Last Updated : January 14, 2009
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6251

Form 6251

Alternative Minimum Tax – Individual.

Purpose of Form:
Use this form to figure the amount, if any, of your alternative minimum tax (AMT). The AMT applies to taxpayers who have certain types of income that receive favorable treatment, or who qualify for certain deductions, under the tax law.

The tax laws give preferential treatment to certain kinds of income and allow special deductions and credits for certain kinds of expenses. The AMT attempts to ensure that anyone who benefits from these tax advantages pays at least a minimum amount of tax. The AMT is a separately figured tax that eliminates many deductions and credits, thus increasing tax liability for an individual who would otherwise pay less tax.

Who must file this form?

  • Attach this form to if any of the following conditions are true;
  • Line 31 of form 6251 is greater than line 34.
  • If claimed any general business credit, the qualified electric vehicle credit, the alternative motor vehicle credit, the alternative fuel vehicle refueling property credit, or the credit for prior year minimum tax.
  • The total of Form 6251, lines 8 through 27, is negative and 31 would be greater than line 34 if you did not take into account lines 8 through 27.

Line 1:
If Form 1040, line 43, includes a write-in amount (such as a capital construction fund deduction for commercial fishermen), adjust line 1 by the write-in amount.

Line 4:
Complete the Home Mortgage Interest Adjustment Worksheet to figure taxpayer’s home mortgage interest adjustment. An eligible mortgage is a mortgage whose proceeds were used to buy, build, or substantially improve main home or a second home of the taxpayer that is a qualified dwelling. A mortgage whose proceeds were used to refinance another mortgage is not an eligible mortgage.

A qualified dwelling is any house, apartment, condominium, or mobile home not used on a transient basis.

Line 7:
Amount on this line transfers from Form 1040, line 10 (or Form 1040NR, line 11), that is attributable to state or local income taxes. Also include any refunds received in 2006 and included in income on Form 1040, line 21 that are attributable to state or local personal property taxes or general sales taxes, foreign income taxes, or state, local, or foreign real property taxes.

Line 8:
Enter here the difference between allowable investment interest expense for regular tax and alternative minimum tax.

Line 9:
On this line refigure depletion deduction for the AMT. This amount should be difference between the regular tax and AMT deduction.

Line 11:
Enter on this line interest earned on “specified private activity bonds” reduced (but not below zero) by any deduction that would have been allowable if the interest were includible in gross income for the regular tax.

Line 12:
If taxpayer claimed the exclusion under section 1202 for gain on qualified small business stock held more than 5 years, multiply the excluded gain (as shown on Schedule D – Form 1040) by 7%. Enter the result on this line as a positive amount.

Line 13:
Include on line 13 the excess of, if any, of;

  1. The fair market value of the stock acquired through exercise of the option when your rights in the acquired stock first become transferable or when these rights are not longer subject to a substantial risk of forfeiture.
  2. The amount you paid for the stock, including any amount you paid for the ISO used to acquire the stock.

Line 15:
If taxpayer is a partner in an electing large partnership, enter the amount form Schedule K-1 (Form 1065-B), box 6. Take into account any amount from box 5 on Form 6251, line 18.

Line 16:
Taxpayer’s AMT gain or loss from the disposition of property may be different from his/her gain or loss for the regular tax. Use this line to report any AMT adjustment resulting from refiguring:

  1. Gain or loss from the sale, exchange, or involuntary conversion of property reported on Form 4797, sales of business property;
  2. Casualty gain or loss to business or income-producing property reported on Form 4684.
  3. Ordinary income from the disposition of property not already taken into account in (1) or (2) above or on any other line on Form 6251, such as a disqualifying disposition of stock acquired in a prior year by exercising an incentive stock option; and
  4. Capital gain or loss (including any carryover that is different for the AMT) reported on Schedule D (Form 1040).

Line 17:
Enter on this line depreciation on assets placed in service after 1986. This section describes when depreciation must be refigured for the AMT and how to figure the amount to enter on line 17. For further information see the instruction given by IRS.

