U.S. Individual Income Tax Return

2007 Instructions for Form 6251,
Alternative Minimum Tax—Individuals
Purpose: This is the first circulated draft of the 2007 Instructions for Form 6251
for your review and comments. See below for a discussion of the major
changes.
TPCC Meeting: None, but one may be arranged if requested.
Prior Version: The 2006 Instructions for Form 6251 is available at:
http://www.irs.gov/pub/irs-pdf/i6251.pdf
Form: The 2007 Form 6251 was circulated earlier at:
http://taxforms.web.irs.gov/Products/Drafts/2007-2/07f6251_d1.pdf
Other Products: Circulations of draft tax forms, instructions, notices, and
publications are posted at:
http://taxforms.web.irs.gov/draft_products.html
Comments: Please email, fax, or call with any comments by August 6, 2007.
Also please email any comments to the reviewer at Karl.D.Blake@irs.gov
Michael C. Young
Tax Forms and Publications
SE:W:CAR:MP:T:I:S
Email: Michael.C.Young@irs.gov
Phone: 202-622-9791
Fax: 202-622-5022

Description of Major Changes for the
2007 Instructions for Form 6251
General Changes
•

All applicable year and Form 6251 line references are updated.

•

Some page references may not have been updated.

•

Lines 6, 7, and 24 contain language instructing taxpayers that the
amounts on these lines must be entered as negative amounts. [Adopted
email suggestion, AF030607-15, 3/13/2007]

Specific Changes
Page 1
•

The “What’s New” section has been updated for 2007. All prior year
bullet paragraphs have been removed. Bullet paragraphs have been
added for:
o The 2007 exemption amounts, [PL 109-222, sec 301; IRC 55(d)(1)]
o The increase in exemption amount for a child under age 18, [IRC
59(j); RP 2006-53, Sec. 3.09]
o The expiration of the additional exemption amount for providing
housing for a person displaced by Hurricane Katrina, [PL 109-73,
Sec. 302(a)]
o The requirement to fill out Form 6251 through line 31 to figure the
tax liability limit on certain credits [expiration of IRC 26(a)(2)], and
o The fact that generally no adjustment is required for the deduction
of qualified mortgage insurance premiums [PL 109-432, Sec. 419,
and Chief Counsel email].

•

A second list item under “Who Must File” has been added to list the
credits that may require a taxpayer to complete and attach Form 6251,
even if they do not owe alternative minimum tax. [expiration of IRC
26(a)(2)]

•

The third list item under “Who Must File” was revised to show that Form
6251, if not otherwise required, does not have to be attached to the return
when the taxpayer claims a general business credit not claimed on Form
3800. When figuring the tax liability limit on those credits, the tentative
minimum tax is treated as zero. For 2007, this includes the work
opportunity credit claimed on Form 5884 and the employer tip credit
claimed on Form 8846. [PL 110-28, Sec. 8214; IRC 38(c)(4)]

•

Under “Recordkeeping,” we changed the language requiring taxpayers to
attach Form 1116 from “must” to “may have to.” [Office of Taxpayer
Burden Reduction] See specific changes to “Line 32,” on page 9.

•

The paragraph “Nonresident Alien Spouse” has been added for a
taxpayer who is eligible to file as head of household because the
taxpayer’s spouse is a nonresident alien. In such a case, the taxpayer
must complete lines 6, 28, 29, 31, 42, and 54, and the worksheets for lines
29 and 31 as if the taxpayer’s filing status is married filing separately.
[IRC 2(b)(2)(B); 7703; 68(b)(1); 55(d)(1); and 55(b)(1)(A)(iii)]

Page 2
•

The “Line 1”instruction for Form 1040NR filers has been updated to
remove the reference to the additional exemption amount for providing
housing for a person displaced by Hurricane Katrina. [PL 109-73, Sec.
302(a)]

•

The “Home Mortgage Interest Adjustment Worksheet” was revised to
allow the deduction for premiums paid on mortgage insurance for AMT
purposes (to the extent that the premiums otherwise meet the
requirements of IRC 56(e)). Premiums paid “in connection with” home
acquisition debt are treated as paid “on” home acquisition debt.
[CC:ITA:B05, email 5/14/07; PL 109-432, Sec. 419]

•

The “Line 6” instruction for Form 1040NR filers has been updated to
reflect the increase in the adjusted gross income threshold amounts for
reducing itemized deductions. [RP 2006-53, Sec. 3.12]

Page 3
•

The “Line 11” instruction has been revised to reflect the now mandatory
requirement that payers report interest from private activity bonds and
exempt-interest dividends on Forms 1099-INT, box 9. [Notice 2006-93]

Page 7
•

The dollar amounts in the instructions for “Line 28—Alternative Minimum
Taxable Income” and the “Exemption Worksheet—Line 29” have been
updated as a result of the decrease in the exemption amounts. [IRC
55(d)(1)&(3)]

•

The exemption amount for a child under age 18 has been updated in the
“Exemption Worksheet—Line 29.” [IRC 59(j); IRC 1(g)(2); and RP
2006-53 sec 3.09]

Page 9
•

The “Line 32” instruction has been revised (under “Step 8”) to state that
AMT Forms 1116 do not have to be attached if the taxpayer’s AMTFTC is
the same as the taxpayer’s regular tax foreign tax credit. [Office of
Taxpayer Burden Reduction]

Page 10
•

The dollar amounts have increased in the “Line 43” instruction for Form
1040NR filers. [RP 2006-53, Sec. 3.01]

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Instructions for Form 6251

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2007

Department of the Treasury
Internal Revenue Service

Instructions for Form 6251
Alternative Minimum Tax—Individuals
Section references are to the Internal
Revenue Code unless otherwise noted.

General Instructions
What’s New

• For 2007, the exemption amount has

decreased to $33,750 ($45,000 if married
filing jointly or qualifying widow(er);
$22,500 if married filing separately).
• For 2007, the minimum exemption
amount for a child under age 18 has
increased to $6,300.
• Beginning in 2007, you can no longer
deduct the additional exemption amount
that was allowable if you provided
housing for a person displaced by
Hurricane Katrina.
• Even if you do not owe alternative
minimum tax, you may need to fill out
Form 6251 through line 31 to figure the
tax liability limit on the credits listed under
Who Must File below.
• In most cases, no adjustment is
required for the deduction of qualified
mortgage insurance premiums. But see
the worksheet for line 4 on page 2.

Purpose of Form
Use Form 6251 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. These tax benefits can
significantly reduce the regular tax of
some taxpayers with higher economic
incomes. The AMT sets a limit on the
amount these benefits can be used to
reduce total tax.
Also use Form 6251 to figure the tax
liability limit on the credits listed under
Who Must File below.

Who Must File
Attach Form 6251 to your return if any of
the following statements is true.
1. Form 6251, line 31, is greater than
line 34.
2. You file any of the following forms,
and the instructions for that form require
you to fill out Form 6251 through line 31.
a. Form 2441, Child and Dependent
Care Expenses.
b. Schedule R (Form 1040), Credit for
the Elderly or the Disabled.
c. Form 8863, Education Credits.
d. Form 5695, Residential Energy
Credits.
e. Form 8396, Mortgage Interest
Credit.

f. Form 8859, District of Columbia
First-Time Homebuyer Credit.
3. You claim any general business
credit on Form 3800, 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.
4. The total of Form 6251, lines 8
through 27, is negative and line 31 would
be greater than line 34 if you did not take
into account lines 8 through 27.

Recordkeeping
For the AMT, certain items of income,
deductions, etc., receive different tax
treatment than for the regular tax.
Therefore, you need to refigure items for
the AMT that you figured for the regular
tax. In some cases, you may wish to do
this by completing the applicable tax form
a second time. If you do complete another
form, do not attach it to your tax return,
but keep it for your records. However, you
may have to attach an AMT Form 1116,
Foreign Tax Credit, to your return; see the
instructions for line 32 beginning on
page 8.
For the regular tax, some deductions
and credits may result in carrybacks or
carryforwards to other tax years.
Examples are investment interest
expense, a net operating loss, a capital
loss, a passive activity loss, and the
foreign tax credit. Because you may have
to refigure these items for the AMT, the
carryback or carryforward amount may be
different for the AMT than for the regular
tax. Your at-risk limits and basis amounts
also may differ for the AMT. Therefore,
you must keep records of these different
amounts.

