Section references are to the Internal Revenue Code unless otherwise noted.
Use Form 8801 if you are an individual, estate, or trust to figure the current year nonrefundable credit, if any, for alternative minimum tax (AMT) you incurred in prior tax years; to figure the current year refundable credit (individuals only), if any, for any unused credit carryforward from 2004; and to figure any credit carryforward to 2008.
Complete Form 8801 if you are an individual, estate, or trust that for 2006 had:
File Form 8801 only if line 21 is more than zero.
The AMT is caused by two types of adjustments and preferences—deferral items and exclusion items. Deferral items (for example, depreciation) generally do not cause a permanent difference in taxable income over time. Exclusion items (for example, the standard deduction), on the other hand, do cause a permanent difference. The minimum tax credit is allowed only for the AMT caused by deferral items.
Skip lines 1 through 3 of Form 8801. Complete Parts I and II of another 2006 Form 1041, Schedule I. For Part I of Schedule I, take into account only exclusion items (the amounts included on lines 2 through 6, 8, and 9, and any other adjustments related to exclusion items included on line 23 of Schedule I). On line 24 of Schedule I, use the minimum tax credit net operating loss deduction (MTCNOLD). However, do not limit the MTCNOLD to 90% of the total of lines 1 through 23 of Schedule I. (See the instructions for line 3 on this page for how to figure the MTCNOLD.) In Part II of Schedule I, complete lines 35 and 36 without taking into account any basis adjustments arising from deferral items. If the amount on Schedule I, line 29, is zero or less, enter -0- on Form 8801, line 4. Otherwise, enter on Form 8801, line 4, the amount from Schedule I, line 29, adjusted for exclusion items that were allocated to the beneficiary.
Enter on this line the adjustments and preferences treated as exclusion items (except the standard deduction). Exclusion items are only the following AMT adjustments and preferences: itemized deductions (including any investment interest expense reported on Schedule E), certain tax-exempt interest, depletion, the section 1202 exclusion, and any other adjustments related to exclusion items. Do not include the standard deduction. It has already been included on line 1. Combine lines 2 through 5, 7 through 9, 11, and 12 of your 2006 Form 6251. Do not include any amount from line 14 of the 2006 Form 6251. Instead, include the exclusion item amount from the Schedule(s) K-1 (Form 1041) you received for 2006. That amount is shown in box 12 with code J. If you included on line 26 of the 2006 Form 6251 any adjustments related to exclusion items, also include those adjustments in the amount you enter on line 2. Enter the total on line 2.
Exclusion items on other lines. If you included any exclusion item on a line not listed above, include that item in the amount you enter on line 2. For example, if depletion was included on Form 6251 as an adjustment on line 18 (passive activities) instead of on line 9 (depletion), include it as an exclusion item in the amount you enter on line 2.
Your minimum tax credit net operating loss deduction (MTCNOLD) is the total of the minimum tax credit net operating loss (MTCNOL) carryovers and carrybacks to 2006. Your MTCNOL is figured as follows.
Your MTCNOL is the excess of the deductions (excluding the MTCNOLD) over the income used to figure alternative minimum taxable income (AMTI) taking into account only exclusion items. Figure this excess with the modifications in section 172(d) taking into account only exclusion items. (That is, the section 172(d) modifications must be figured separately for the MTCNOL.)
For example, the limitation of nonbusiness deductions to the amount of nonbusiness income must be figured separately for the MTCNOL using only nonbusiness income and deductions but taking into account only exclusion items. However, ignore the disallowance of the deduction for personal exemptions under section 172(d)(3) because it has already been taken into account to figure AMTI attributable only to exclusion items.
To determine the amount of MTCNOL that may be carried to tax years other than 2006, apply sections 172(b)(2) and 172(d) with appropriate modifications to take into account only exclusion items.