Line 18:
The program calculates the gains and losses from passive activity, which must be refigured for the AMT by taking into account all adjustments and preferences and any AMT prior year unhallowed losses that apply to that activity.

Line 19:
Refigure gain and losses from activities for which taxpayer are not at risk and basis limitations applicable to partnerships and S corporations by taking into account all AMT adjustments and preferences that apply.

Line 20:
Circulation costs deducted in full for the regular tax in the year they were paid or incurred must be capitalized and amortized over 3 years for the AMT. Enter the difference between the regular tax and AMT deduction. If the AMT deduction is greater, enter the difference as a negative amount.

Line 21:
For the AMT, taxpayer generally must use the percentage-of-completion method described in section 460(b) to determine taxpayer’s income from any long-term contract. However, this rule does not apply to any home construction contract. Enter the difference between the AMT and regular tax income. If the AMT income is smaller, enter the difference as a negative amount.

Line 22:
Mining exploration and development costs deducted in full for the regular tax in the tax year they were paid or incurred must be capitalized and amortized over 10 years for the AMT. Enter the difference between the regular tax and AMT deduction. If the AMT deduction is greater, enter the difference as a negative amount.

If taxpayer had a loss on property for which mining costs have not been fully amortized for the AMT, taxpayer’s AMT deduction is the smaller of

  • the loss allowable for the costs had they remained capitalized or
  • the remaining costs to be amortized for the AMT.

Line 23:
Research and experimental costs deducted in full for the regular tax in the tax year they were paid or incurred must be capitalized and amortized over 10 years for the AMT. Enter the difference between the regular tax and AMT deduction. If the AMT deduction is greater, enter the difference as a negative amount.

If taxpayer had a loss on property for which research and experimental cost have not been fully amortized for the AMT, taxpayer’s AMT deduction is the smaller of

  • the loss allowable for the cost had they remained capitalized, or
  • the remaining costs to be amortized for the AMT.

Line 24:
The installment method does not apply for the AMT to any nondealer disposition of property after August 16, 1986, but before January 1, 1987, if an installment obligation to which the proportionate disallowance rule applied arose from the disposition. Enter on this line the amount of installment sale income reported for the regular tax.

Line 25:
Intangible Drilling Costs from oil, gas, and geothermal wells are a preference to the extent that the excess IDCs exceed 65% of the net income from the wells. Figure the preference for all oil and gas properties separately from the preference for all geothermal properties.

Line 26:
Enter on this line the total of any other adjustments that apply to you, including the following,

  • Depreciation figured using pre-1987 rules.
  • Patron’s Adjustment.
  • Pollution Control Facilities.
  • Tax Shelter Farm Activities.
  • Charitable Contributions of Certain Property.
  • Alcohol, Biodiesel, and Renewable Diesel Fuels Credits.
  • Other Related Adjustments.

For further information please see the instruction issued by IRS.

Line 27:
The ATNOLD is the sum of the alternative tax net operating loss (ATNOL) carryovers and carrybacks to the tax year, subject to the limitation explained. For more information on ATNOLD, see IRS instructions.

Line 28:
If taxpayer’s filing status is married filing separately and line 28 is more than $200,100, taxpayer must include an additional amount on line 28. If line 28 is $325,000 or more, include an additional $31,275. Otherwise, include 25% of the excess of the amount on line 28 over $200,100.

Line 29:
The program computes automatically the exemption amount based on the taxpayer’s filing status.

Line 32:
To calculate alternative minimum tax foreign tax credit, complete Form 1116AMT. Use a separate AMT Form 1116 for each separate category of income.

Line 34:
If taxpayer used Schedule J to figure tax on form 1040, taxpayer must refigure that tax without using Schedule J before completing this line. This is only for Form 6251; do not change the amount on Form 1040, line 44 (or Form 1040NR, line 41).

Lines 37, 38, and 39:
Taxpayer can fill out lines 37, 38, and 39 using the amounts from the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, whichever applies, and Schedule D, if you completed Schedule D.

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