1040-US: Form 6251, lines 17, 18, 19, 20 calculation

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Question

I am not sure how lines 17, 18, 19, and 20 calculate on Form 6251. Does the application provide detail for these amounts?

Answer

AMT versions of Schedule D, Form 4797, and Form 6252 are printed with the return. The Form 6251, line 17 Worksheet calculates the difference between AMT and Regular tax gain or loss and reports it on Form 6251. The worksheet is located on the AMT Disposition of Property Exemption worksheets located in the 6251Wrk folder.

All AMT forms are located in the same folder as the regular version of the form. For example, AMT Schedule D is located in the D folder, AMT 4797 is located in the 4797 folder, etc. 

Only the post-1986 depreciation adjustment from nonpassive activities is reported on line 18. The adjustment for passive activities is used in the Line 19 calculation.

Form 6251, Passive Activities and Loss Limitations Adjustment Worksheet, is printed to detail Form 6251, lines 19 and 20. In addition, the K1 Reconciliation - AMT Worksheet provides detail on the loss limitation adjustments made to each pass-through entity.

The application follows Form 6251 instructions and enters any adjustments for amounts reported on Form 8949, Schedule D or Form 4797 for passive and loss limitation activities on line 17 instead of line 19.

Basis, at-risk, and excess farm loss limitations applicable to activities are recalculated taking into account AMT adjustment and preference items like depreciation, installment sales, long-term contracts, mining costs, patron's adjustment, and depletion. The application calculates the difference between the allowable regular tax and AMT amounts for operating income, rental real estate, other rental, other portfolio losses, other Schedule E losses, and other Form 1040, Page 1 losses. If the AMT loss is more than the regular tax loss, or the AMT gain is less than the regular tax gain, or there is an AMT loss and regular tax gain,  line 20 is reported as a negative amount. Adjustments for Schedule D, Form 4684, or Form 4797 amount are reported on Form 6251, line 17, Adjusted gain or loss. Force the amount on line 20 for loss limitations in Screen AMT in the Loss limits (Force) field, if necessary. Form 6251, Passive Activities and Loss Limitations Adjustment Worksheet provides a breakdown of each activity's adjustments. Also, see the K1 Reconciliation - AMT Worksheet for a breakdown of an individual activity.

Related topic: Form 6251 - Alternative minimum tax FAQs (1040)

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