INSTRUCTIONS : ALTERNATIVE MINIMUM TAX—INDIVIDUAL (Form 6251)
Form 6251 is a United States Internal Revenue Service tax form filed by every individual taxpayer to determine if the taxpayer will pay standard income tax or the Alternative Minimum Tax. The alternative minimum tax is a higher tax rate used for individuals or corporations over a substantial threshold.
A Form 6251 can be obtained through the I.R.S’ website or by obtaining the documents through a local tax office.
The form must be filed alongside your regular income tax form, which is the 1040 form for individuals tax payers. You will use the information on your 1040 to enter on the Form 6251. Because of the different types of 1040 forms, the location of the correct amounts will vary. For our example, we will be using the standard 1040 as our reference.
Enter your name and social security number at the top of the form.
1. Enter the amount on your 1040 line 41 on line 1 of the Form 6251.
2. Continue to enter the amounts taken from your 1040 on the appropriate lines if they are applicable. Leave blank any lines that do not apply to you.
3. Enter medical and dental amounts, home mortgage interest amounts, deductions, investment interest, net operating loss, qualified small business stock, long term contracts, or any other amounts that apply to part I.
4. Add all of the amounts in lines 1 through 27 and enter this amount on line 28. This is your Alternative Minimum Taxable income.
5. You are exempt from the AMT if the amount on line 28 is less than the amounts indicated in line 29 in part II. If more, you must further completed part II.
6. Calculate your AMT amount by entering the appropriate amounts in lines 30 through 35.
7. If you have capital gains during the tax year, you must further fill out part III to calculate the AMT that will be applied to your capital gains.
8. Enter your capital gains information on the appropriate lines in part III. You must refer to Form 2555.
9. Fill out lines 36 to 54 to determine the your tax liability for your capital gains.
10. Once completed, you must filed your Form 6251 with the IRS and pay any AMT amounts you are liable for.