Partners and Shareholders
If you are a partner in a partnership or a
shareholder in an S corporation, see
Schedule K-1 and its instructions to figure
your adjustments or preferences from the
partnership or S corporation to include on
Form 6251.

Nonresident Aliens
If you are a nonresident alien and you
disposed of U.S. real property interests at
a gain, you must make a special
computation. Fill in Form 6251 through
line 30. If your net gain from the
disposition of U.S. real property interests
and the amount on line 28 are both
greater than the tentative amount you
Cat. No. 64277P

figured for line 30, replace the amount on
line 30 with the smaller of that net gain or
the amount on line 28. Also, enter “RPI”
on the dotted line next to line 30.
Otherwise, do not change line 30.

Nonresident Alien Spouse
If your filing status is head of household
and you entered “NRA spouse” on line 4
of Form 1040 because your spouse was a
nonresident alien at any time during the
year, you must complete lines 6, 28, 29,
31, 42, and 54, and the worksheets for
lines 29 and 31, as if your filing status is
married filing separately.

Credit for Prior Year
Minimum Tax
See Form 8801, Credit for Prior Year
Minimum Tax — Individuals, Estates, and
Trusts, if you paid AMT for 2006 or you
had a minimum tax credit carryforward on
your 2006 Form 8801. If you pay AMT for
2007, you may be able to take a credit on
Form 8801 for 2008.

Optional Write-Off for
Certain Expenditures
There is no AMT adjustment for the
following items if you elect for the regular
tax to deduct them ratably over the period
of time shown.
• Circulation expenditures — 3 years
(section 173).
• Research and experimental
expenditures — 10 years (section 174(a)).
• Mining exploration and development
costs — 10 years (sections 616(a) and
617(a)).
• Intangible drilling costs — 60 months
(section 263(c)).
For information on making the election,
see section 59(e) and Regulations section
1.59-1. Also see Pub. 535.

Specific Instructions
If you owe AMT, you may be able

TIP to lower your total tax (regular tax
plus AMT) by claiming itemized
deductions on Form 1040, even if your
total itemized deductions are less than
the standard deduction. This is because
the standard deduction is not allowed for
the AMT and, if you claim the standard
deduction on Form 1040, you cannot
claim itemized deductions for the AMT.

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Instructions for Form 6251

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Home Mortgage Interest Adjustment Worksheet —
Line 4

Keep for Your
Records

1. Enter the total of the home mortgage interest you deducted on lines 10
through 12 of Schedule A (Form 1040) and any qualified mortgage
insurance premiums you deducted on line 13 of Schedule A (Form 1040) 1.
2. Enter the part, if any, of the interest included on line 1
above that was paid on an eligible mortgage (defined
on this page). Include any qualified mortgage insurance
premiums included on line 1 above that were paid in
connection with an eligible mortgage . . . . . . . . . . . . 2.
3. Enter the part, if any, of the interest included on line 1
above that was paid on a mortgage whose proceeds
were used in a refinancing (including a second or later
refinancing) of an eligible mortgage. Include any
qualified mortgage insurance premiums included on
line 1 above that were paid in connection with such a
mortgage. Do not include any interest paid on the part
of the balance of the new mortgage that exceeded the
balance of the original eligible mortgage immediately
before it was refinanced (or, if smaller, the balance of
any prior refinanced mortgage immediately before that
mortgage was refinanced) . . . . . . . . . . . . . . . . . . . 3.
4. Enter the part, if any, of the interest included on line 1
above that was paid on a mortgage:
• Taken out before July 1, 1982, and
• Secured, at the time the mortgage was taken out, by
your main home or a qualified dwelling used by you or
your family (see definitions on this page).
Do not include any amount entered on line 2 or line 3
above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Add lines 2 through 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
6. Subtract line 5 from line 1 and enter the result on Form 6251, line 4 . . . . 6.

Part I—Alternative
Minimum Taxable Income
(AMTI)
To avoid duplication, any
adjustment or preference for line
CAUTION 5, 18, or 19 or for a tax shelter
farm activity on line 26 must not be taken
into account in figuring the amount to
enter for any other adjustment or
preference.

!

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.
Form 1040NR. If you are filing Form
1040NR, enter the amount from Form
1040NR, line 38. If less than zero, enter
as a negative amount.

Line 3—Taxes
Enter the amount of all taxes from
Schedule A (Form 1040), line 9, except
generation-skipping transfer taxes on
income distributions. Be sure to include
any state and local general sales taxes
included on Schedule A, line 9.
Form 1040NR. If you are filing Form
1040NR, enter the amount of all taxes
from Schedule A (Form 1040NR), line 3,
except generation-skipping transfer taxes
on income distributions.

Line 4—Home Mortgage
Interest Adjustment
Complete the worksheet on this page to
figure your home mortgage interest
adjustment. The definitions of certain
terms used in the worksheet are as
follows.
Eligible mortgage. An eligible mortgage
is a mortgage whose proceeds were used
to buy, build, or substantially improve
your main home or a second home that is
a qualified dwelling. A mortgage whose
proceeds were used to refinance another
mortgage is not an eligible mortgage.
Qualified dwelling. A qualified dwelling
is any house, apartment, condominium, or
mobile home not used on a transient
basis.
Family. Family includes only your
brothers and sisters (whether by whole or
half blood), your spouse, your ancestors,
and your lineal descendants.
Example. In 2007, Dave and Jennifer
paid $10,000 in interest on a mortgage
they took out to buy their home (an
eligible mortgage). In May 2007, they
refinanced that mortgage and paid $9,000
in interest through the rest of the year.
The balance of the new mortgage is the
same as the balance of the old mortgage.
In July 2007, they obtained a home equity
loan on their home and used the
proceeds to buy a new car. They paid
$5,000 in interest on the home equity loan
in 2007. They enter the following amounts
on the Home Mortgage Interest
Adjustment Worksheet: $24,000 on line 1

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($10,000 plus $9,000 plus $5,000),
$10,000 on line 2, $9,000 on line 3, $ -0on line 4, $19,000 on line 5 ($10,000 plus
$9,000), and $5,000 on line 6 ($24,000
minus $19,000).

Line 5—Miscellaneous
Deductions
If you are filing Form 1040NR, enter the
amount from Schedule A (Form 1040NR),
line 15.

Line 6
Enter the amount from line 11 of the
Itemized Deductions Worksheet as a
negative amount.
Form 1040NR. If you are filing Form
1040NR and line 36 is over $156,400
(over $78,200 if you checked filing status
box 3, 4, or 5), enter the amount from line
11 of the Itemized Deductions Worksheet
in the instructions for Form 1040NR as a
negative amount on line 6.

Line 7—Refund of Taxes
Include any refund 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 2007
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.
Enter the total as a negative amount. If
you include an amount from Form 1040,
line 21, you must enter a description and
the amount next to the entry space for
line 7. For example, if you include a
refund of real property taxes, enter “real
property” and the amount next to the
entry space.

Line 8—Investment Interest
If you filled out Form 4952, Investment
Interest Expense Deduction, for your
regular tax, you will need to fill out a
second Form 4952 for the AMT as
follows.
Step 1. Follow the Form 4952
instructions for line 1, but also include the
following amounts when completing
line 1.
• Any interest expense on Form 6251,
line 4, that was paid or accrued on
indebtedness attributable to property held
for investment within the meaning of
section 163(d)(5) (for example, interest on
a home equity loan whose proceeds were
invested in stocks or bonds).
• Any interest that would have been
deductible if interest earned on private
activity bonds issued after August 7,
1986, had been includible in gross
income.
Step 2. Enter your AMT disallowed
investment interest expense from 2006 on
line 2. Complete line 3.
Step 3. When completing Part II,
refigure the following amounts, taking into
account all adjustments and preferences.
• Gross income from property held for
investment.
• Net gain from the disposition of
property held for investment.

