Instructions for Schedule I (Form 1041) Alternative Minimum Tax Estates and Trusts

Transcription

1 2009 Instructions for Schedule I (Form 1041) Alternative Minimum Tax Estates and Trusts Department of the Treasury Internal Revenue Service Section references are to the Internal deduction (NOLD), a capital loss, and Circulation expenditures 3 years Revenue Code unless otherwise noted. the foreign tax credit. Because these (section 173). items may be refigured for the AMT, the Research and experimental carryback or carryforward amount may expenditures 10 years (section 174). General Instructions be different for regular and AMT Intangible drilling costs 60 months What s New Interest on private activity bonds issued in 2009 or 2010 is not a tax preference item. See the line 8 instructions. Purpose of Schedule Use Schedule I (Form 1041) to compute: The estate s or trust s alternative minimum taxable income; The income distribution deduction on a minimum tax basis; and The estate s or trust s AMT. Who Must Complete Schedule I (Form 1041) purposes. Therefore, you should keep records of these different carryforward and carryback amounts for the AMT and regular tax. The AMT carryforward will be important in completing Schedule I for Credit for Prior Year Minimum Tax Estates and trusts that paid AMT in 2008, or had a minimum tax credit carryforward from the 2008 Form 8801, Credit for Prior Year Minimum Tax Individuals, Estates, and Trusts, may be eligible for a minimum tax credit in See Form Partners and Shareholders (section 263(c)). Mining exploration and development costs 10 years (sections 616(a) and 617(a)). The election must be made in the year the expenditure was made and may be revoked only with IRS consent. See section 59(e) and Regulations section for more details. Specific Instructions Part I Estate s or Trust s Share of Alternative Minimum Taxable Income Complete Parts I and II if the estate An estate or trust that is a partner in a or trust is required to complete Form partnership or a shareholder in an S 1041, Schedule B, Income Distribution corporation must take into account its Deduction. share of items of income and Line 2 Interest Complete Schedule I if the estate s or deductions that enter into the computation of its adjustments and tax In determining the alternative minimum trust s share of alternative minimum preference items. taxable income, qualified residence taxable income (Part I, line 29) exceeds interest (other than qualified housing $22,500. interest defined in section 56(e)) is not Complete Schedule I if the estate or Allocation of Deductions to allowed. trust claims a credit on line 2d of Form Beneficiaries 1041, Schedule G; Part I of Form 3800; The distributable net alternative If you completed Form 4952, Form 8844; or Form minimum taxable income (DNAMTI) of Investment Interest Expense the estate or trust does not include Deduction, for regular tax purposes, Recordkeeping amounts of depreciation, depletion, and you may have an adjustment on this Schedule I contains adjustments and amortization that are allocated to the line. Refigure your investment interest tax preference items that are treated beneficiaries, just as the distributable expense on a separate AMT Form differently for regular tax and AMT net income of the estate or trust does 4952 as follows. purposes. If you, as fiduciary for the not include these items for regular tax Step 1. On line 1 of the AMT Form estate or trust, completed a form to purposes. 4952, follow the instructions for that figure an item for regular tax purposes, line, but also include the following you may have to complete it a second Report separately in box 12 of Schedule K-1 (Form 1041) any amounts. time for AMT purposes. Generally, the adjustments or tax preference items Any qualified residence interest difference between the amounts on the attributable to depreciation (code G), (other than qualified housing interest) two forms is the AMT adjustment or tax depletion (code H), and amortization that was paid or accrued on a loan or preference item to enter on Schedule I. (code I) that were allocated to the part of a loan that is allocable to Except for Form 1116, Foreign Tax beneficiaries. property held for investment as defined Credit, any additional form completed in section 163(d)(5) (for example, for AMT purposes does not have to be Optional Write-Off for Certain interest on a home equity loan whose filed with Form proceeds were invested in stocks or For regular tax purposes, some Expenditures bonds). deductions and credits may result in There is no AMT adjustment for the Any interest that would have been carrybacks or carryforwards to other tax following items if the estate or trust deductible if interest on specified years. Examples are investment elects to deduct them ratably over the private activity bonds had been interest expense, a net operating loss period of time shown for the regular tax. included in income. See the instructions Cat. No W

2 for line 8 for the definition of specified basis (other than the current year s estate or trust must generally include private activity bonds. depletion). on line 10 the excess, if any, of: Step 2. On line 2, enter the AMT Enter on line 6 the difference 1. The fair market value (FMV) of disallowed investment interest expense between the regular tax and AMT the stock acquired through exercise of from deduction. If the AMT deduction is the option (determined without regard Step 3. When completing Part II of the more than the regular tax deduction, to any lapse restriction) when its rights AMT Form 4952, refigure gross income enter the difference as a negative in the acquired stock first become from property held for investment, any amount. transferable or when these rights are net gain from the disposition of property no longer subject to a substantial risk of Line 7 Net Operating Loss held for investment, net capital gain forfeiture, over from the disposition of property held for Deduction 2. The amount paid for the stock, investment, and any investment Enter any NOLD from line 15a of page including any amount paid for the expenses, taking into account all AMT 1 of the Form 1041 as a positive option used to acquire the stock. adjustments and tax preference items amount. that apply. Include any interest income