6251 Alternative Minimum Tax Computation [pe
Form
Department of the Treasury > Attach to Forms 1040, 1040NR, 1041 or 990-T (Trust). || @ 8 6
Internal Revenue Service sere 32
Name(s) as shown on tax return Identifying number
1 Adjusted gross income (see instructions) ee 6
2 Deductions (Individuals, attach Schedule A (Form 1040)\se6 instructions): Yy
(1) Medical and dental expense from Schedule A, line5 . 2a(1)
(2) Multiply Form 1040, line 33, by 5% (.05) . 2a(2) Mh
(3) Subtract line 2a(2) from line 2a(1). (If zero or less, enter zero. ). 2a(3) 7)
b Contributions from Schedule A, line 18, OR Form 1040, line 34d . 2b
¢ Casualty and theft losses from Schedule A, line 19 . . 2c
4 Qualified interest on property used as a residence (see instructions) . 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) I) ]};
(3) Enter the smaller of line 2e(1) or line 2e(2) . 2e(3)
£ Gambling losses to the extent of gambling winnings from Schedule A, line 22 2f yy
g Estate tax allowable under section 691(c) from ScheduleA . 2g
h Estates and trusts only: Charitable deduction and income distribution deduction 2h SV, YY Up
i Add lines 2a(3), b,c, d, e(3), f,g,andh . 2i
3 Subtract line 2i from line 1. 3 |
4 Tax preference items:
a Dividend exclusion . 4a qi
b 60% capital gain deduction 4b yy
c Accelerated depreciation on nonrecovery y real property or 15, 18, or 19. -year real property 4c Yy
d Accelerated depreciation on leased personal property or leased recovery property 7 yy jj
other than 15-, 18-, or 19-year real property. 44a /
e Amortization of certified pollution control facilities fe
f Mining exploration and development costs . . 4f
g Circulation and research and experimental expenditures . 4g .
h Reserves for losses on bad debts of financial institutions . 4h
i Depletion . Le 4i
j Incentive stock options . 4j lL
k Intangible drilling costs . 4k MMM Mi
I Add lines 4a through 4k, . 4l
5 Alternative minimum taxable income (add lines 3 and 40) (short period returns, see ‘instructions).. 5
6 Enter: $40,000, if married filing joint return or Qualifying widow(en) .
$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 line7 . 8
9 Amount from Form 1040, line 49, or Form ‘1O40NR, line 49. (Do not include Form 1040, ‘ine 39, or ‘Form
1040NR, line 40.) (Estates and trusts, see instructions.). 9
10 Subtract line 9 from line 8. If zero or less, enter zero 10
11 Foreigntaxcredit. . . . il
12 ALTERNATIVE minimum tax (subtract line ll from line 10). Enter on n your tax return, on n the fine identified
as alternative minimum tax 12

Instructions
(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) your adjusted gross
income is more than line 6 and 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.

For more information, see Publication 909,
Alternative Minimum Tax.

Minimum Tax Deferred From Earlier
Year(s).—If a net operating loss carryover from

(2) Beneficiary of an estate or trust, see section
58(c) and the line 4(1) instructions.

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

an earlier year(s) reduces taxable income for
1986 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
1986. Figure the deferred minimum tax in the
worksheet in Publication 909 and enter it on

Form 1040, line 51, 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 enter
into the computation of tax preference items.

(4) Shareholder or holder of beneficial interest in
a regulated investment company or a real estate
investment trust, see section 58(f).

Carryback and Carryover of Unused Credits.—
It may be necessary fo figure the carryback or
carryover of certain unused credits. See section
55(c)(3).

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

Line-by-Line Instructions

Line 1, Estates and Trusts.—Adjusted gross
income is figured in the same way as for an

Form 6251 (1986)


Form 6251 (1986)

Page 2

individual except that the costs of the
administration of the estate or trust are allowed in
figuring adjusted gross income.

All taxpayers. —Do not deduct any interest
expense incurred to purchase or carry a limited
business interest in a partnership or $ corporation,
in figuring adjusted gross income. Instead, include
in line 2(e)(1).

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

Add to adjusted gross income any net operating
loss deduction taken, and reduce the result by any
alternative tax net operating loss deduction. 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. Include on line 2h, any itemized
deduction not allowable on lines 2a to 2g, and
allocated to the beneficiaries of the estate or trust.
Line 2(d).—Enter on line 2(d) your qualified
interest from Schedule A, line 11. Include
allowable points from line 13.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(a). 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. —
luals.—Enter your 60% capital gain
deduction from your Schedule D (Form 1040), line
20, 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.

Certain insolvent farmers may reduce their
capital gain tax preference item on a farm
insolvency transaction. See Publication 909 for
more information. Indicate any reduction on the
dotted portion of line 4(b), and write “Section
13208 Relief.”

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, 18, or 19-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, 18, or 19-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, 18, or 19-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 15,18,
or 19-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, and the
following recovery period:

3 year property 5 years
5 year property voee B years,
10 year property sesseesed 5 years
15 year public utility property........22 years

Note: /f the recovery period actually used is longer
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
control 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 amortiz-
ed 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. —tn 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 develop-
ment costs (except for costs in drilling a non-
productive 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.

Line 4(1), Special Tax Preference Item for
Estate and Trust Beneficiaries. Some itemized
deductions of the estate or trust (such as state and
local taxes) are deducted by the estate or trust in
figuring the income passed through to you, but are
not allowed as itemized deductions on this form.
These amounts must be treated as a tax
preference item allocated to you, The estate or
trust should separately show these amounts on the
Schedule K-1 it sends you, Add any such amounts
to the total of your other tax preference items on
line 4(1). Also, on the dotted line to the left of the
entry space for line 4(1), write "Section 58(c)" and
indicate the amount.

Lines 5 and 8.—I 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 your tax after
credits. 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 online 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
1116.

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

(3) Part 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 IIl.—Complete only the following
lines:

(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

Gi) the amount from Part Il, ine 15 of that
Form 1116, plus
Gi) the smaller of (A) the amount from Part Ill,

line 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

(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).