Table of Contents
The following changes to the alternative minimum tax (AMT) apply for 2008.
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The exemption amount has increased to $46,200 ($69,950 if married filing jointly or qualifying widow(er); $34,975 if married filing separately).
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The exemption amount is now limited for certain children under age 24. (Before 2008, the limit applied to children under age 18.) The minimum exemption amount for a child has increased to $6,400.
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The interest on certain qualified mortgage bonds, qualified veterans' mortgage bonds, and bonds related to residential rental projects is not a tax preference item if the bonds were issued after July 30, 2008. Do not include it on line 12. For details, see section 57(a)(5)(C)(iii).
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No AMT adjustment is required for depreciation of qualified disaster assistance property that is eligible for the special depreciation allowance. See the instructions for line 18 that begin on page 4.
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The 90% limit on the alternative tax net operating loss deduction (ATNOLD) does not apply to the portion of an ATNOLD attributable to qualified disaster losses. See the instructions for line 28 on page 8.
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If you claimed the standard deduction for the regular tax and it includes a net disaster loss attributable to a federally declared disaster, that net disaster loss is also allowable as a deduction for the AMT. See the instructions for line 7 on page 3.
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The following benefits apply in the Kansas disaster area. (For a complete discussion of the temporary tax relief available, see Publication 4492-A, Information for Taxpayers Affected by the May 4, 2007, Kansas Storms and Tornadoes.)
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No AMT adjustment is required for depreciation of qualified recovery assistance property that is eligible for the special depreciation allowance. See the instructions for line 18 that begin on page 4.
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The 90% limit on the alternative tax net operating loss deduction (ATNOLD) does not apply to the portion of an ATNOLD attributable to qualified recovery assistance losses. See the instructions for line 28 on page 8.
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The following benefits apply in the Midwestern disaster areas. (For a complete discussion of the temporary tax relief available, see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas.)
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The exemption amount on Form 8914 that is allowable for the regular tax if you provided housing for a person displaced by the Midwestern severe storms, tornadoes, and flooding is also allowable for the AMT.
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The interest on qualified Midwestern disaster area bonds is not a tax preference item. Do not include it on line 12. See page 3.
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The 90% limit on the alternative tax net operating loss deduction (ATNOLD) does not apply to the portion of an ATNOLD attributable to qualified disaster recovery assistance losses. See the instructions for line 28 on page 8.
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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 next.
Attach Form 6251 to your return if any of the following statements is true.
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Form 6251, line 32, is greater than line 35.
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You claim any general business credit on Form 3800, Part I; the empowerment zone and renewal community employment 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.
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The total of Form 6251, lines 9 through 28, is negative and line 32 would be greater than line 35 if you did not take into account lines 9 through 28.
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 33 that begin on page 9.
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.
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.
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 31. If your net gain from the disposition of U.S. real property interests and the amount on line 29 are both greater than the tentative amount you figured for line 31, replace the amount on line 31 with the smaller of that net gain or the amount on line 29. Also, enter “RPI” on the dotted line next to line 31. Otherwise, do not change line 31.
See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts, if you paid AMT for 2007 or you had a minimum tax credit carryforward on your 2007 Form 8801. If you pay AMT for 2008, you may be able to take a credit on Form 8801 for 2009.
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.
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Circulation expenditures—3 years (section 173).
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Research and experimental expenditures—10 years (section 174(a)).
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Mining exploration and development costs—10 years (sections 616(a) and 617(a)).
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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.
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