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• Net capital gain from the disposition of

property held for investment.
• Investment expenses.
Include any interest income and
investment expenses from private activity
bonds issued after August 7, 1986.
On line 4g, enter the smaller of:
1. The amount from line 4g of your
regular tax Form 4952, or
2. The total of lines 4b and 4e of this
AMT Form 4952.
Step 4. Complete Part III.
Enter on Form 6251, line 8, the
difference between line 8 of your AMT
Form 4952 and line 8 of your regular tax
Form 4952. If your AMT expense is
greater, enter the difference as a negative
amount.
Investment interest expense that is not
an itemized deduction. If you did not
itemize deductions and you had
investment interest expense, do not enter
an amount on Form 6251, line 8, unless
you reported investment interest expense
on Schedule E. If you did, follow the steps
above for completing Form 4952. Allocate
the investment interest expense allowed
on line 8 of the AMT Form 4952 in the
same way you did for the regular tax.
Enter on Form 6251, line 8, the difference
between the amount allowed on Schedule
E for the regular tax and the amount
allowed on Schedule E for the AMT.

Line 9—Depletion
You must refigure your depletion
deduction for the AMT. To do so, use only
income and deductions allowed for the
AMT when refiguring the limit based on
taxable income from the property under
section 613(a) and the limit based on
taxable income, with certain adjustments,
under section 613A(d)(1). Also, your
depletion deduction for mines, wells, and
other natural deposits under section 611
is limited to the property’s adjusted basis
at the end of the year, as refigured for the
AMT, unless you are an independent
producer or royalty owner claiming
percentage depletion for oil and gas wells
under section 613A(c). Figure this limit
separately for each property. When
refiguring the property’s adjusted basis,
take into account any AMT adjustments
you made this year or in previous years
that affect basis (other than current year
depletion).
Enter the difference between the
regular tax and AMT deduction. If the
AMT deduction is greater, enter the
difference as a negative amount.

Line 10—Net Operating Loss
Deduction
If you are filing Form 1040NR, enter your
net operating loss deduction from Form
1040NR, line 21, as a positive amount.

Line 11—Interest From Private
Activity Bonds
Enter on line 11 interest you 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. Each payer of this type of
interest should send you a Form
1099-INT showing the amount of this
interest in box 9. Generally, the term
“specified private activity bond” means
any private activity bond (as defined in
section 141) issued after August 7, 1986.
See section 57(a)(5) for exceptions and
more details.
Do not include interest on qualified
Gulf Opportunity Zone bonds described in
section 1400N(a).
Exempt-interest dividends paid by a
regulated investment company are
treated as interest income on specified
private activity bonds to the extent the
dividends are attributable to interest on
the bonds received by the company,
minus an allocable share of the expenses
paid or incurred by the company in
earning the interest. This amount should
also be reported to you on Form
1099-INT in box 9.
If you are filing Form 8814, Parents’
Election To Report Child’s Interest and
Dividends, any tax-exempt interest
income from line 1b of that form that is a
preference item must be included on this
line.

Line 12—Qualified Small
Business Stock
If you 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% (.07). Enter the result
on line 12 as a positive amount.

Line 13—Exercise of Incentive
Stock Options
For the regular tax, no income is
recognized when an incentive stock
option (ISO), as defined in section 422(b),
is exercised. However, this rule does not
apply for the AMT. Instead, you generally
must include on line 13 the excess, if any,
of:
1. The fair market value of the stock
acquired through exercise of the option
(determined without regard to any lapse
restriction) when your rights in the
acquired stock first become transferable
or when these rights are no longer subject
to a substantial risk of forfeiture, over
2. The amount you paid for the stock,
including any amount you paid for the ISO
used to acquire the stock.
Note. Even if your rights in the stock are
not transferable and are subject to a
substantial risk of forfeiture, you may
elect to include in AMT income the
excess of the stock’s fair market value
(determined without regard to any lapse
restriction) over the exercise price upon
the transfer to you of the stock acquired
through exercise of the option. You must
make the election by the 30th day after
the date of the transfer. See Pub. 525,
Taxable and Nontaxable Income, for
more details.
If you acquired stock by exercising an
ISO and you disposed of that stock in the
same year, the tax treatment under the

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regular tax and the AMT is the same, and
no adjustment is required.
Increase your AMT basis in any stock
acquired through the exercise of an ISO
by the amount of the adjustment. Keep
adequate records for both the AMT and
regular tax so that you can figure your
adjustment. See the instructions for
line 16.

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

Line 16—Disposition of
Property
Your AMT gain or loss from the
disposition of property may be different
from your gain or loss for the regular tax.
This is because the property may have a
different adjusted basis for the AMT. 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, Casualties and Thefts;
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),
Capital Gains and Losses.
First figure any ordinary income
adjustment related to (3) above. Then,
refigure Form 4684, Form 4797, and
Schedule D for the AMT, if applicable, by
taking into account any adjustments you
made this year or in previous years that
affect your basis or otherwise result in a
different amount for the AMT.
If you have a capital loss after
refiguring Schedule D for the AMT, apply
the $3,000 capital loss limitation
separately to the AMT loss. Because the
amount of your gains and losses may be
different for the AMT, the amount of any
capital loss carryover also may be
different for the AMT. See the example on
page 4. To figure your AMT capital loss
carryover, fill out an AMT Capital Loss
Carryover Worksheet in the Schedule D
instructions.
For each of the four items listed above,
figure the difference between the amount
included in taxable income for the regular
tax and the amount included in income for
the AMT. Treat the difference as a
negative amount if (a) both the AMT and
regular tax amounts are zero or more and
the AMT amount is less than the regular
tax amount or (b) the AMT amount is a
loss, and the regular tax amount is a
smaller loss or zero or more.

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Instructions for Form 6251

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Enter on line 16 the combined
adjustments for the four items listed on
page 3.
Example. On March 13, 2006, Victor
Ash, whose filing status is single, paid
$20,000 to exercise an incentive stock
option (which was granted to him on
January 2, 2005) to buy 200 shares of
stock worth $200,000. The $180,000
difference between his cost and the value
of the stock at the time he exercised the
option is not taxable for the regular tax.
His regular tax basis in the stock at the
end of 2006 is $20,000. For the AMT,
however, Ash must include the $180,000
as an adjustment on his 2006 Form 6251.
His AMT basis in the stock at the end of
2006 is $200,000.
On January 20, 2007, Ash sold 100 of
the shares for $75,000. Because Ash did
not hold these shares more than 1 year,
that sale is a disqualifying disposition. For
the regular tax, Ash has ordinary income
of $65,000 (proceeds minus his $10,000
basis in the 100 shares). Ash has no
capital gain or loss for the regular tax
resulting from the sale. For the AMT, Ash
has no ordinary income, but has a
short-term capital loss of $25,000
(proceeds minus his $100,000 AMT basis
in the 100 shares).
On April 21, 2007, Ash sold the other
100 shares for $60,000. Because he held
the shares for more than 1 year, the sale
is not a disqualifying disposition. For the
regular tax, Ash has a long-term capital
gain of $50,000 (proceeds minus his
regular tax basis of $10,000). For the
AMT, Ash has a long-term capital loss of
$40,000 (proceeds minus his AMT basis
of $100,000).
Ash has no other sales of stock or
other capital assets for 2007. Ash enters
a total negative adjustment of $118,000
on line 16 of his 2007 Form 6251, figured
as follows:
• Ash figures a negative adjustment of
$65,000 for the difference between the
$65,000 of regular tax ordinary income
and the $0 of AMT ordinary income for
the first sale.
• For the regular tax, Ash has $50,000
capital gain net income reported on
Schedule D for the second sale. For the
AMT, Ash has a $25,000 short-term
capital loss from the first sale, and a
$40,000 long-term capital loss from the
second sale, resulting in a net capital loss
of $65,000 for the AMT. However, only
$3,000 of the $65,000 net capital loss is
allowed for 2007 for the AMT. The
difference between the regular tax
Schedule D gain of $50,000 and the
$3,000 loss allowed for the AMT results in
a $53,000 negative adjustment to include
on line 16.
Ash has an AMT capital loss carryover
from 2007 to 2008 of $62,000, of which
$22,000 is short-term and $40,000 is
long-term. If he has no other Schedule D
transactions for 2008, his adjustment
reported on line 16 of his 2008 Form 6251
would be limited to ($3,000), the amount
of his capital loss limitation for 2008.

Line 17—Post-1986
Depreciation
This section describes when depreciation
must be refigured for the AMT and how to
figure the amount to enter on line 17.
Do not use line 17 for depreciation
related to the following.
• Employee business expenses claimed
on line 21 of Schedule A (Form 1040) or
line 9 of Schedule A (Form 1040NR).
Take this adjustment into account on
line 5.
• Passive activities. Take this adjustment
into account on line 18.
• An activity for which you are not at risk
or income or loss from a partnership or an
S corporation if the basis limitations
apply. Take this adjustment into account
on line 19.
• A tax shelter farm activity. Take this
adjustment into account on line 26.

