In determining the alternative minimum taxable income, qualified residence interest (other than qualified housing interest defined in section 56(e)) is not allowed.

If you completed Form 4952, Investment Interest Expense Deduction, for regular tax purposes, you may have an adjustment on this line. Refigure your investment interest expense on a separate AMT Form 4952 as follows.

Enter any state, local, or foreign real property taxes; state or local personal property taxes; state and local general sales taxes; and any state, local, or foreign income taxes that were included on Form 1041, page 1, line 11.

Enter any refunds received in 2012 of taxes described for line 3 above and included in income.

Refigure the depletion deduction for AMT purposes by using only the income and deductions allowed for the AMT when refiguring the limit based on taxable income from the property under section 613(a) and the limit based on taxable income, with certain adjustments, under section 613A(d)(1). Also, the depletion deduction for mines, wells, and other natural deposits under section 611 is limited to the property's adjusted basis at the end of the year, as refigured for the AMT, unless the estate or trust is an independent producer or royalty owner claiming percentage depletion for oil and gas wells. Figure this limit separately for each property. When refiguring the property's adjusted basis, take into account any AMT adjustments made this year or in previous years that affect basis (other than the current year's depletion).

Enter on line 6 the difference between the regular tax and AMT deduction. If the AMT deduction is more than the regular tax deduction, enter the difference as a negative amount.

Enter any NOLD from line 15a of page 1 of the Form 1041 as a positive amount.

Enter the interest earned from specified private activity bonds reduced (but not below zero) by any deduction that would have been allowable if the interest were includible in gross income for regular tax purposes. Each payer of this type of interest should send a Form 1099-INT, Interest Income, to the estate or trust showing the amount of this interest in box 9. Generally, specified private activity bonds are any qualified bonds (as defined in section 141) issued after August 7, 1986, and before 2009 or after 2010, the interest on which is not includible in gross income for the regular tax. See section 57(a)(5) for more information.

Do not include interest on qualified Gulf Opportunity Zone bonds described in section 1400N(a) or qualified Midwestern disaster area bonds.

Exempt-interest dividends paid by a regulated investment company are treated as interest from specified private activity bonds to the extent the dividends are attributable to interest on the bonds received by the company, minus an allocable share of the expenses paid or incurred by the company in earning the interest. This amount should also be reported to the estate or trust on Form 1099-INT in  
box 9.

If the estate or trust claimed the exclusion under section 1202 for gain on qualified small business stock held more than 5 years, multiply the excluded gain (as shown on Schedule D (Form 1041)) by 7% (.07). Enter the result on line 9 as a positive amount.

For regular tax purposes, no income is recognized when an incentive stock option (as defined in section 422(b)) is exercised. However, this rule does not apply for AMT purposes. Instead, the estate or trust must generally include on line 10 the excess, if any, of:

If the estate or trust acquired stock by exercising an option and it disposed of that stock in the same year, the tax treatment under the regular tax and the AMT is the same, and no adjustment is required.

Increase the AMT basis of any stock acquired through the exercise of an incentive stock option by the amount of the adjustment.

If the estate or trust is the beneficiary of another estate or trust, enter the adjustment for minimum tax purposes from box 12, code A, Schedule K-1 (Form 1041).

If the estate or trust is a partner in an electing large partnership, enter on line 12 the amount from Schedule K-1 (Form 1065-B), Partner's Share of Income (Loss) From an Electing Large Partnership, box 6. Take into account any amount from Schedule K-1 (Form 1065-B), box 5, when figuring the amount to enter on line 15.

Use this line to report any AMT adjustment related to the disposition of property resulting from refiguring:

First, figure any ordinary income adjustment related to 3 above. Then, refigure Form 4684, Form 4797, and Schedule D for the AMT, if applicable, by taking into account any adjustments you made this year or in previous years that affect the estate's or trust's basis or otherwise result in a different amount for AMT. If the estate or trust has a capital loss after refiguring Schedule D for the AMT, apply the $3,000 capital loss limitation separately to the AMT loss. For each of the four items listed above, figure the difference between the amount included in taxable income for the regular tax and the amount included in income for the AMT. Treat the difference as a negative amount if (a) both the AMT and regular tax amounts are zero or more and the AMT amount is less than the regular tax amount or (b) the AMT amount is a loss, and the regular tax amount is a smaller loss, or zero or more.

Enter on line 13 the combined adjustments for the four items earlier.

This section describes when depreciation must be refigured for the AMT and how to figure the amount to enter on line 14.