Even if the estate s or trust s and investment expenses from private Line 8 Interest From TIP rights in the stock are not activity bonds issued after August 7, Specified Private Activity transferable and are subject to a substantial risk of forfeiture, you may Bonds Exempt From the elect to include in AMT income the When completing line 4g of the AMT Regular Tax excess of the stock s FMV (determined Form 4952, enter the smaller of: Enter the interest earned from specified without regard to any lapse restriction) The amount from line 4g of the private activity bonds reduced (but not over the exercise price upon the regular tax Form 4952, or below zero) by any deduction that transfer to the estate or trust of the The total of lines 4b and 4e of the would have been allowable if the stock acquired through exercise of the AMT Form interest were includible in gross income option. See section 83(b) for more Step 4. Complete Part III. for regular tax purposes. Each payer of details. The election must be made no Enter on Schedule I, line 2 the this type of interest should send a Form later than 30 days after the date of difference between line 8 of the AMT 1099-INT, Interest Income, to the estate transfer. Form 4952 and line 8 of the regular tax or trust showing the amount of this If the estate or trust acquired stock Form If the AMT deduction is interest in box 9. Generally, specified by exercising an option and it disposed greater, enter the difference as a private activity bonds are any qualified of that stock in the same year, the tax negative amount. bonds (as defined in section 141) treatment under the regular tax and the issued after August 7, 1986, and before AMT is the same, and no adjustment is Line 3 Taxes 2009, the interest on which is not required. Enter any state, local, or foreign real includible in gross income for the Increase the AMT basis of any stock property taxes; state or local personal regular tax. See section 57(a)(5) for acquired through the exercise of an property taxes; any state sales tax; and more information. incentive stock option by the amount of any state, local, or foreign income taxes Do not include interest on qualified the adjustment. that were included on Form 1041, page Gulf Opportunity Zone bonds described 1, line 11. in section 1400N(a) or qualified Line 11 Other Estates and Midwestern disaster area bonds. Trusts Do not include any new motor TIP vehicle taxes. Exempt-interest dividends paid by a If the estate or trust is the beneficiary of regulated investment company are another estate or trust, enter the treated as interest from specified adjustment for minimum tax purposes Line 5 Refund of Taxes private activity bonds to the extent the from box 12, code A, Schedule K-1 dividends are attributable to interest on (Form 1041). Enter any refunds received in 2009 of the bonds received by the company, taxes described for line 3 above and minus an allocable share of the Line 12 Electing Large included in income. expenses paid or incurred by the Partnerships Line 6 Depletion company in earning the interest. This If the estate or trust is a partner in an amount should also be reported to the electing large partnership, enter on line Refigure the depletion deduction for estate or trust on Form 1099-INT in box 12 the amount from Schedule K-1 AMT purposes by using only the 9. (Form 1065-B), box 6. Take into income and deductions allowed for the account any amount from Schedule K-1 AMT when refiguring the limit based on Line 9 Qualified Small (Form 1065-B), box 5, when figuring the taxable income from the property under Business Stock amount to enter on line 15. section 613(a) and the limit based on taxable income, with certain If the estate or trust claimed the exclusion under section 1202 for gain Line 13 Disposition of adjustments, under section 613A(d)(1). on qualified small business stock held Property Also, the depletion deduction for mines, wells, and other natural deposits under more than 5 years, multiply the Use this line to report any AMT section 611 is limited to the property s excluded gain (as shown on Schedule adjustment related to the disposition of adjusted basis at the end of the year, D (Form 1041)) by 7% (.07). Enter the property resulting from refiguring: as refigured for the AMT, unless the result on line 9 as a positive amount. 1. Gain or loss from the sale, estate or trust is an independent Line 10 Exercise of exchange, or involuntary conversion of producer or royalty owner claiming property reported on Form 4797, Sales percentage depletion for oil and gas Incentive Stock Options of Business Property; wells. Figure this limit separately for For regular tax purposes, no income is 2. Casualty gain or loss to business each property. When refiguring the recognized when an incentive stock or income-producing property reported property s adjusted basis, take into option (as defined in section 422(b)) is on Form 4684, Casualties and Thefts; account any AMT adjustments made exercised. However, this rule does not 3. Ordinary income from the this year or in previous years that affect apply for AMT purposes. Instead, the disposition of property not taken into -2-

3 account in 1 or 2 above or on any other depreciated for the regular tax using How is depreciation refigured for the line on Schedule I, such as a the straight line method, and AMT? disqualifying disposition of stock Tangible property placed in service Property placed in service before acquired in a prior year by exercising after 1986 and before If the Refigure depreciation for the an incentive stock option; and transitional election was made under AMT using ADS with the same 4. Capital gain or loss (including any section 203(a)(1)(B) of the Tax Reform convention used for the regular tax. carryover that is different for the AMT) Act of 1986, this rule applies to property See the table below for the method and reported on Schedule D (Form 1041). placed in service after July 31, recovery period to use. The $3,000 capital loss What depreciation is not refigured limitation for the regular tax Property Placed in Service Before 1999! for the AMT? Do not refigure CAUTION applies separately for the AMT. depreciation for the AMT for the IF the property is... THEN use the... First, figure any ordinary income following items. Section 