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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

My client has an AMT passive farm loss, but none is reported on Form 6251, line 2m or the worksheet. Why is the regular passive farm loss reported but not the AMT loss?

Answer

UltraTax CS treats passive farm activities as tax shelter passive farm activities. A tax shelter farm activity is defined as any farm syndicate as defined by section 464(c), and any other activity consisting of farming which is a passive activity (within the meaning of section 469(c)). Code section 469(c) defines passive activities as "any activity which involves the conduct of any trade or business, and in which the taxpayer does not materially participate." Therefore, all Form 4835s, any Schedule F with a passive activity code 1 = Other passive activity, and any Schedule K1s with Farming activity marked and a passive activity code of 1 (Other passive) or 2 (Rental real estate w/active participation) are treated as tax shelter passive farm activities.

The tax application recalculates any gain or loss from such passive activities by taking into account all AMT adjustments and preferences and any AMT prior-year unallowed losses. If the amount is a gain, it is included in AMT calculation. If the amount is a loss, it is not included in AMT income. Calculated AMT losses will be carried forward. This is in accordance with Form 6251 instructions.

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