Do not include on this line any depreciation adjustment from:

How is the AMT class life determined?   The class life used for the AMT is not necessarily the same as the recovery period used for the regular tax. The class lives for the AMT are listed in Rev. Proc. 87-56, 1987-2 C.B. 674, and in Pub. 946, How To Depreciate Property. Use 12 years for any tangible personal property  
not assigned a class life.

  

See Pub. 946 for optional tables that can be used to figure AMT depreciation. Rev. Proc. 89-15, 1989-1 C.B. 816, has special rules for short tax years and for property disposed of before the end of the recovery period.

For AMT purposes, the rules described in section 469 apply, except that in applying the limitations, minimum tax rules apply.

Refigure passive activity gains and losses on an AMT basis. Refigure a passive activity gain or loss by taking into account all AMT adjustments or tax preference items that pertain to that activity.

You may complete a second Form 8582, Passive Activity Loss Limitations, to determine the passive activity losses allowed for AMT purposes, but do not send this AMT Form 8582 to the IRS.

Enter the difference between the loss reported on page 1 and the AMT loss, if any.

Refigure your allowable losses for AMT purposes from activities for which you are not at risk and basis limitations applicable to interests in partnerships and stock in S corporations by taking into account your AMT adjustments and tax preference items. See sections 59(h), 465, 704(d), and 1366(d).

Enter the difference between the loss reported for regular tax purposes and the AMT loss. If the AMT loss is more than the loss reported for regular tax purposes, enter the adjustment as a negative amount.

Circulation expenditures deducted under section 173(a) for regular tax purposes must be amortized for AMT purposes over 3 years beginning with the year the expenditures were paid or incurred.

Enter the difference between the regular tax and AMT deduction. If the AMT deduction is greater, enter the difference as a negative amount.

If the estate or trust had a loss on property for which circulation expenditures have not been fully amortized for the AMT, the AMT deduction is the smaller of (a) the amount of the loss allowable for the expenditures had they remained capitalized or (b) the remaining expenditures to be amortized for the AMT.

For AMT purposes, the percentage of completion method of accounting described in section 460(b) generally must be used. However, this rule does not apply to any home construction contract (as defined in section 460(e)(6)).

Enter the difference between the AMT and regular tax income. If the AMT income is smaller, enter the difference as a negative amount.

Expenditures for the development or exploration of a mine or certain other mineral deposits (other than an oil, gas, or geothermal well) deducted under sections 616(a) and 617(a) for regular tax purposes must be amortized for AMT purposes over 10 years beginning with the year the expenditures were paid or incurred.

Enter the difference between the amount allowed for AMT purposes and the amount allowed for regular tax purposes. If the amount allowed for AMT purposes exceeds the amount deducted for regular tax purposes, enter the difference as a negative amount.

If the estate or trust had a loss on property for which mining expenditures have not been fully amortized for the AMT, the AMT deduction is the smaller of (a) the amount of the loss allowable for the expenditures had they remained capitalized or (b) the remaining expenditures to be amortized for the AMT.

Research and experimental expenditures deducted under section 174(a) for regular tax purposes generally must be amortized for AMT purposes over 10 years beginning with the year the expenditures were paid or incurred.

Enter the difference between the amount allowed for AMT purposes and the amount allowed for regular tax purposes. If the amount for AMT purposes exceeds the amount allowed for regular tax purposes, enter the difference as a negative amount.

If the estate or trust had a loss on property for which research and experimental costs have not been fully amortized for the AMT, the AMT deduction is the smaller of (a) the loss allowable for the costs had they remained capitalized or (b) the remaining costs to be amortized for the AMT.

The installment method does not apply for AMT purposes to any nondealer disposition of property that occurred after August 16, 1986, but before the first day of your tax year that began in 1987, if an installment obligation to which the proportionate disallowance rule applied arose from the disposition. Enter on line 21 the amount of installment sale income that was reported for regular tax purposes.

IDCs from oil, gas, and geothermal wells are a preference to the extent that the excess IDCs exceed 65% of the net income from the wells. Figure the preference for all oil and gas properties separately from the preference for all geothermal properties.

Figure excess IDCs as follows:

Enter on line 23 the total of any other adjustments that apply including the following.

The ATNOLD is the sum of the alternative tax net operating loss (ATNOL) carryovers and carrybacks to the tax year, subject to the limitation explained below.

The net operating loss (NOL) under section 172(c) is modified for alternative tax purposes by (a) taking into account the adjustments made under sections 56 and 58 and (b) reducing the NOL by any item of tax preference under section 57. For an estate or trust that held a residual interest in a real estate mortgage investment conduit (REMIC), figure the ATNOLD without regard to any excess inclusion.

If this estate or trust is the beneficiary of another estate or trust that terminated in 2012, include any ATNOL carryover that was reported in box 11, code E of Schedule K-1 (Form 1041).