1250 Straight line method adjustment related to 3 above. Then, Residential rental property placed in property. over 40 years. refigure Form 4684, Form 4797, and service after Schedule D for the AMT, if applicable, Nonresidential real property with a Tangible property Straight line method by taking into account any adjustments class life of 27.5 years or more placed (other than section over the property s 1250 property) AMT class life. you made this year or in previous years in service after 1998 that is depreciated depreciated using that affect the estate s or trust s basis for the regular tax using the straight line straight line for the or otherwise result in a different amount method. regular tax. for AMT. If the estate or trust has a Other section 1250 property placed capital loss after refiguring Schedule D in service after 1998 that is depreciated Any other tangible 150% declining for the AMT, apply the $3,000 capital for the regular tax using the straight line property. balance method, loss limitation separately to the AMT switching to straight method. loss. For each of the four items listed line the first tax year Property (other than section 1250 above, figure the difference between it gives a larger property) placed in service after 1998 the amount included in taxable income deduction, over the that is depreciated for the regular tax for the regular tax and the amount property s AMT using the 150% declining balance included in income for the AMT. Treat class life. method or the straight line method. the difference as a negative amount if (a) both the AMT and regular tax Property for which you elected to use Property placed in service after amounts are zero or more and the AMT the alternative depreciation system Use the same convention and amount is less than the regular tax (ADS) of section 168(g) for the regular recovery period used for the regular amount or (b) the AMT amount is a tax. tax. For property other than section loss, and the regular tax amount is a Qualified property that is or was 1250 property, use the 150% declining smaller loss, or zero or more. eligible for the special depreciation balance method, switching to straight Enter on line 13 the combined allowance if the depreciable basis of line the first tax year it gives a larger adjustments for the four items earlier. the property for the AMT is the same as deduction. For section 1250 property, for the regular tax. This applies to any use the straight line method. Line 14 Depreciation on special depreciation allowance, including those for qualified disaster How is the AMT class life Assets Placed in Service assistance property, qualified reuse and determined? The class life used for After 1986 the AMT is not necessarily the same as recycling property, qualified cellulosic This section describes when the recovery period used for the regular biofuel plant property, qualified New depreciation must be refigured for the tax. The class lives for the AMT are York Liberty Zone property, qualified AMT and how to figure the amount to listed in Rev. Proc , C.B. Gulf Opportunity Zone property, and enter on line , and in Pub. 946, How To Kansas disaster area qualified recovery Depreciate Property. Use 12 years for Do not include on this line any assistance property. The special any tangible personal property depreciation adjustment from: allowance is deductible for the AMT, not assigned a class life. An activity for which the estate or and there also is no adjustment trust is not at risk or income or loss required for any depreciation figured on See Pub. 946 for optional tables from a partnership or an S corporation the remaining basis of the qualified TIP that can be used to figure AMT if the basis limitations under section property if the depreciable basis of the depreciation. Rev. Proc , 704(d) or 1366(d) apply. Take this property for the AMT is the same as for C.B. 816, has special rules for adjustment into account on line 16; the regular tax. Property for which an short tax years and for property A tax shelter farm activity. Take this election is in effect to not have the disposed of before the end of the adjustment into account on line 23; or special allowance apply is not qualified recovery period. A passive activity. Take this property. adjustment into account on line 15. How is the line 14 adjustment Motion picture films, videotapes, or figured? Subtract the AMT deduction What depreciation must be refigured sound recordings. for depreciation from the regular tax for the AMT? Generally, you must Property depreciated under the deduction and enter the result. If the refigure depreciation for the AMT, unit-of-production method or any other AMT deduction is more than the regular including depreciation allocable to method not expressed in a term of tax deduction, enter the difference as a inventory costs, for: years. negative amount. Property placed in service after 1998 that is depreciated for the regular tax Qualified Indian reservation property. In addition to the AMT adjustment to using the 200% declining balance Qualified revitalization expenditures your deduction for depreciation, you method (generally 3-, 5-, 7-, or 10-year for a building for which you elected to must also adjust the amount of property under the modified accelerated claim the commercial revitalization depreciation that was capitalized, if any, cost recovery system (MACRS)), deduction under section 1400I. to account for the difference between Section 1250 property placed in A natural gas gathering line placed in the rules for the regular tax and the service after 1998 that is not service after April 11, AMT. Include on this line the current -3-