If your filing status was married filing separately for 2006 and line 4 is more than $200,100, you must include an additional amount on line 4. If line 4 is $325,200 or more, include an additional $31,275 on line 4. Otherwise, include 25% of the excess of the amount on line 4 over $200,100. For example, if the amount on line 4 is $220,100, enter $225,100 instead—the additional $5,000 is 25% of $20,000 ($220,100 minus $200,100).
If this form is for a child who was under age 18 at the end of 2006, did not file a joint return for 2006, and at least one of the child's parents was alive at the end of 2006, do not enter more than the sum of the child's 2006 earned income plus $6,050.
A child born on January 1, 1989, is considered to be age 18 at the end of 2006 and is therefore not subject to this limitation.
If you filed Form 1040NR for 2006 and had a net gain on the disposition of U.S. real property interests, line 10 cannot be less than the smaller of that net gain or line 4.
If for 2006 you claimed the foreign earned income exclusion or the housing exclusion on Form 2555 or Form 2555-EZ, you must use the worksheet below to figure the amount to enter on line 11.
Foreign Earned Income Tax Worksheet—Line 11
Keep for Your Records
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1. Enter the amount from Form 8801, line 4 1. ____
2. Enter the amount from Form 8801, line 9 2. ____
3. Subtract line 2 from line 1. If less
than zero, enter as a negative amount 3. ____
4. Enter the amount from your (and your
spouse's if filing jointly) 2006
Form 2555, line 45, or 2006
Form 2555-EZ, line 18 4. ____
5. Enter the total amount of any
itemized deductions you could not
claim for 2006 because they were
related to excluded income 5. ____
6. Subtract line 5 from line 4. If zero or less,
enter -0- 6. ____
7. Combine lines 3 and 6. If zero or less, enter
-0- 7. ____
8. Tax on amount on line 7.
• If for 2006 you reported capital gain }
distributions directly on Form 1040, line 13; }
you reported qualified dividends on Form 1040, }
line 9b; or you had a gain on both lines 15 }
and 16 of Schedule D (Form 1040), enter the }
amount from line 7 of this worksheet on }
Form 8801, line 29. Then complete the rest of }
Part III of Form 8801 and enter the amount }
from line 48 here. } 8. ____
}
• All others: If line 7 is $175,000 or less }
($87,500 or less if married filing separately }
for 2006), multiply line 7 by 26% (.26). }
Otherwise, multiply line 7 by 28% (.28) and }
subtract $3,500 ($1,750 if married filing }
separately for 2006) from the result }
9. Tax on amount on line 6. If line 6 is $175,000 or less
($87,500 or less if married filing separately for
2006), multiply line 6 by 26% (.26). Otherwise,
multiply line 6 by 28% (.28) and subtract $3,500
($1,750 if married filing separately for 2006) from
the result 9. ____
10. Subtract line 9 from line 8. Enter here and on
Form 8801, line 11. If zero or less, enter -0- 10. ____
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Form 1040NR. If for 2006 you filed Form 1040NR and you reported capital gain distributions directly on Form 1040NR, line 14; you reported qualified dividends on Form 1040NR, line 10b; or you had a gain on both lines 15 and 16 of Schedule D (Form 1040), complete Part III on page 2 of Form 8801 and enter the amount from line 48 on line 11. Otherwise, do not complete Part III. Instead, if Form 8801, line 10, is $175,000 or less ($87,500 or less if you checked filing status box 3, 4, or 5 on Form 1040NR for 2006), figure the amount to enter on line 11 by multiplying line 10 by 26% (.26). Otherwise, figure the amount to enter on line 11 by multiplying line 10 by 28% (.28) and subtracting $3,500 ($1,750 if you checked filing status box 3, 4, or 5 for 2006) from the result.
If you made an election to claim the foreign tax credit on your 2006 Form 1040 (or Form 1040NR) without filing Form 1116, enter on Form 8801, line 12, the amount from your 2006 Form 1040, line 47 (or Form 1040NR, line 44). Otherwise, the minimum tax foreign tax credit on exclusion items (MTFTCE) is your 2006 AMT foreign tax credit (AMTFTC) refigured using only exclusion items. Follow these steps to figure your MTFTCE.