The estate's or trust's ATNOLD may be limited. To figure the ATNOLD limitation, first figure alternative minimum taxable income (AMTI) without regard to the ATNOLD and any domestic production activities deduction. For this purpose, figure a tentative amount for line 6 of Schedule I (Form 1041) by treating line 24 as if it were zero. Then, figure a tentative total by combining lines 1–23 of Schedule I (Form 1041) using the line 6 tentative amount. Add any domestic production activities deduction to this tentative total. The ATNOLD limitation is 90% of the result.

However, the 90% limit does not apply to an ATNOL that 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. 4492-A, Information for Taxpayers Affected by the May 4, 2007, Kansas Storms and Tornadoes), qualified disaster recovery assistance losses (as defined in Pub. 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas) or a 2008 or 2009 loss that you elected to carryback more than 2 years under section 172(b)(1)(H). If an ATNOL that is carried back or carried forward to a tax year is attributable to any of those losses, the ATNOLD for the tax year is limited to the sum of:

Enter on line 24 the smaller of the ATNOLD or the ATNOLD limitation.

Any ATNOL not used may be carried back 2 years or forward up to 20 years (15 years for loss years beginning before 1998). In some cases, the carryback period is longer than 2 years; for details, see Pub. 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts.

The treatment of ATNOLs does not affect your regular tax NOL.

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.

Generally, enter on line 30, Schedule I, the amount from line 25, Schedule I. However, if Form 1041, page 1, line 4 and line 25 are losses, enter on line 30 the smaller of those losses. If Form 1041, line 4 is zero or a gain and line 25 is a loss, enter zero on line 30.

To figure the adjusted tax-exempt interest (including exempt-interest dividends received as a shareholder in a mutual fund or other regulated investment company), subtract the total of any:

Do not subtract any deductions reported on lines 2 through 4.

Section 212 expenses that are directly allocable to tax-exempt interest are allocated only to tax-exempt interest. A reasonable proportion of section 212 expenses that are indirectly allocable to both tax-exempt interest and other income must be allocated to each class of income.

Reduce the amount on line 33 by any allocable section 1202 exclusion (as refigured for AMT purposes).

Enter any capital gains that were paid or permanently set aside for charitable purposes from the current year's income included on line 1 of Form 1041, Schedule A. Reduce the amount on line 34 by any allocable section 1202 exclusion (as refigured for AMT purposes).

Capital gains and losses must take into account any basis adjustments from line 13, Part I.

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 figuring the allowable income distribution deduction on a minimum tax basis, the DNAMTI is figured without regard to any tax-exempt interest (except for amounts from line 8).

If tax-exempt interest is the only tax-exempt income included in the total distributions (line 40), and the DNAMTI (line 37) is less than or equal to line 40, then enter on line 41 the amount from  
line 31.

If tax-exempt interest is the only tax-exempt income included in the total distributions (line 40), and the DNAMTI is more than line 40 (that is, the estate or trust made a distribution that is less than the DNAMTI), then figure the adjustment by multiplying line 31 by a fraction, the numerator of which is the total distributions (line 40), and the denominator of which is the DNAMTI (line 37). Enter the result on line 41.

If line 40 includes tax-exempt income other than tax-exempt interest (except for amounts from line 8), figure line 41 by subtracting the total expenses allocable to tax-exempt income that are allowable for AMT purposes from tax-exempt income included on line 40.

Expenses that are directly allocable to tax-exempt income are allocated only to tax-exempt income. A reasonable proportion of expenses indirectly allocable to both tax-exempt income and other income must be allocated to each class of income.

Allocate the income distribution deduction figured on a minimum tax basis among the beneficiaries in the same manner as income was allocated for regular tax purposes. You need the allocated income distribution deduction figured on a minimum tax basis to figure the beneficiary's adjustment for minimum tax purposes, as explained under Box 12–AMT Items in the Schedule K-1 instruction section of the Instructions for Form 1041 and Schedules A, B, G, J, and K-1.

To figure the AMT foreign tax credit, follow the steps discussed below.

Step 3.   Follow the instructions below, if applicable, to determine the amount of foreign source qualified dividends and foreign source capital gains and losses to include on line 1a and line 5 of the AMT Form 1116.

Foreign qualified dividends.

You must adjust the estate's or trust's foreign source qualified dividends before you include those amounts on line 1a of the AMT Form 1116 if:

• Line 62 is greater than zero,

• Line 73 is smaller than line 74, and

• The exception for foreign qualified dividends below does not apply.