What Depreciation Must Be
Refigured for the AMT?
Generally, you must refigure depreciation
for the AMT, including depreciation
allocable to inventory costs, for:
• Property placed in service after 1998
that is depreciated for the regular tax
using the 200% declining balance method
(generally 3-, 5-, 7-, and 10-year property
under the modified accelerated cost
recovery system (MACRS), except for
qualified property eligible for the special
depreciation allowance (discussed later
on this page));
• Section 1250 property placed in service
after 1998 that is not depreciated for the
regular tax using the straight line method;
and
• Tangible property placed in service
after 1986 and before 1999. (If the
transitional election was made under
section 203(a)(1)(B) of the Tax Reform
Act of 1986, this rule applies to property
placed in service after July 31, 1986.)

What Depreciation Is Not Refigured
for the AMT?
Do not refigure depreciation for the AMT
for the following.
• Residential rental property placed in
service after 1998.
• Nonresidential real property with a
class life of 27.5 years or more placed in
service after 1998 that is depreciated for
the regular tax using the straight line
method.
• Other section 1250 property placed in
service after 1998 that is depreciated for
the regular tax using the straight line
method.
• Property (other than section 1250
property) placed in service after 1998 that
is depreciated for the regular tax using
the 150% declining balance method or
the straight line method.
• Property for which you elected to use
the alternative depreciation system (ADS)
of section 168(g) for the regular tax.
• Qualified property that is or was eligible
for the special depreciation allowance
under sections 168(k), 168(l) (in the case
of qualified cellulosic biomass ethanol
plant property), 1400L(b) (in the case of
qualified New York Liberty Zone

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property), or 1400N(d) (in the case of
qualified Gulf Opportunity Zone property)
if the depreciable basis of the property for
the AMT is the same as for the regular
tax. The special allowance is deductible
for the AMT, and there also is no
adjustment required for any depreciation
figured on the remaining basis of the
qualified property if the depreciable basis
of the property for the AMT is the same
as for the regular tax. Property for which
an election is in effect to not have the
special allowance apply is not qualified
property. See sections 168(k) for the
definition of qualified property, 168(l) for
the definition of qualified cellulosic
biomass ethanol plant property,
1400L(b)(2) for the definition of qualified
New York Liberty Zone property, and
1400N(d)(2) for the definition of qualified
Gulf Opportunity Zone property.
• Any part of the cost of any property for
which you made the election under
section 179 to treat the cost of the
property as a deductible expense. The
reduction to the depreciable basis of
section 179 property by the amount of the
section 179 expense deduction is the
same for the regular tax and the AMT.
• Motion picture films, videotapes, or
sound recordings.
• Property depreciated under the
unit-of-production method or any other
method not expressed in a term of years.
• Qualified Indian reservation property.
• Qualified revitalization expenditures for
a building for which you elected to claim
the commercial revitalization deduction
under section 1400I.
• A natural gas gathering line placed in
service after April 11, 2005.

How Is Depreciation Refigured for
the AMT?
Property placed in service before 1999.
Refigure depreciation for the AMT using
ADS, with the same convention used for
the regular tax. See the following table for
the method and recovery period to use.
Property Placed in Service Before 1999
IF the property is...

THEN use the...

section 1250 property straight line method
over 40 years.
tangible property
(other than section
1250 property)
depreciated using
straight line method
for the regular tax

straight line method
over the property’s
AMT class life.

any other tangible
property

150% declining
balance method,
switching to straight
line method the first
tax year it gives a
larger deduction, over
the property’s AMT
class life.

Property placed in service after 1998.
Use the same convention and recovery
period used for the regular tax. For
property other than section 1250 property,
use the 150% declining balance method,

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switching to straight line the first tax year
it gives a larger deduction. For section
1250 property, use the straight line
method.

How Is the AMT Class Life
Determined?
The class life used for the AMT is not
necessarily the same as the recovery
period used for the regular tax. The class
lives for the AMT are listed in Rev. Proc.
87-56, 1987-2 C.B. 674, and in Pub. 946,
How To Depreciate Property. Use 12
years for any tangible personal property
not assigned a class life.
See Pub. 946 for tables that may

TIP be used to figure AMT
depreciation. Rev. Proc. 89-15,
1989-1 C.B. 816, has special rules for
short years and for property disposed of
before the end of the recovery period.

How Is the Adjustment Figured?
Subtract the AMT deduction for
depreciation from the regular tax
deduction and enter the result. If the AMT
deduction is more than the regular tax
deduction, enter the difference as a
negative amount.
In addition to the AMT adjustment to
your deduction for depreciation, you must
also adjust the amount of depreciation
that was capitalized, if any, to account for
the difference between the rules for the
regular tax and the AMT. Include on this
line the current year adjustment to taxable
income, if any, resulting from the
difference.

Line 18—Passive Activities
Your passive activity gains and losses
must be refigured for the AMT by taking
into account all adjustments and
preferences and any AMT prior year
unallowed losses that apply to that
activity. You may fill out a second Form
8582, Passive Activity Loss Limitations,
and the other forms or schedules on
which your passive activities are reported,
to determine your passive activity loss
allowed for the AMT, but do not file the
second set of forms and schedules with
your tax return.
Example. You are a partner in a
partnership and the Schedule K-1 (Form
1065) you received shows the following.
• A passive activity loss of $4,125,
• A depreciation adjustment of $500 on
post-1986 property, and
• An adjustment of $225 on the
disposition of property.
Because the two adjustments above
are not allowed for the AMT, you must
first reduce the passive activity loss by
those amounts. The result is a passive
activity loss for the AMT of $3,400. You
then enter this amount on the AMT Form
8582 and refigure the allowable passive
activity loss for the AMT.
The amount of any AMT passive

TIP activity loss that is not deductible
and is carried forward is likely to
differ from the regular tax amount, if any.
Therefore, keep adequate records for
both the AMT and regular tax.

Enter the difference between the
amount that would be reported for the
activity on Schedule C, C-EZ, E, or F or
Form 4835, Farm Rental Income and
Expenses, for the AMT and the regular
tax amount. If (a) the AMT loss is more
than the regular tax loss, (b) the AMT
gain is less than the regular tax gain, or
(c) you have an AMT loss and a regular
tax gain, enter the adjustment as a
negative amount.
Enter any adjustment for amounts
reported on Schedule D, Form 4684, or
Form 4797 for the activity on line 16
instead of line 18. See the instructions for
line 16.

Publicly Traded Partnership (PTP)
If you had a loss from a PTP, refigure the
loss using any AMT adjustments and
preferences and any AMT prior year
unallowed loss.

Tax Shelter Passive Farm
Activities
Refigure any gain or loss from a tax
shelter passive farm activity taking into
account all AMT adjustments and
preferences and any AMT prior year
unallowed losses. If the amount is a gain,
include it on the AMT Form 8582. If the
amount is a loss, do not include it on the
AMT Form 8582. Carry the loss forward
to 2008 to see if you have a gain or loss
from tax shelter passive farm activities for
2008.

Insolvency
If at the end of the tax year your liabilities
exceed the fair market value of your
assets, increase your passive activity loss
allowed by that excess (but not by more
than your total loss). See section 58(c)(1).

Line 19—Loss Limitations
For passive activities, see the line 18
instructions instead. For tax shelter farm
activities (that are not passive), see the
line 26 instructions beginning on page 6.
Refigure your gains and losses from
activities for which you are not at risk and
basis limitations applicable to
partnerships and S corporations by taking
into account all AMT adjustments and
preferences that apply. See sections
59(h), 465, 704(d), and 1366(d).
Enter the difference between the
amount that would be reported for the
activity on Schedule C, C-EZ, E, or F or
Form 4835 for the AMT and the regular
tax amount. If (a) the AMT loss is more
than the regular tax loss, (b) the AMT
gain is less than the regular tax gain, or
(c) you have an AMT loss and a regular
tax gain, enter the adjustment as a
negative amount.
The AMT amount of any gain or loss
from activities for which you are not at risk
is likely to differ from the regular tax
amount. Your AMT basis in partnerships
and S corporations is also likely to differ
from your regular tax basis. Therefore,
keep adequate records for both the AMT
and regular tax.
Enter any adjustment for amounts
reported on Schedule D, Form 4684, or

-5-

Form 4797 for the activity on line 16
instead of line 19.

