the foreign tax credit

carryover, if any, figured on exclusion

items. Enter the amount from line 4 of your

1997 Form 8801 on line 17 of Form 1116.

Enter on line 19 of Form 1116 the amount

from line 11 of your 1997 Form 8801.

For loss years beginning after 1986, your

MTCNOL is the excess of the deductions

(excluding the MTCNOLD), over the

income used to figure AMTI, taking into

account only exclusion items. Figure this

excess with the modifications in section

172(d), taking into account only exclusion

items (i.e., the section 172(d) modifications

should be figured separately for the

MTCNOL).

For example, the limitation of

nonbusiness deductions to the amount of

nonbusiness income must be figured

separately for the MTCNOL using only

nonbusiness income and deductions,

taking into account only exclusion items.

However, ignore the disallowance of the

deduction for personal exemptions under

section 172(d)(3) because it has already

been taken into account in figuring AMTI

using only exclusion items.

Line 26. Carryforward of minimum tax

credit. Keep a record of this amount

because it can be carried forward and

used in future years.

Line 2. Enter on this line the adjustments

and preferences treated as exclusions.

Exclusion items are your AMT adjustments

and preferences for: the standard

deduction, itemized deductions (including

any investment interest expense reported

on Schedule E), charitable contributions of

appreciated property, certain tax-exempt

interest, depletion, and any other

adjustments related to exclusion items.

Combine lines 1 through 7, 13, 14a, and

14c of your 1996 Form 6251. If you

included on line 14n any adjustments

related to exclusion items, also include

those adjustments in the amount to be

entered on line 2. Enter the total on

line 2.

If line 13 of Form 1116 is greater than

line 20 of Form 1116, keep a record of the

difference between those two lines. This

amount is carried forward and used to

figure your foreign tax credit on exclusion

items next year.

Line 10. If you filed Form 1040NR for 1996

and had a net gain on the disposition of

U.S. real property interests, line 10 cannot

be less than the smaller of that net gain or

line 4.

The time needed to complete and file

this form will vary depending on individual

circumstances. The estimated average time

is: Recordkeeping, 1 hr., 33 min.;

Learning about the law or the form, 1

hr., 13 min.; Preparing the form, 1 hr.;

Copying, assembling, and sending the

form to the IRS, 17 min.

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form simpler,

we would be happy to hear from you. See

the instructions for the tax return with

which this form is filed.

Paperwork Reduction Act Notice. We

ask for the information on this form to

carry out the Internal Revenue laws of the

United States. You are required to give us

the information. We need it to ensure that

you are complying with these laws and to

allow us to figure and collect the right

amount of tax.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records relating

to a form or its instructions must be

retained as long as their contents may

become material in the administration of

any Internal Revenue law. Generally, tax

returns and return information are

confidential, as required by section 6103.

However, do not limit the MTCNOLD to

90% of the amount on line 6 of Schedule I

(see the instructions for line 3 below for

how to figure the MTCNOLD). On Part II of

Schedule I, do not take into account any

basis adjustments arising from deferral

items in completing lines 18 and 19. If the

amount on line 12 of Schedule I is zero or

less, enter zero on line 4 of Form 8801.

Otherwise, enter the amount from line 12

of Schedule I, adjusted for exclusion items

that were allocated to the beneficiary, on

line 4 of Form 8801.