But, you do not need to make any adjustments if:

• The estate or trust qualifies for the adjustment exception under Qualified Dividends Tax Worksheet (Estates and Trusts) or Schedule D Filers in the Instructions for Form 1116 and

• Line 62 of Schedule I (Form 1041) is not more than $175,000.

Note.

Use the estate's or trust's capital gains and losses as refigured for the AMT to determine whether your total amounts are less than the $20,000 threshold under the adjustment exception.

  To adjust foreign source qualified dividends, multiply the estate's or trust's foreign source qualified dividends in each separate category by 0.5357 if the foreign source qualified dividends are taxed at a rate of 15%. Include the results on line 1a of the AMT  
Form 1116.

  You adjust the estate's or trust's foreign source qualified dividends taxed at the 0% rate by not including them on line 1a of Form 1116. Amounts taxed at the 0% rate are on line 8 of the Qualified Dividends Tax Worksheet in the Instructions for Form 1041, line 26 of Schedule D (Form 1041), or line 19 of the Schedule D Tax Worksheet in the Instructions for Schedule D  
(Form 1041).

  

Do not adjust the amount of any foreign source qualified dividends you elected to include on line 4g of the AMT Form 4952.

Foreign capital gains or losses.

If any capital gain or loss from U.S. or foreign sources is different for the AMT, use the refigured amounts to complete this step.

To figure the adjustment for the estate's or trust's foreign source capital gains or losses, you must first determine whether you can use Worksheet A or Worksheet B in the Instructions for Form 1116. Otherwise, you must use the instructions for Capital Gains and Losses in Pub. 514, Foreign Tax Credit for Individuals, to figure the adjustments you must make to the estate's or trust's foreign source capital gains and losses.

Use Worksheet A if the estate or trust has foreign source capital gains or losses in no more than two separate categories, and any of the following apply.

• You were not required to make adjustments to the estate's or trust's foreign source qualified dividends under the rules described earlier (or if the estate or trust had foreign source qualified dividends, you would not have been required to make those adjustments).

• Schedule D, line 14a, column (2) or line 15, column (2), as refigured for the AMT if necessary, is zero or a loss.

• On the AMT Schedule D Tax Worksheet for Form 1041, a) line 17 is zero, b) line 9 is zero, or c) line 34 is equal to or greater than line 35.

• On the AMT Part V of Schedule D (Form 1041), a) line 18 of that AMT Part V minus the amount on Form 4952, line 4e, that you elected to include on Form 4952, line 4g, is zero or less, b) line 23 of that AMT Part V is zero, or c) line 32 of that AMT Part V is equal to or greater than line 33.

Use Worksheet B if you:

• Cannot use Worksheet A,

• Have foreign source capital gains and losses in no more than two separate categories,

• Did not have any item of unrecaptured section 1250 gain or any item of 28% rate gain or loss for either regular tax or AMT, and

• Did not have any capital gains taxed at a rate of 0%.

Instructions for Worksheets A and B.

When you complete Worksheet A or B, use foreign source capital gains and losses as refigured for the AMT, if necessary, and do not use any foreign source capital gains that you elected to include on line 4g of the AMT Form 4952. If you must complete a Schedule D for the AMT, use line 15 of that AMT Schedule D to complete line 3 of Worksheet A or Line 4 or the Line 2 Worksheet for Worksheet B. Use 0.5357 instead of 0.4286 to complete lines 11, 13, and 15 of Worksheet B and to complete lines 8, 11, and 17 of the Line 15 Worksheet for Worksheet B.

If the estate or trust does not qualify to use Worksheet A or Worksheet B, use the instructions for Capital Gains and Losses in Pub. 514 to determine the adjustments you make.

If you used Schedule D (Form 1041), the Schedule D Tax Worksheet, or the Qualified Dividend Tax Worksheet, you generally may enter the amounts as instructed on Schedule I, lines 58, 59, and 60. But do not use those amounts if any of the following apply.

If 1 or 3 above applies, complete Parts I through IV of an AMT Schedule D (Form 1041) by refiguring the amounts of your gains and losses for the AMT. Next, if 1, 2, or 3 above applies, complete the following lines of the applicable schedule or worksheet:

If you were required to complete an AMT Form 4952, use it to figure the amount to enter on line 21 of the AMT Schedule D (Form 1041), lines 3 and 4 of the AMT Schedule D Tax Worksheet, and line 3 of the Tax Worksheet. Use amounts from the AMT Schedule D (Form 1041), AMT Schedule D Tax Worksheet, or Qualified Dividends Tax Worksheet to complete Schedule I, lines 58, 59, and 60. Keep the AMT Schedule D (Form 1041) and worksheet for your records. Do not attach the AMT Schedule D (Form 1041) to Form 1041.