Section 59(e)(2) expenditures refer to expenses that are paid or incurred in connection with the production or collection of income from passive activities. These expenses are generally not deductible in the current tax year but can be added to the shareholder's basis in their S Corporation stock. Shareholders report these expenditures on Line 11 of Form 6251 (Alternative Minimum Tax—Individuals) or Line 15 of Form 6251-A (Alternative Minimum Tax—Corporations).