Form 6251: Alternative Minimum Tax—Individuals

Form 6251 is generally completed by gathering information from the taxpayer’s federal tax return and supporting records, identifying applicable adjustments and tax preference items, calculating alternative minimum taxable income, applying applicable calculations, and determining whether alternative minimum tax may be due.

The basic process is to gather income and tax records, enter applicable income information, identify adjustments and preference items, calculate alternative minimum taxable income, complete applicable tax calculations and credits, and review Form 6251 before submitting it with the applicable tax return. Taxpayers should retain a copy of the completed form and supporting records.

Section 1

Enter applicable income information used in the alternative minimum tax calculation. This generally begins with information from the taxpayer’s federal income tax return.

The amounts should generally agree with the taxpayer’s income tax return and supporting income records. Taxpayers should review the information carefully before continuing with the alternative minimum tax calculation.

Section 2

Enter applicable adjustments to income and deductions. Certain tax items may be treated differently when calculating alternative minimum taxable income.

The applicable adjustments should generally be supported by the taxpayer’s tax return, accounting records, investment records, property records, and other documentation. Only adjustments that apply to the taxpayer should generally be included.

Section 3

Report applicable tax preference items and other information used in calculating alternative minimum taxable income. Certain income, deductions, or other tax items may require separate treatment under alternative minimum tax rules.

The information should generally be based on the taxpayer’s supporting tax records and applicable calculations. Taxpayers should review the amounts carefully to help ensure that applicable items are properly reported.

Section 4

Calculate alternative minimum taxable income. This generally involves combining applicable income with required adjustments and preference items.

The calculation should generally be reviewed against the taxpayer’s federal tax return and supporting records. Taxpayers should retain documentation supporting the amounts used in the calculation.

Section 5

Apply the applicable exemption and alternative minimum tax calculation. The calculation generally considers the taxpayer’s filing status, alternative minimum taxable income, and other applicable information.

The applicable amounts should generally be based on the information available for the taxpayer’s filing circumstances. Taxpayers should review the calculation carefully before proceeding to the final portions of the form.

Section 6

Determine the applicable alternative minimum tax amount. This generally involves comparing the alternative minimum tax calculation with the taxpayer’s regular tax calculation and considering applicable credits or other tax amounts.

The resulting amount should generally be reviewed against the taxpayer’s federal income tax return and other applicable tax calculations. Supporting records should be retained with the completed Form 6251.

Section 7

Complete applicable information for tax credits and other adjustments that may affect the alternative minimum tax calculation. Certain taxpayers may have additional information that affects the final amount.

Only information that applies to the taxpayer should generally be included. Supporting tax, income, investment, business, and credit records should be retained with the taxpayer’s files.

Final Review

Review Form 6251 after completing all applicable sections. Check the income information, adjustments, tax preference items, alternative minimum taxable income, exemption information, tax calculations, credits, and final amounts.

A final review can help identify incorrect or incomplete information before Form 6251 is submitted with the applicable tax return. Taxpayers should retain a copy of Form 6251, federal tax returns, income records, deduction records, investment records, business records, and supporting tax documents with their files.