- For 2003, the exemption amount has increased to $40,250 ($58,000 if married filing jointly or qualifying widow(er); $29,000
if married
filing separately).
- The 20% maximum tax rate on net capital gain has been reduced to 15%, and the 10% rate has been reduced to 5%, for sales and
other
dispositions after May 5, 2003 (and installment payments received after that date). See Part III.
- Beginning in 2003, your alternative tax net operating loss deduction (ATNOLD) is generally limited to 90% of your alternative
minimum
taxable income (figured without regard to the ATNOLD). See the line 27 instructions beginning on page 6.
- For 2003, the minimum exemption amount for a child under age 14 has increased to $5,600.
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 special treatment, or who qualify for certain special deductions, under the tax law. Because of these special
benefits, some taxpayers
with substantial economic income can significantly reduce their regular tax. The AMT ensures that these taxpayers pay at least
a minimum amount of
tax.
Also use Form 6251 to figure the tax liability limit on the general business credit, the qualified electric vehicle credit,
the nonconventional
source fuel credit, or the credit for prior year minimum tax.
Attach Form 6251 to your return if:
- Line 31 is greater than line 34, or
- You claim any general business credit, the qualified electric vehicle credit, the nonconventional source fuel credit, or the
credit for
prior year minimum tax, or
- The total of 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.
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 (except for Form 1116, Foreign Tax Credit—see the
instructions for line 32 beginning on page 7), but keep it for your records.
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.
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 figured for line 30, replace the amount on line 30 with the smaller of that net gain or the amount on
line 28. Also, write
“RPI” on the dotted line next to line 30. Otherwise, do not change line 30.
Note:
If you are filing Form 1040NR, treat any reference in these instructions or on Form 6251 to a line on Form 1040 as a reference
to the corresponding
line on Form 1040NR.
Credit for Prior Year Minimum Tax
See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts, if you paid AMT for 2002 or you had a minimum
tax credit carryforward on your 2002 Form 8801. If you pay AMT for 2003, you may be able to take a credit on Form 8801 for
2004.
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)).
See section 59(e) for more details.