Line 20—Circulation Costs
Note. Do not make this adjustment for
costs for which you elected the optional
3-year write-off for the regular tax.
Circulation costs (expenditures to
establish, maintain, or increase the
circulation of a newspaper, magazine, or
other periodical) 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.
If you had a loss on property for which
circulation costs have not been fully
amortized for the AMT, your AMT
deduction is the smaller of (a) the amount
of the loss allowable for the costs had
they remained capitalized or (b) the
remaining costs to be amortized for the
AMT.

Line 21—Long-Term Contracts
For the AMT, you generally must use the
percentage-of-completion method
described in section 460(b) to determine
your income from any long-term contract
(defined in section 460(f)). However, this
rule does not apply to any home
construction contract (as defined in
section 460(e)(6)). For contracts excepted
from the percentage-of-completion
method for the regular tax by section
460(e)(1), you must use the simplified
procedures for allocating costs outlined in
section 460(b)(3) to determine the
percentage of completion.
Enter the difference between the AMT
and regular tax income. If the AMT
income is smaller, enter the difference as
a negative amount.
Note. If you are required to use the
percentage-of-completion method for
either the regular tax or the AMT, you
may owe or be entitled to a refund of
interest for the tax year the contract is
completed or adjusted. For details, see
Form 8697, Interest Computation Under
the Look-Back Method for Completed
Long-Term Contracts.

Line 22—Mining Costs
Note. Do not make this adjustment for
costs for which you elected the optional
10-year write-off for the regular tax.
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 you had a loss on property for which
mining costs have not been fully
amortized for the AMT, your AMT
deduction is the smaller of (a) the loss
allowable for the costs had they remained

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capitalized or (b) the remaining costs to
be amortized for the AMT.

Line 23—Research and
Experimental Costs
Note. Do not make this adjustment for
costs paid or incurred in connection with
an activity in which you materially
participated under the passive activity
rules or for costs for which you elected
the optional 10-year write-off for the
regular tax.
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 you had a loss on property for which
research and experimental costs have not
been fully amortized for the AMT, your
AMT deduction is the smaller of (a) the
loss allowable for the costs had they
remained capitalized or (b) the remaining
costs to be amortized for the AMT.

Line 24—Installment Sales
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 the amount of
installment sale income reported for the
regular tax as a negative amount on
line 24.

Line 25—Intangible Drilling
Costs (IDCs)
Note. Do not make this adjustment for
costs for which you elected the optional
60-month write-off for the regular tax.
IDCs 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.
Excess IDCs. Figure excess IDCs as
follows.
Step 1. Determine the amount of your
IDCs allowed for the regular tax under
section 263(c), but do not include any
section 263(c) deduction for
nonproductive wells.
Step 2. Subtract the amount that
would have been allowed had you
amortized these IDCs over a 120-month
period starting with the month the well
was placed in production. If you prefer not
to use the 120-month period, you can
elect to use any method that is
permissible in determining cost depletion.
Net income. Determine net income by
reducing the gross income that you
received or accrued during the tax year
from all oil, gas, and geothermal wells by
the deductions allocable to those wells
(reduced by the excess IDCs). When

refiguring net income, use only income
and deductions allowed for the AMT.
Exception. The preference for IDCs
from oil and gas wells does not apply to
taxpayers who are independent
producers (that is, not integrated oil
companies as defined in section
291(b)(4)). However, this benefit may be
limited. First, figure the IDC preference as
if this exception did not apply. Then, for
purposes of this exception, complete
Form 6251 through line 26, including the
IDC preference, and combine lines 1
through 26. If the amount of the IDC
preference exceeds 40% of the total of
lines 1 through 26, enter the excess on
line 25 (your benefit from this exception is
limited). Otherwise, do not enter an
amount on line 25 (your benefit from this
exception is not limited).

Line 26—Other Adjustments
Enter on line 26 the total of any other
adjustments that apply to you, including
the following.

Depreciation Figured Using
Pre-1987 Rules
This preference generally only applies to
property placed in service after 1987, but
depreciated using pre-1987 rules due to
transitional provisions of the Tax Reform
Act of 1986.
For the AMT, you must use the straight
line method to figure depreciation on real
property for which accelerated
depreciation was determined using
pre-1987 rules. Use a recovery period of
19 years for 19-year real property and 15
years for low-income housing. For leased
personal property other than recovery
property, enter the amount by which your
regular tax depreciation using the
pre-1987 rules exceeds the depreciation
allowable using the straight line method.
For leased 10-year recovery property and
leased 15-year public utility property,
enter the amount by which your regular
tax depreciation exceeds the depreciation
allowable using the straight line method
with a half-year convention, no salvage
value, and a recovery period of 15 years
(22 years for 15-year public utility
property).
Figure the excess of the regular tax
depreciation over the AMT depreciation
separately for each property and include
on line 26 only positive amounts.

Patron’s Adjustment
Distributions you received from a
cooperative may be includible in income.
Unless the distributions are nontaxable,
include on line 26 the total AMT
patronage dividend adjustment reported
to you by the cooperative, such as on
Form 1099-PATR.

Pollution Control Facilities
The section 169 election to amortize the
basis of a certified pollution control facility
over a 60-month or 84-month period is
not available for the AMT. For facilities
placed in service before 1999, figure the
AMT deduction using ADS. For facilities
placed in service after 1998, figure the
AMT deduction under MACRS using the

-6-

straight line method. Enter the difference
between the regular tax and AMT
deduction. If the AMT amount is greater,
enter the difference as a negative
amount.

Tax Shelter Farm Activities
Figure this adjustment only if you have a
gain or loss from a tax shelter farm
activity (as defined in section 58(a)(2))
that is not a passive activity. If the activity
is passive, you must include it with your
other passive activities on line 18.
Refigure all gains and losses you
reported for the regular tax from tax
shelter farm activities by taking into
account any AMT adjustments and
preferences. Determine your tax shelter
farm activity gain or loss for the AMT
using the same rules you used for the
regular tax with the following
modifications. No refigured loss is
allowed, except to the extent you are
insolvent (see section 58(c)(1)). A
refigured loss may not be used in the
current tax year to offset gains from other
tax shelter farm activities. Instead, any
refigured loss must be suspended and
carried forward indefinitely until (a) you
have a gain in a subsequent tax year from
that same activity or (b) you dispose of
the activity.
Enter the difference between the
amount that would be reported for the
activity on Schedule E or F or Form 4835
for the AMT and the regular tax amount. If
(a) the AMT loss is more than the regular
tax loss, (b) the AMT gain is less than the
regular tax gain, or (c) you have an AMT
loss and a regular tax gain, enter the
adjustment as a negative amount.
Enter any adjustment for amounts
reported on Schedule D, Form 4684, or
Form 4797 for the activity on line 16
instead of line 26.

Charitable Contributions of Certain
Property
If you made a charitable contribution of
property to which section 170(e) applies
and you had a different basis for AMT
purposes, you may have to make an
adjustment. See section 170(e) for
details.

Alcohol, Biodiesel, and Renewable
Diesel Fuels Credits
If your taxable income includes an
amount from the alcohol fuel credit or the
biodiesel and renewable diesel fuels
credit under section 87, include that
amount as a negative amount on line 26.

Related Adjustments
If you have an entry on line 8 because
you deducted investment interest
allocable to an interest in a trade or
business, or on line 9, 12, 13, or 15
through 25, or you have any amount
included on line 26 from pre-1987
depreciation, patron’s adjustment,
pollution control facilities, or tax shelter
farm activities, you may have to refigure
any item of income or deduction based on
a limit of income other than AGI or
modified AGI.

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Instructions for Form 6251

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Affected items include the following.