4 year adjustment to taxable income, if Circulation expenditures deducted expenditures to be amortized for the any, resulting from the difference. under section 173(a) for regular tax AMT. purposes must be amortized for AMT Line 15 Passive Activities purposes over 3 years beginning with Line 20 Research and the year the expenditures were paid or Experimental Costs Do not enter again elsewhere incurred.! on this schedule any AMT Enter the difference between the Do not make this adjustment for CAUTION adjustment or tax preference regular tax and AMT deduction. If the! costs paid or incurred in item included on this line. CAUTION AMT deduction is greater, enter the connection with an activity in For AMT purposes, the rules difference as a negative amount. which the estate or trust materially described in section 469 apply, except participated under the passive activity that in applying the limitations, If the estate or trust had a loss on rules or for costs for which you elected minimum tax rules apply. property for which circulation the optional 10-year write-off for expenditures have not been fully Refigure passive activity gains and research and experimental amortized for the AMT, the AMT losses on an AMT basis. Refigure a expenditures under section 59(e) for deduction is the smaller of (a) the passive activity gain or loss by taking regular tax purposes. amount of the loss allowable for the into account all AMT adjustments or tax expenditures had they remained Research and experimental preference items that pertain to that capitalized or (b) the remaining expenditures deducted under section activity. expenditures to be amortized for the 174(a) for regular tax purposes You may complete a second Form AMT. generally must be amortized for AMT 8582, Passive Activity Loss Limitations, purposes over 10 years beginning with to determine the passive activity losses Line 18 Long-Term the year the expenditures were paid or allowed for AMT purposes, but do not incurred. Contracts send this AMT Form 8582 to the IRS. Enter the difference between the For AMT purposes, the percentage of Enter the difference between the amount allowed for AMT purposes and completion method of accounting loss reported on page 1 and the AMT the amount allowed for regular tax described in section 460(b) generally loss, if any. purposes. If the amount for AMT must be used. However, this rule does purposes exceeds the amount allowed The amount of any passive not apply to any home construction for regular tax purposes, enter the TIP activity loss that is not contract (as defined in section difference as a negative amount. deductible (and is therefore 460(e)(6)). If the estate or trust had a loss on carried forward) for AMT purposes is Note. Contracts described in section property for which research and likely to differ from the amount (if any) 460(e)(1) are subject to the simplified experimental costs have not been fully that is carried forward for regular tax method of cost allocation of section amortized for the AMT, the AMT purposes. Therefore, it is essential that 460(b)(4). deduction is the smaller of (a) the loss you retain adequate records for both Enter the difference between the allowable for the costs had they AMT and regular tax purposes. AMT and regular tax income. If the remained capitalized or (b) the Publicly traded partnerships (PTPs). AMT income is smaller, enter the remaining costs to be amortized for the If the estate or trust had a loss from a difference as a negative amount. AMT. PTP, refigure the loss using any AMT adjustments, tax preference items, and Line 19 Mining Costs Line 21 Income From any AMT prior year unallowed loss. Line 16 Loss Limitations! Certain Installment Sales Do not make this adjustment for Before January 1, 1987 costs for which you elected the optional 10-year write-off period The installment method does not apply CAUTION If the loss is from a passive under section 59(e) for regular tax for AMT purposes to any nondealer! activity, use line 15 instead. If purposes. disposition of property that occurred CAUTION the loss is from a tax shelter after August 16, 1986, but before the farm activity (that is not passive), use Expenditures for the development or first day of your tax year that began in line 23. exploration of a mine or certain other 1987, if an installment obligation to mineral deposits (other than an oil, gas, Refigure your allowable losses for which the proportionate disallowance or geothermal well) deducted under AMT purposes from activities for which rule applied arose from the disposition. sections 616(a) and 617(a) for regular you are not at risk and basis limitations Enter on line 21 the amount of tax purposes must be amortized for applicable to interests in partnerships installment sale income that was AMT purposes over 10 years beginning reported for regular tax purposes. and stock in S corporations by taking with the year the expenditures were into account your AMT adjustments and paid or incurred. Line 22 Intangible Drilling tax preference items. See sections 59(h), 465, 704(d), and 1366(d). Enter the difference between the Costs Preference (IDCs) amount allowed for AMT purposes and Enter the difference between the the amount allowed for regular tax Do not make this adjustment for loss reported for regular tax purposes purposes. If the amount allowed for! costs for which you elected the and the AMT loss. If the AMT loss is CAUTION AMT purposes exceeds the amount optional 60-month write-off more than the loss reported for regular deducted for regular tax purposes, under section 59(e) for regular tax tax purposes, enter the adjustment as a enter the difference as a negative purposes. negative amount. amount. IDCs from oil, gas, and geothermal Line 17 Circulation Costs If the estate or trust had a loss on wells are a preference to the extent that property for which mining expenditures the excess IDCs exceed 65% of the net Do not make this adjustment for have not been fully amortized for the income from the wells. Figure the! expenditures for which you AMT, the AMT deduction is the smaller preference for all oil and gas properties CAUTION elected the optional 3-year of (a) the amount of the loss allowable separately from the preference for all write-off period for regular tax for the expenditures had they remained geothermal properties. purposes. capitalized or (b) the remaining Figure excess IDCs as follows: -4-

