If it’s a different form, where the hell is it? If it’s the same form, where are the instructions for calculating it differently for the AMT?
Pretty much all there in the title. I’ve been trying to sort this for an hour and am about to just brain myself on a dull spoon, or flee the country for Russia.
Same form, different numbers.
You won’t find a separate set of instructions for it on Sch D. AMT is its own set of rules, and those rules often change what is deductible and when. One common reason for an AMT version of Sch D is a disposition of a depreciable asset because AMT depreciation is (usually) different from regular depreciation. You might not have one of those yourself… but you might own a publicly traded partnership, or a mutual fund that does.
Unfortunately, there is no layman’s summary of AMT that I know of. It’s like a cancer that has metastasized. The form 6251 instructions are you best starting point: Instructions for Form 6251 (2022) | Internal Revenue Service
Thanks dracoi. Confirmation that it’s not some separate form is helpful.
The funny thing is, I don’t think we even owe the AMT if I can just get to the end of the worksheet. But we received a small amount of a trust income with an AMT adjustment, so the little calculator widget tells me I have to fill out Form 6251.
My only capital gains are from mutual funds reported on 1099-DIV. Is that document supposed to tell me whether the AMT calculation of cap gains will be different. If not, how the heck do I find that out?
The way AMT works is basically like this:
Step 1: Do your whole return using normal rules
Step 2: Do your whole return using AMT rules
Step 3: Make a list of the differences on form 6251
Step 4: Pay whichever tax is highest. (Heads: you lose. Tails: you lose more.)
So you’re in the midst of step 2, basically. The problem is that there’s no tl;dr way to do this. There are more than twenty “AMT preference items” that could be different and these items range from things you already know (Sch A taxes and home equity interest paid) to things that could occupy a day-long professional seminar (like intangible drilling or incentive stock options).
If the trust gave you the adjustment on a K1, then it should be something you can put on a form 6251 line directly… but figuring out whether you owe AMT still requires looking at your entire return.
But as you say, most people don’t owe it. The IRS doesn’t even have the information it needs to check your work without doing an audit.
It’s extremely rare for an average tax payer to owe AMT because the exemption amount is much higher and the rate beyond the exemption amount for that amount of income is much lower. Unless you have a large amount of income and a significant amount of preference or exclusion items relative to your income, you can be pretty sure that it’s not going to make a difference. This is not meant to be tax advice for your specific case, but a general rule. You should probably go ahead and do the AMT-based return to calculate what your minimum tax is, just to see how much lower it is than your regular tax liability to give you an idea of how much in preference and exclusion items you would need.