• Section 179 expense deduction (Form

4562, line 12).
• Expenses for business or rental use of
your home.
• Conservation expenses (Schedule F,
line 14).
• Taxable IRA distributions (Form 1040,
line 15b, or Form 1040NR, line 16b), if
prior year IRA deductions were different
for the AMT and the regular tax.
• Self-employed health insurance
deduction (Form 1040, line 29, or Form
1040NR, line 28).
• Self-employed SEP, SIMPLE, and
qualified plans deduction (Form 1040, line
28, or Form 1040NR, line 27).
• IRA deduction (Form 1040, line 32, or
Form 1040NR, line 31), affected by the
earned income limitation of section
219(b)(1)(B).
Figure the difference between the AMT
and regular tax amount for each item.
Combine the amounts for all your related
adjustments and include the total on line
26. Keep a copy of all computations for
your records, including any AMT
carryover and basis amounts.
Do not include on line 26 any
adjustment for an item you
CAUTION refigured on another line of this
form (for example, line 9).
Example. On your Schedule C (Form
1040) you have a net profit of $9,000
before figuring your section 179
deduction. You do not report any other
business income on your return. During
the year, you purchased an asset for
$10,000 for which you elect to take the
section 179 deduction. You also have an
AMT depreciation adjustment of $700 for
other assets depreciated on your
Schedule C.

!

Your section 179 deduction for the
regular tax is limited to your net profit
(before any section 179 deduction) of
$9,000. The $1,000 excess is a section
179 deduction carryforward for the regular
tax.

Exemption Worksheet —Line 29

For the AMT, your net profit is $9,700,
and you are allowed a section 179
deduction of $9,700 for the AMT. You
have a section 179 deduction
carryforward of $300 for the AMT.
You include a $700 negative
adjustment on line 26 because your
section 179 deduction for the AMT is
$700 greater than your allowable regular
tax deduction. In the following year, when
you use the $1,000 regular tax
carryforward, you will have a $700
positive related adjustment for the AMT
because your AMT carryforward is only
$300.

Line 27—Alternative Tax Net
Operating Loss Deduction
(ATNOLD)
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 below.
Figure your ATNOLD as follows.
Your ATNOL for a loss year is the
excess of the deductions allowed for
figuring AMTI (excluding the ATNOLD)
over the income included in AMTI. Figure
this excess with the modifications in
section 172(d), taking into account the
adjustments in sections 56 and 58 and
preferences in section 57 (that is, the
section 172(d) modifications must be
separately figured for the ATNOL). For
example, the limitation of nonbusiness
deductions to the amount of nonbusiness
income must be separately figured for the
ATNOL, using only nonbusiness income
and deductions that are included in AMTI.
Your ATNOLD may be limited. To
figure the ATNOLD limitation, you must
first figure your AMTI without regard to
the ATNOLD and any domestic
production activities deduction. To do this,
first figure a tentative amount for line 9 by
treating line 27 as if it were zero. Next,
figure a tentative total of lines 1 through
26 using the tentative line 9 amount and
Keep for Your Records

Note. If Form 6251, line 28, is equal to or more than: $247,500 if single or head of household; $330,000 if
married filing jointly or qualifying widow(er); or $165,000 if married filing separately; your exemption is zero. Do
not complete this worksheet; instead, enter the amount from Form 6251, line 28, on line 30 and go to line 31.

1. Enter: $33,750 if single or head of household; $45,000 if married filing
jointly or qualifying widow(er); $22,500 if married filing separately . . .
2. Enter your alternative minimum taxable income
(AMTI) from Form 6251, line 28 . . . . . . . . . . . . . 2.
3. Enter: $112,500 if single or head of household;
$150,000 if married filing jointly or qualifying
widow(er); $75,000 if married filing separately . . . 3.
4. Subtract line 3 from line 2. If zero or less, enter -0- 4.
5. Multiply line 4 by 25% (.25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Subtract line 5 from line 1. If zero or less, enter -0-. If this form is for a
child under age 18, go to line 7 below. Otherwise, stop here and
enter this amount on Form 6251, line 29, and go to Form 6251,
line 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Child’s minimum exemption amount . . . . . . . . . . . . . . . . . . . . . . .
8. Enter the child’s earned income, if any (see instructions) . . . . . . . .
9. Add lines 7 and 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Enter the smaller of line 6 or line 9 here and on Form 6251, line 29,
and go to Form 6251, line 30 . . . . . . . . . . . . . . . . . . . . . . . . . . .

.

1.

.

5.

䊳
.
.
.

6.
7.
8.
9.

䊳 10.

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treating line 27 as if it were zero. Add any
domestic production activities deduction
to this tentative total. Your ATNOLD
limitation is 90% of the result.
However, if an ATNOL that is carried
back or carried forward to the tax year is
attributable to qualified Gulf Opportunity
Zone losses as defined in section
1400N(k)(2), the ATNOLD for the tax year
is limited to the sum of:
1. The smaller of:
a. The sum of the ATNOL carrybacks
and carryforwards to the tax year
attributable to net operating losses other
than qualified Gulf Opportunity Zone
losses, or
b. Ninety percent of AMTI for the tax
year (figured without regard to the
ATNOLD and any domestic production
activities deduction, as discussed earlier),
plus
2. The smaller of:
a. The sum of the ATNOL carrybacks
and carryforwards to the tax year
attributable to qualified Gulf Opportunity
Zone losses, or
b. AMTI for the tax year (figured
without regard to the ATNOLD and any
domestic production activities deduction,
as discussed earlier) reduced by the
amount determined under (1), above.
Enter on line 27 the smaller of the
ATNOLD or the ATNOLD limitation.
Any ATNOL not used may be carried
back 2 years or forward up to 20 years
(15 years for loss years beginning before
1998). In some cases, the carryback
period is longer than 2 years; see
sections 172(b) and 1400N(k) for details.
The treatment of ATNOLs does not affect
your regular tax NOL.
Note. If you elected under section
172(b)(3) to forgo the carryback period for
the regular tax, the election also applies
for the AMT.

Line 28—Alternative Minimum
Taxable Income
If your filing status is married filing
separately and line 28 is more than
$165,000, you must include an additional
amount on line 28. If line 28 is $255,000
or more, include an additional $22,500.
Otherwise, include 25% of the excess of
the amount on line 28 over $165,000. For
example, if the amount on line 28 is
$185,000, enter $190,000 instead — the
additional $5,000 is 25% of $20,000
($185,000 minus $165,000).

Special Rule for Holders of a
Residual Interest in a REMIC

$6,300

If you held a residual interest in a real
estate mortgage investment conduit
(REMIC) in 2007, the amount you enter
on line 28 may not be less than the
amount on Schedule E, line 38, column
(c). If the amount in column (c) is larger
than the amount you would otherwise
enter on line 28, enter the amount from
column (c) instead and enter “Sch. Q” on
the dotted line next to line 28.

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Instructions for Form 6251

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Part II—Alternative
Minimum Tax
Line 29—Exemption Amount
If line 28 is more than the amount shown
for your filing status in the middle column
of the chart on line 29, see the worksheet
on page 7 to figure the amount to enter
on line 29.

Child Under Age 18
If this form is for a child under age 18,
complete the worksheet on page 7. A
child under age 18 is a child who was
born after January 1, 1990, does not file a
joint return, and at least one of whose
parents was alive at the end of 2007.
Line 8 of the worksheet. Earned
income includes wages, tips, and other
amounts received for personal services
performed. If the child is engaged as a
sole proprietor or as a partner in a trade
or business in which both personal
services and capital are material
income-producing factors, earned income
also includes a reasonable allowance for
compensation for personal services
rendered by the child, but not more than
30% of his or her share of the net profits
from that trade or business (after
subtracting the deduction for one-half of
self-employment tax). However, the 30%
limit does not apply if there are no net
profits from the trade or business. If
capital is not an income-producing factor
and the child’s personal services
produced the business income, all of the
child’s gross income from the trade or
business is considered earned income.

Line 31
If you claimed the foreign earned income
exclusion or the housing exclusion on
Form 2555 or Form 2555-EZ, you must
use the worksheet below to figure the
amount to enter on line 31.

Form 1040NR. If you are filing Form
1040NR and you reported capital gain
distributions directly on Form 1040NR,
line 14; you reported qualified dividends
on Form 1040NR, line 10b; or you had a
gain on both lines 15 and 16 of Schedule
D (Form 1040) (as refigured for the AMT,
if necessary), complete Part III on page 2
of Form 6251 and enter the amount from
line 55 on line 31. Otherwise, do not
complete Part III. Instead, if Form 6251,
line 30, is $175,000 or less ($87,500 or
less if you checked filing status box 3, 4,
or 5 on Form 1040NR), figure the amount
to enter on line 31 by multiplying line 30
by 26% (.26). Otherwise, figure the
amount to enter on line 31 by multiplying
line 30 by 28% (.28) and subtracting
$3,500 ($1,750 if you checked filing
status box 3, 4, or 5) from the result.