5 1. Determine the amount of the line method with a half-year convention, Form 4797 for the activity on line 13 estate s or trust s IDCs allowed for the no salvage value, and a recovery instead. regular tax under section 263(c), but do period of 15 years (22 years for 15-year Alcohol and cellulosic biofuel not include any section 263(c) public utility property). Figure this fuels credit and biodiesel and deduction for nonproductive wells, then amount separately for each property renewable diesel fuels credit. If the 2. Subtract the amount that would and include on line 23 only positive adjusted total income (Form 1041, page have been allowed had you amortized amounts. 1, line 17) includes the amount of the these IDCs over a 120-month period Patron s adjustment. Distributions alcohol and cellulosic biofuel fuels starting with the month the well was the estate or trust received from a credit or biodiesel and renewable diesel placed in production. cooperative may be includible in fuels credit, include that amount as a income. Unless the distributions are negative amount on line 23. Cost depletion can be nontaxable, include on line 23 the total Related adjustments. AMT! substituted for the amount AMT patronage dividend adjustment adjustments and tax preference items CAUTION allowed using amortization over reported to the estate or trust from the may affect deductions that are based 120 months. cooperative. on an income limit other than adjusted Net income. Determine net income by Amortization of pollution control gross income (AGI) or modified AGI (for reducing the gross income that the facilities. The amortization deduction example, farm conservation expenses). estate or trust received or accrued under section 169 must be refigured for Refigure these deductions using the during the tax year from all oil, gas, and the AMT. For facilities placed in service income limit as modified for the AMT. geothermal wells by the deductions after 1986 and before 1999, figure the Include the difference between the allocable to those wells (reduced by the amortization deduction for the AMT regular tax and AMT deduction on line excess IDCs). When refiguring net using the ADS described in section 23. If the AMT deduction is more than income, use only income and 168(g). For facilities placed in service the regular tax deduction, include the deductions allowed for the AMT. after 1998, figure the AMT deduction difference as a negative amount. Exception. The preference for IDCs under MACRS using the straight line Do not make an adjustment on from oil and gas wells does not apply to method. Enter the difference between! line 23 for an item you refigured taxpayers who are independent the regular tax and AMT deduction. If CAUTION on another line of Schedule I producers (that is, not integrated oil the AMT amount is greater, enter the (for example, line 6). companies as defined in section difference as a negative amount. 291(b)(4)). However, this benefit may Tax shelter farm activities. Figure Line 24 Alternative Tax Net be limited. First, figure the IDC this adjustment only if the tax shelter Operating Loss Deduction preference as if this exception did not farm activity (as defined in section The ATNOLD is the sum of the apply. For purposes of this exception, 58(a)(2)) is not a passive activity. If the alternative tax net operating loss complete and combine lines 1 through activity is passive, include it with any (ATNOL) carryovers and carrybacks to 23, including the IDC preference. If the other passive activities on line 15. the tax year, subject to the limitation amount of the IDC preference exceeds Refigure all gains and losses explained below. 40% of the total of lines 1 through 23, reported for the regular tax from tax The net operating loss (NOL) under enter the excess on line 22 (the benefit shelter farm activities by taking into section 172(c) is modified for alternative of this exception is limited). Otherwise, account any AMT adjustments and tax purposes by (a) taking into account do not enter an amount on line 22 (the preferences. Determine tax shelter farm the adjustments made under sections estate s or trust s benefit from this activity gain or loss for the AMT using 56 and 58 and (b) reducing the NOL by exception is not limited). the same rules used for the regular tax any item of tax preference under Line 23 Other Adjustments with the following modifications. No section 57. For an estate or trust that refigured loss is allowed, except to the held a residual interest in a real estate Enter on line 23 the total of any other extent an estate or trust is insolvent mortgage investment conduit (REMIC), adjustments that apply including the (see section 58(c)(1)). A refigured loss figure the ATNOLD without regard to following. may not be used in the current tax year any excess inclusion. Depreciation figured using to offset gains from other tax shelter pre-1987 rules. For AMT purposes, If this estate or trust is the farm activities. Instead, any refigured use the straight line method to figure beneficiary of another estate or trust loss must be suspended and carried depreciation on real property. Use a that terminated in 2009, include any forward indefinitely until (a) the estate recovery period of 19 years for 19-year ATNOL carryover that was reported in or trust has a gain in a subsequent tax real property and 15 years for box 11, code E of Schedule K-1 (Form year from the same activity or (b) the low-income housing. Enter the excess 1041). activity is disposed of. of depreciation claimed for regular tax The estate s or trust s ATNOLD may purposes over depreciation refigured The AMT amount of any tax shelter be limited. To figure the ATNOLD using the straight line method. Figure farm activity loss that is not deductible limitation, first figure alternative this amount separately for each and is carried forward is likely to differ minimum taxable income (AMTI) property and include on line 23 only from the regular tax amount. Keep without regard to the ATNOLD and any positive amounts. adequate records for both the AMT and domestic production activities regular tax. For leased personal property other deduction. For this purpose, figure a than recovery property, enter the Enter the difference between the tentative amount for line 6 of Schedule I amount by which the regular tax amount that would be reported for the (Form 1041) by treating line 24 as if it depreciation using the pre-1987 rules activity on Schedule E or F for the AMT were zero. Then, figure a tentative total exceeds the depreciation allowable and the regular tax amount. If (a) the by combining lines 1 23 of Schedule I using the straight line method. For AMT loss is more than the regular tax (Form 1041) using the line 6 tentative leased 10-year recovery property and loss, (b) the AMT gain is less than the amount. Add any domestic production leased 15-year public utility property, regular tax gain, or (c) there is an AMT activities deduction to this tentative enter the amount by which the loss and a regular tax gain, then enter total. The ATNOLD limitation is 90% of depreciation deduction determined for the adjustment as a negative amount. the result. regular tax purposes is more than the Enter any adjustment for amounts However, if an ATNOL that is carried deduction allowable using the straight reported on Schedule D, Form 4684, or back or carried forward to the tax year -5-

6 is attributable to qualified disaster losses (as defined in section 172(j)), qualified Gulf Opportunity Zone losses as defined in section 1400N(k)(2), qualified recovery assistance losses (as defined in Pub A, Information for Taxpayers Affected by the May 4, 2007, Kansas Storms and Tornadoes), qualified disaster recovery assistance losses (as defined in Pub B, Information for Affected Taxpayers in the Midwestern Disaster Areas) or an applicable NOL to which an election was made under section 172(b)(1)(H), the ATNOLD for the tax year is limited to the sum of: Line 29 Estate s or Trust s Share of Alternative Minimum Taxable Income For an estate or trust that held a residual interest in a REMIC, line 29 may not be less than the estate s or trust s share of the amount on Schedule E (Form 1040), line 38, column (c). If that amount is larger than the amount you would otherwise enter on line 29, enter that amount instead and write Sch. Q on the dotted line next to line 29. Part II Income 1202 exclusion (as refigured for AMT purposes). Lines 35 and 36 Capital gains and losses must take into account any basis adjustments from line 13, Part I. Line 41 Adjustment for Tax-Exempt Income In figuring the income distribution deduction on a minimum tax basis, the estate or trust is not allowed a deduction for any item of DNAMTI (line 37) that is not included in the gross income of the estate or trust figured on an AMT basis. Thus, for purposes of 1. The smaller of: Distribution Deduction figuring the allowable income on a Minimum Tax Basis a. The sum of the ATNOL distribution deduction on a minimum tax carrybacks and carryforwards to the tax basis, the DNAMTI is figured without year attributable to NOLs other than regard to any tax-exempt interest qualified disaster losses, qualified Gulf Line 30 Adjusted (except for amounts from line 8). Opportunity Zone losses, qualified Alternative Minimum Taxable If tax-exempt interest is the only recovery assistance losses, qualified Income tax-exempt income included in the total disaster recovery assistance losses, Generally, enter on line 30, Schedule I, distributions (line 40), and the DNAMTI and an applicable NOL to which an the amount from line 25, Schedule I. (line 37) is less than or equal to line 40, election was made under section However, if Form 1041, page 1, line 4 then enter on line 41 the amount from 172(b)(1)(H), or and line 25 are losses, enter on line 30 line 31. b. 90% of AMTI for the tax year the smaller of those losses. If Form If tax-exempt interest is the only (figured without regard to the ATNOLD 1041, line 4 is zero or a gain and line tax-exempt income included in the total and any domestic production activities 25 is a loss, enter zero on line 30. distributions (line 40), and the DNAMTI deduction, as discussed earlier), plus is more than line 40 (that is, the estate 2. The smaller of: Line 31 Adjusted or trust made a distribution that is less a. The sum of the ATNOL Tax-Exempt Interest than the DNAMTI), then figure the carrybacks and carryforwards to the tax To figure the adjusted tax-exempt adjustment by multiplying line 31 by a year attributable to qualified disaster interest (including exempt-interest fraction, the numerator of which is the losses, qualified Gulf Opportunity Zone dividends received as a shareholder in total distributions (line 40), and the a mutual fund or other regulated denominator of which is the DNAMTI losses, qualified recovery assistance investment company), subtract the total (line 37). Enter the result on line 41. losses, qualified disaster recovery assistance losses, and an applicable of any: If line 40 includes tax-exempt NOL to which an election was made 1. Tax-exempt interest from Form income other than tax-exempt interest under section 172(b)(1)(H), or 1041, Schedule A, line 2 figured for (except for amounts from line 8), figure AMT purposes, and line 41 by subtracting the total b. 100% of AMTI for the tax year 2. Section 212 expenses allowable expenses allocable to tax-exempt (figured without regard to the ATNOLD for AMT purposes allocable to income that are allowable for AMT and any domestic production activities tax-exempt interest, from the amount of purposes from tax-exempt income deduction, as discussed earlier) tax-exempt interest received. included on line 40. reduced by the amount determined Expenses that are directly allocable under 1, above. Do not subtract any deductions to tax-exempt income are allocated only reported on lines 2 through 4. to tax-exempt income. A reasonable Enter on line 24 the smaller of the Section 212 expenses that are proportion of expenses indirectly ATNOLD or the ATNOLD limitation. directly allocable to tax-exempt interest allocable to both tax-exempt income are allocated only to tax-exempt and other income must be allocated to interest. A reasonable proportion of each class of income. Any ATNOL not used may be carried back 2 years or forward up to 20 years section 212 expenses that are indirectly Line 44 Income (15 years for loss years beginning allocable to both tax-exempt interest and other income must be allocated to Distribution Deduction on a before 1998). In some cases, the carryback period is longer than 2 years; each class of income. Minimum Tax Basis for details, see Pub. 536, Net Operating Allocate the income distribution Losses (NOLs) for Individuals, Estates, Line 33 deduction figured on a minimum tax and Trusts. Reduce the amount on line 33 by any basis among the beneficiaries in the allocable section 1202 exclusion (as same manner as income was allocated refigured for AMT purposes). The treatment of ATNOLs does not for regular tax purposes. You need the allocated income distribution deduction affect your regular tax NOL. Line 34 figured on a minimum tax basis to Enter any capital gains that were paid figure the beneficiary s adjustment for If you elected under section or permanently set aside for charitable minimum tax purposes, as explained TIP 172(b)(3) to forego the purposes from the current year s under Box 12 AMT Items in the carryback period for regular tax income included on line 1 of Form Schedule K-1 instruction section of the purposes, the election will also apply for 1041, Schedule A. Reduce the amount Instructions for Form 1041 and the AMT. on line 34 by any allocable section Schedules A, B, G, J, and K