Line 32—Alternative Minimum
Tax Foreign Tax Credit
(AMTFTC)
To see if you need to figure your

TIP AMTFTC, fill in Form 6251, line
34, as instructed. (You will first
need to figure your foreign tax credit for
the regular tax and complete Form 1040,
line 51, or Form 1040NR, line 46.) If the
amount on line 34 is greater than or equal
to the amount on line 31, you do not owe
the AMT. Enter -0- on line 35 and see
Who Must File on page 1 to find out if you
must attach Form 6251 to your return.
However, even if you do not owe the
AMT, you may need to complete line 32
to see if you have an AMTFTC carryback
or carryforward to other tax years.
If you made an election to claim the
foreign tax credit on Form 1040 (or Form
1040NR) without filing Form 1116, your
AMTFTC is the same as the foreign tax
credit on Form 1040, line 51 (or Form
1040NR, line 46). Enter that amount on
Form 6251, line 32. Otherwise, your

AMTFTC is your foreign tax credit
refigured as follows.
Step 1. Use a separate AMT Form 1116
for each separate category of income
specified at the top of Form 1116. Write
“AMT” in the top margin of each
Form 1116.
When applying the separate
categories of income, use the applicable
AMT rate instead of the regular tax rate to
determine if any income is “high-taxed.”
Step 2. If you previously made or are
making the simplified limitation election
(see page 9), skip Part I and enter on the
AMT Form 1116, line 16, the same
amount you entered on that line for the
regular tax. If you did not complete Form
1116 for the regular tax and you
previously made or are making the
simplified limitation election, complete
Part I and lines 14 through 16 of the AMT
Form 1116 using regular tax amounts.
If the election does not apply,
complete Part I using only income and
deductions that are allowed for the AMT
and attributable to sources outside the
United States. If you have any foreign
source qualified dividends or foreign
source capital gains (including any foreign
source capital gain distributions) or
losses, use the instructions under Step 3
to determine whether you must make
adjustments to those amounts before you
include the amounts on line 1a or line 5 of
the AMT Form 1116.
Step 3. Follow the instructions below, if
applicable, to determine the amount of
foreign source qualified dividends, capital
gain distributions, and other capital gains
and losses to include on line 1a and line 5
of the AMT Form 1116.
Foreign qualified dividends. You
must adjust your foreign source qualified
dividends before you include those
amounts on line 1a of the AMT Form
1116 if:
Keep for Your
Records

Foreign Earned Income Tax Worksheet —Line 31
1.
2.
3.
4.
5.
6.
7.
8.

9.
10.

Enter the amount from Form 6251, line 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.
Enter the amount from Form 6251, line 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
Subtract line 2 from line 1. If less than zero, enter as a negative amount . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
Enter the amount from your (and your spouse’s if filing jointly) Form 2555, line 45, or Form
2555-EZ, line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
Enter the total amount of any itemized deductions you could not claim because they are related
to excluded income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.
Subtract line 5 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
Combine lines 3 and 6. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
Tax on amount on line 7.
• If you reported capital gain distributions directly on Form 1040, line 13; you reported qualified dividends on
Form 1040, line 9b; or you had a gain on both lines 15 and 16 of Schedule D (Form 1040) (as refigured for the
AMT, if necessary), enter the amount from line 7 of this worksheet on Form 6251, line 36. Then complete the
8.
rest of Part III of Form 6251 and enter the amount from line 55 here.
• All others: If line 7 is $175,000 or less ($87,500 or less if married filing separately), multiply line 7 by 26%
(.26). Otherwise, multiply line 7 by 28% (.28) and subtract $3,500 ($1,750 if married filing separately) from the
result. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on amount on line 6. If line 6 is $175,000 or less ($87,500 or less if married filing separately), multiply line 6 by 26%
(.26). Otherwise, multiply line 6 by 28% (.28) and subtract $3,500 ($1,750 if married filing separately) from the result . . . . . 9.
Subtract line 9 from line 8. Enter here and on Form 6251, line 31. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . 10.

}

-8-

Page 9 of 10

Instructions for Form 6251

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• Line 53 of Form 6251 is smaller than

line 54, and
• Line 41 of Form 6251 is greater than
zero.
But you do not need to make any
adjustments if:
• You qualify for the adjustment
exception under Qualified Dividends and
Capital Gain Tax Worksheet (Individuals)
or Adjustments to foreign qualified
dividends under Schedule D Filers in the
Form 1116 instructions, and
• Line 41 of Form 6251 is not more than
$175,000 ($87,500 if married filing
separately).
Note. Use your capital gains and losses
as refigured for the AMT to determine
whether your total amounts are less than
the $20,000 threshold under the
adjustment exception.
To adjust your foreign source qualified
dividends, multiply your foreign source
qualified dividends in each separate
category by 0.5357. Include the results on
line 1a of the applicable AMT Form 1116.
But do not adjust the amount of any
foreign source qualified dividend you
elected to include on line 4g of AMT
Form 4952.
Individuals with capital gain
distributions only. If you have no
capital gains or losses other than capital
gain distributions from box 2a of Form(s)
1099-DIV or substitute statement(s), you
must adjust your foreign source capital
gain distributions if you are required to
adjust your foreign source qualified
dividends under the rules just described
or you would be required to adjust your
foreign source qualified dividends if you
had any.
To adjust your foreign source capital
gain distributions, multiply your foreign
source capital gain distributions in each
separate category by 0.5357. Include the
results on line 1a of the applicable AMT
Form 1116. But do not adjust the amount
of any foreign source capital gain
distribution you elected to include on line
4g of AMT Form 4952.
Individuals with other capital gains
or losses. If any capital gain or loss is
different for the AMT, use amounts as
refigured for the AMT to complete this
step. Use Worksheet A in the instructions
for Form 1116 to determine the
adjustments you must make to your
foreign source capital gains or losses (as
refigured for the AMT) if you have foreign
source capital gains or losses (as
refigured for the AMT) in no more than
two separate categories and any of the
following apply.
• You are not required to make
adjustments to your foreign source
qualified dividends under the rules
described earlier (or you would not be
required to make those adjustments if you
had foreign source qualified dividends).
• Line 15 or 16 of the AMT Schedule D
(Form 1040) is zero or a loss.
• The amount on line 3 of the AMT
Qualified Dividends and Capital Gain Tax
Worksheet (or line 7 of the AMT Schedule
D Tax Worksheet) minus the amount on

Form 4952, line 4e, that you elected to
include on Form 4952, line 4g, is zero or
less.
Use Worksheet B if you:

• Cannot use Worksheet A,
• Have foreign source capital gains and

losses in no more than two separate
categories, and
• Did not have any item of unrecaptured
section 1250 gain or 28% rate gain or
loss for the AMT.
Instructions for Worksheets A and
B. When you complete Worksheet A or
Worksheet B, use foreign source capital
gains and losses, as refigured for the
AMT if necessary, and do not use any
foreign source capital gains you elected
to include on line 4g of AMT Form 4952. If
you are required to complete a Schedule
D for the AMT, use line 16 of that AMT
Schedule D to complete line 3 of
Worksheet A or line 4 of the Line 2
Worksheet for Worksheet B. Use 0.5357
instead of 0.4286 to complete lines 11,
13, and 15 of Worksheet B and to
complete lines 8, 11, and 17 of the Line
15 Worksheet for Worksheet B.
If you do not qualify to use Worksheet
A or Worksheet B, use the instructions for
Capital Gains and Losses in Pub. 514 to
determine the adjustments you make.
Step 4. Complete Part II and lines 9
through 13 of the AMT Form 1116. Use
your AMTFTC carryover, if any, on
line 10.
Step 5. If the simplified limitation election
does not apply, complete lines 14 through
16 of the AMT Form 1116.
Step 6. If you did not complete Part III of
Form 6251, enter the amount from line 28
of Form 6251 on line 17 of the AMT Form
1116 and go to Step 7 on this page. If you
completed Part III of Form 6251, you
must complete, for the AMT, the
Worksheet for Line 17 in the Form 1116
instructions to determine the amount to
enter on line 17 of the AMT Form 1116 if:
• Line 53 of Form 6251 is smaller than
line 54, and
• Line 41 of Form 6251 is greater than
zero.
But you do not need to complete the
Worksheet for Line 17 if:
• You qualify for the adjustment
exception under Qualified Dividends and
Capital Gain Tax Worksheet (Individuals)
or Adjustments to foreign qualified
dividends under Schedule D Filers in the
Form 1116 instructions, and
• Line 41 of Form 6251 is not more than
$175,000 ($87,500 if married filing
separately).
Note. Use your capital gains and losses
as refigured for the AMT to determine
whether your total amounts are less than
the $20,000 threshold under the
adjustment exception.
If you do not need to complete the
Worksheet for Line 17, enter the amount
from line 28 of Form 6251 on line 17 of
the AMT Form 1116.