7 Line 62 is greater than zero, Part III AMT Line 73 is smaller than line 74, and adjustments). Computation The exception for foreign qualified been required to make those Schedule D, line 14a, column (2) or dividends below does not apply. line 15, column (2), as refigured for the Line 53 Alternative But, you do not need to make any AMT if necessary, is zero or a loss. adjustments if: The amount on line 7 of the AMT Minimum Foreign Tax Credit The estate or trust qualifies for the Schedule D Tax Worksheet (line 18 on adjustment exception under Qualified Schedule D (Form 1041)) minus the To see if you need to figure the Dividends Tax Worksheet (Estates and amount on Form 4952, line 4e, that you TIP estate s or trust s AMT foreign Trusts) or Schedule D Filers in the elected to include on Form 4952, line tax credit, fill in line 55 of Instructions for Form 1116 and 4g, is zero or less. Schedule I as instructed. If the amount on line 55 is greater than or equal to Line 62 of Schedule I (Form 1041) is Use Worksheet B if you: the amount on line 52, the estate or not more than $175,000. Cannot use Worksheet A, trust does not owe the AMT. Enter zero Note. Use the estate s or trust s Have foreign source capital gains on line 56 and see Who Must Complete capital gains and losses as refigured for and losses in no more than two on page 1 to find out if you must file the AMT to determine whether your separate categories, Schedule I with Form However, total amounts are less than the $20,000 Did not have any item of even if the estate or trust does not owe threshold under the adjustment unrecaptured section 1250 gain or any AMT, you may need to complete line 53 exception. item of 28% rate gain or loss for either to see if you have an AMT foreign tax regular tax or AMT, and To adjust foreign source qualified credit carryback or carryforward to Did not have any capital gains taxed dividends, multiply the estate s or trust s other tax years. at a rate of 0%. foreign source qualified dividends in To figure the AMT foreign tax credit, each separate category by if the Instructions for Worksheets A and follow the steps discussed below. foreign source qualified dividends are B. When you complete Worksheet A taxed at a rate of 15%. Include the or B, use foreign source capital gains Step 1. Complete and attach a results on line 1a of the AMT Form and losses as refigured for the AMT, if separate AMT Form 1116, with the necessary, and do not use any foreign notation at the top Alt Min Tax for source capital gains that you elected to each separate limitation category You adjust the estate s or trust s include on line 4g of the AMT Form specified at the top of Form foreign source qualified dividends taxed If you must complete a Schedule Note. When applying the separate at the 0% rate by not including them on D for the AMT, use line 15 of that AMT limitation categories, use the applicable line 1a of Form Amounts taxed at Schedule D to complete line 3 of AMT rate instead of the regular tax rate the 0% rate are on line 8 of the Worksheet A or Line 4 or the Line 2 to determine if any income is Qualified Dividends Tax Worksheet in Worksheet for Worksheet B. Use high-taxed. the Instructions for Form 1041, line instead of to complete of Schedule D (Form 1041), or line 19 Step 2. If you (on behalf of the estate lines 11, 13, and 15 of Worksheet B of Schedule D Tax Worksheet in the or trust) previously made or are making and to complete lines 8, 11, and 17 of Instructions for Schedule D (Form the Simplified limitation election (see the Line 15 Worksheet for Worksheet 1041). page 8), skip Part I and enter on the B. AMT Form 1116, line 16, the same Do not adjust the amount of any If the estate or trust does not qualify! amount you entered on that line for the foreign source qualified to use Worksheet A or Worksheet B, regular tax. If you did not complete CAUTION dividends you elected to include use the instructions for Capital Gains Form 1116 for the regular tax and you on line 4g of the AMT Form and Losses in Pub. 514 to determine previously made or are making the Foreign capital gains or losses. If the adjustments you make. simplified limitation election (on behalf any capital gain or loss from U.S. or Step 4. Complete Part II and lines 9 of the estate or trust), complete Part I foreign sources is different for the AMT, through 13 of the AMT Form Use and lines 14 through 16 of the AMT use the refigured amounts to complete the estate s or trust s AMT foreign tax Form 1116 using regular tax amounts. this step. credit carryover, if any, on line 10. If the election does not apply, To figure the adjustment for the Step 5. If the simplified limitation complete Part I, using only income and estate s or trust s foreign source capital election does not apply, complete lines deductions allowed for the AMT that gains or losses, you must first 14 through 16 of the AMT Form are attributable to sources outside the determine whether you can use United States. If the estate or trust has Worksheet A or Worksheet B in the Step 6. If you did not complete Part IV any foreign source qualified dividends Instructions for Form Otherwise, of Schedule I, enter the amount from or foreign source capital gains or you must use the instructions for Schedule I, line 29 on line 17 of the losses, use the instructions under Step Capital Gains and Losses in Pub. 514, AMT Form 1116 and go to Step 7 later. 3 to determine whether you must make Foreign Tax Credit for Individuals, to If you completed Part IV of Schedule adjustments to those amounts before figure the adjustments you must make I, complete an AMT Worksheet for line you include the amounts on line 1a or to the estate s or trust s foreign source 17 in the Instructions for Form 1116 to line 5 of the AMT Form capital gains and losses. figure the amount to enter on Form Step 3. Follow the instructions below, Use Worksheet A if the estate or 1116, line 17, if: if applicable, to determine the amount trust has foreign source capital gains or Line 62 of Schedule I is greater than of foreign source qualified dividends losses in no more than two separate zero, and and foreign source capital gains and categories, and any of the following Line 73 of Schedule I is smaller than losses to include on line 1a and line 5 apply. line 74. of the AMT Form You were not required to make But you do not need to complete the Foreign qualified dividends. You adjustments to the estate s or trust s Worksheet for Line 17 if: must adjust the estate s or trust s foreign source qualified dividends under The estate or trust qualifies for the foreign source qualified dividends the rules described earlier (or if the adjustment exception discussed in the before you include those amounts on estate or trust had foreign source Instructions for Form 1116 and line 1a of the AMT Form 1116 if: qualified dividends, you would not have Line 62 is not more than $175,

8 Note. Use the estate s and trust s use the estate s or trust s regular tax Lines 2 through 4 of a Qualified capital gains and losses as refigured for income for Form 1116, Part I, instead of Dividends Tax Worksheet. the AMT to determine if its total refiguring the estate s or trust s foreign If you were required to complete an amounts are less than the $20,000 source income for the AMT, as AMT Form 4952, use it to figure the threshold under the adjustment described in Step 2 on page 7. The amount to enter on line 21 of the AMT exception. estate or trust must make the election Schedule D (Form 1041), lines 3 and 4 If you do not have to complete an for the first tax year after 1997 for which of the AMT Schedule D Tax Worksheet, AMT Worksheet for line 17, enter the it claims an AMT foreign tax credit. If it and line 3 of the Tax Worksheet. Use amount from line 29 of Schedule I on does not make the election for that amounts from the AMT Schedule D line 17 of the AMT Form year, it may not make it for a later year. (Form 1041), AMT Schedule D Tax Once made, the election applies to all Worksheet, or Qualified Dividends Tax Instructions for completing an later tax years and may be revoked Worksheet to complete Schedule I, AMT Worksheet for line 17. To only with IRS consent. lines 58, 59, and 60. Keep the AMT complete an AMT Worksheet for line 17 Schedule D (Form 1041) and in the Instructions for Form 1116, follow Part IV Line 52 worksheet for your records. Do not these instructions. attach the AMT Schedule D (Form 1. Enter the amount from Schedule Computation Using 1041) to Form I, line 29 on line 1 of the worksheet. 2. Skip lines 2 and 3 of the Maximum Capital Gains Do not decrease the estate s or worksheet. trust s section 1202 exclusion by Rates! CAUTION 3. Enter the amount from Schedule the amount, if any, included on I, line 71 on line 4 of the worksheet. line 9. Lines 58, 59, and Multiply line 4 of the worksheet If the estate or trust is a beneficiary by (instead of ) and enter If you used Schedule D (Form 1041), of another estate or trust. If the the results on line 5 of the worksheet. the Schedule D Tax Worksheet, or the estate or trust received a Schedule K-1 5. Enter the amount from Schedule Qualified Dividend Tax Worksheet, you (Form 1041) from another estate or I, line 69 on line 6 of the worksheet. generally may enter the amounts as trust that shows an amount in box Multiply line 6 of the worksheet instructed on Schedule I, lines 58, 59, with code B, C, D, E, or F, follow the by (instead of ) and enter and 60. But do not use those amounts instructions in the table below. the result on line 7 of the worksheet. if any of the following apply. 7. Enter the amount from Schedule 1. Any gain or loss on Schedule D IF the code in box THEN include that I, line 68 on line 8 of the worksheet. (Form 1041) is different for the AMT (for 12 is... amount in the total 8. Complete lines 9 and 10 of the example, because the AMT basis was on... worksheet as instructed on the different due to depreciation B line 2 of an AMT worksheet. adjustments or an incentive stock Qualified Dividends option adjustment or the AMT capital Tax Worksheet; line Step 7. Enter the amount from loss carryover from 2008 was different). 19 of an AMT Schedule I, line 52 on the AMT Form 2. You did not complete Part V of Schedule D (Form 1116, line 19. Complete lines 18, 20, Schedule D (Form 1041), the Schedule 1041); or line 2 of an and 21 of the AMT Form D Tax Worksheet, or the Qualified AMT Schedule D Step 8. Complete Part IV of the first Dividends Tax Worksheet because Tax Worksheet, AMT Form 1116 only. Form 1041, line 22, was zero or less. whichever applies. Enter on line 53 of Schedule I the 3. The estate or trust received a C line 3, column (f), of amount from line 29 of the first AMT Schedule K-1 (Form 1041) that shows an AMT Schedule D Form an amount in box 12 with code B, C, D, (Form 1041). E, or F. If this applies, see If the estate Attach to the estate s or trust s return or trust is a beneficiary of another D line 8, column (f), of all AMT Forms 1116 you used to figure estate or trust. an AMT Schedule D your AMT Foreign Tax Credit. (Form 1041). AMT foreign tax credit carryback and If 1 or 3 above applies, complete carryforward. If the AMT foreign tax Parts I through IV of an AMT Schedule E line 11 of an AMT credit is limited, any unused amount D (Form 1041) by refiguring the Unrecaptured Section 1250 Gain can be carried back or forward under amounts of your gains and losses for Worksheet. section 904(c). The election to forego the AMT. Next, if 1, 2, or 3 above the carryback period for regular tax applies, complete the following lines of F line 4 of an AMT purposes also applies for the AMT. the applicable schedule or worksheet: 28% Rate Gain Simplified limitation election. The Lines 18 through 22 of an AMT Worksheet. estate or trust may elect to use a Schedule D (Form 1041), simplified section 904 limitation to figure Lines 2 through 13 of an AMT its AMT foreign tax credit. To do so, Schedule D Tax Worksheet, or -8-