-9-

Instructions for AMT Worksheet for
Line 17. Follow these steps to complete,
for the AMT, the Worksheet for Line 17 in
the Form 1116 instructions.
1. Enter the amount from Form 6251,
line 28, on line 1 of the worksheet.
2. Skip lines 2 and 3 of the worksheet.
3. Enter the amount from Form 6251,
line 51, on line 4 of the worksheet.
4. Multiply line 4 of the worksheet by
0.1071 (instead of 0.2857). Enter the
result on line 5 of the worksheet.
5. Enter the amount from Form 6251,
line 49, on line 6 of the worksheet.
6. Multiply line 6 of the worksheet by
0.4643 (instead of 0.5714). Enter the
result on line 7 of the worksheet.
7. Complete lines 8 and 9 of the
worksheet as instructed on the
worksheet.
Step 7. Enter the amount from Form
6251, line 31, on the AMT Form 1116,
line 19. Complete lines 18, 20, and 21 of
the AMT Form 1116.
Step 8. Complete Part IV of the first
AMT Form 1116 only.
Enter on Form 6251, line 32, the
amount from line 29 of the first AMT
Form 1116.
Attach to your tax return, after Form
6251, all AMT Forms 1116 you used to
figure your AMTFTC. But do not attach
AMT Forms 1116 if your AMTFTC is the
same as your regular tax foreign tax
credit.

AMTFTC Carryback and
Carryforward
If your AMTFTC is limited, the unused
amount generally may be carried back or
forward according to section 904(c).
However, if you made the election to
claim the foreign tax credit on Form 1040
(or Form 1040NR) without filing Form
1116, any unused AMTFTC cannot be
carried back or forward. In addition, no
unused AMTFTC from another year can
be used in any year for which the election
has been made.

Simplified Limitation Election
You may elect to use a simplified section
904 limitation to figure your AMTFTC. If
you do, use your regular tax income for
Form 1116, Part I, instead of refiguring
your foreign source income for the AMT,
as described earlier. You must make the
election for the first tax year after 1997 for
which you claim an AMTFTC. If you do
not make the election for that year, you
may not make it for a later year. Once
made, the election applies to all later tax
years and may be revoked only with IRS
consent.

Line 34
If you used Schedule J to figure your tax
on Form 1040, line 44 (or Form 1040NR,
line 41), you must refigure that tax
(including any tax from Form 8814)
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).

Page 10 of 10

Instructions for Form 6251

10:04 - 6-JUL-2007

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Form 1040NR. If you are filing Form
1040NR, enter the tax from Form
1040NR, line 41 (minus any tax from
Form 4972 and any foreign tax credit from
Form 1040NR, line 46). If you used
Schedule J to figure your tax, the amount
on line 41 of Form 1040NR must be
refigured without using Schedule J (see
preceding paragraph).

Part III—Tax Computation
Using Maximum Capital
Gains Rates
Lines 37, 38, and 39
You generally 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 (Form 1040), if you
completed Schedule D. But do not use
those amounts if any of the following
statements apply.
1. Any gain or loss on Schedule D is
different for the AMT (for example,
because of a different basis for the AMT
due to depreciation adjustments, an
incentive stock option adjustment, or a
different AMT capital loss carryover from
2006).
2. You did not complete either the
Qualified Dividends and Capital Gain Tax
Worksheet or the Schedule D Tax
Worksheet because Form 1040, line 43
(or Form 1040NR, line 40), is zero.
3. You received a Schedule K-1
(Form 1041) that shows an amount in box
12 with code B, C, D, E, or F. If this
applies, see Beneficiaries of estates or
trusts on this page. Then read the
following instructions.
If (1) or (3) above applies, complete
lines 1 through 20 of an AMT Schedule D
by refiguring the amounts of your gains
and losses for the AMT. Next, if (1), (2),
or (3) above applies, complete lines 2
through 6 of an AMT Qualified Dividends
and Capital Gain Tax Worksheet or lines
2 through 13 of an AMT Schedule D Tax
Worksheet, whichever applies. (See line
20 of your AMT Schedule D, if you
completed one, to determine which
worksheet applies.) Complete line 5 of the
AMT Qualified Dividends and Capital
Gain Tax Worksheet or lines 3 and 4 of
the AMT Schedule D Tax Worksheet,
whichever applies, using your AMT Form
4952. Use amounts from Schedule D or
the AMT Schedule D, whichever applies,
and either the AMT Qualified Dividends
and Capital Gain Tax Worksheet or the
AMT Schedule D Tax Worksheet,

whichever applies, to complete lines 37,
38, and 39 of Form 6251. Keep the AMT
Schedule D and applicable worksheet for
your records, but do not attach the AMT
Schedule D to your tax return.
Note. Do not decrease your section
1202 exclusion by the amount, if any, on
line 12.
Beneficiaries of estates or trusts. If
you received a Schedule K-1 (Form 1041)
that shows an adjustment in box 12,
follow the instructions in the following
table.
IF the code in
box 12 is...
B

THEN include that
adjustment in figuring the
amount on...
line 2 of an AMT Qualified
Dividends and Capital Gain
Tax Worksheet or an AMT
Schedule D Tax
Worksheet, whichever
applies.

C

line 5, column (f), of an
AMT Schedule D.

D

line 12, column (f), of an
AMT Schedule D.

E

line 11 of an AMT
Unrecaptured Section 1250
Gain Worksheet.

F

line 4 of an AMT 28% Rate
Gain Worksheet.

Form 1040NR. If you are filing Form
1040NR, enter on Form 6251, line 37, the
amount from line 4 of the Qualified
Dividends and Capital Gain Tax
Worksheet in the instructions for Form
1040NR, line 41, or the amount from line
13 of the Schedule D Tax Worksheet on
page D-10 of the instructions for
Schedule D (Form 1040), whichever
applies (as refigured for the AMT, if
necessary).

Line 42
If you are filing Form 1040NR and Form
6251, line 41, is $175,000 or less
($87,500 or less if you checked filing
status box 3, 4, or 5), multiply line 41 by
26% (.26). Otherwise, multiply line 41 by
28% (.28) and subtract $3,500 ($1,750 if
you checked filing status box 3, 4, or 5)
from the result.

Line 43
If you are filing Form 1040NR, enter
$31,850 ($63,700 if you checked filing
status box 6).

Line 44
If you are filing Form 1040NR, enter on
Form 6251, line 44, the amount from line

-10-

5 of the Qualified Dividends and Capital
Gain Tax Worksheet in the instructions for
Form 1040NR, line 41, or the amount
from line 14 of the Schedule D Tax
Worksheet on page D-10 of the
instructions for Schedule D (Form 1040),
whichever applies (as figured for the
regular tax). If you did not complete either
worksheet for the regular tax, enter -0-.

Line 54
If you are filing Form 1040NR and Form
6251, line 36, is $175,000 or less
($87,500 or less if you checked filing
status box 3, 4, or 5), multiply line 36 by
26% (.26). Otherwise, multiply line 36 by
28% (.28) and subtract $3,500 ($1,750 if
you checked filing status box 3, 4, or 5)
from the result.

Line 55
If you are filing Form 2555 or Form
2555-EZ, do not enter the amount from
Form 6251, line 55, on Form 6251, line
31. Instead, enter the amount from Form
6251, line 55, on line 8 of the worksheet
on page 8. Then complete the rest of that
worksheet to figure the amount to enter
on Form 6251, line 31.
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.
The average time and expenses
required to complete and file this form will
vary depending on individual
circumstances. For the estimated
averages, see the instructions for your
income tax return.
If you have suggestions for making this
form simpler, we would be happy to hear
from you. See the instructions for your
income tax return.