Step 1. Use a separate 2006 Form 1116 for the MTFTCE for each separate category of income specified at the top of Form 1116.
When applying the separate categories of income, use the applicable AMT rate instead of the regular tax rate to determine if any income is "high-taxed."
Step 2. If you figured your 2006 AMTFTC using the simplified limitation election, skip Part I and enter on the MTFTCE Form 1116, line 16, the same amount you entered on that line for the 2006 AMT Form 1116. Otherwise, complete Part I using only taxable income and exclusion items that are attributable to sources outside the United States. If you had any 2006 foreign source qualified dividends or foreign source capital gains (including any foreign source capital gain distributions) or losses, use the instructions under Step 3 to determine whether you must make adjustments to those amounts before you include the amounts on line 1a or line 5 of the MTFTCE Form 1116.
Step 3. Follow the instructions below, if applicable, to determine the amount of foreign source qualified dividends, capital gain distributions, and other capital gains and losses to include on line 1a and line 5 of the MTFTCE Form 1116.
Foreign qualified dividends. You must adjust your foreign source qualified dividends before you include those amounts on line 1a of the MTFTCE Form 1116 if:
But you do not need to make any adjustments if:
To adjust your foreign source qualified dividends, multiply your foreign source qualified dividends in each separate category by 0.5357. Include the results on line 1a of the applicable MTFTCE Form 1116. But do not adjust the amount of any foreign source qualified dividend you elected to include on line 4g of Form 4952.
Individuals with capital gain distributions only. If you had no 2006 capital gains or losses other than capital gain distributions from box 2a of Form(s) 1099-DIV or substitute statement(s), you must adjust your foreign source capital gain distributions before you include those amounts on line 1a of the MTFTCE Form 1116 if you are required to adjust your foreign source qualified dividends under the rules just described or you would be required to adjust your foreign source qualified dividends if you had any.
To adjust your foreign source capital gain distributions, multiply your foreign source capital gain distributions in each separate category by 0.5357. Include the results on line 1a of the applicable MTFTCE Form 1116. But do not adjust the amount of any foreign source capital gain distribution you elected to include on line 4g of Form 4952.
Other capital gains or losses. Use Worksheet A in the instructions for the 2006 Form 1116 to determine the adjustments you must make to your foreign source capital gains or losses if you have foreign source capital gains or losses in no more than two separate categories and any of the following apply.
Use Worksheet B if you:
Instructions for Worksheets A and B. When you complete Worksheet A or Worksheet B, do not use any foreign source capital gains you elected to include on line 4g of Form 4952. 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 you do 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.
Step 4. Complete lines 9 through 13 of the MTFTCE Form 1116. For line 9, use the same amount you entered on that line for 2006 for the regular tax. Use your MTFTCE carryover, if any, on line 10.
Step 5. If you did not figure your 2006 AMTFTC using the simplified limitation election, complete lines 14 through 16 of the MTFTCE Form 1116.
Step 6. If you did not complete Part III of Form 8801, enter the amount from Form 8801, line 4, on line 17 of the MTFTCE Form 1116 and go to Step 7. If you completed Part III of Form 8801, you must complete, for the MTFTCE, the Worksheet for Line 17 in the Form 1116 instructions to determine the amount to enter on line 17 of the MTFTCE Form 1116 if:
But you do not need to complete the Worksheet for Line 17 if:
If you do not need to complete the Worksheet for Line 17, enter the amount from line 4 of Form 8801 on line 17 of the MTFTCE Form 1116.
Instructions for MTFTCE Worksheet for Line 17. Follow these steps to complete, for the MTFTCE, the Worksheet for Line 17 in the Form 1116 instructions.
Step 7. Enter the amount from Form 8801, line 11, on the MTFTCE Form 1116, line 19. Complete lines 18, 20, and 21 of the MTFTCE Form 1116.
Step 8. Complete Part IV of the first MTFTCE Form 1116 only. Enter the amount from that MTFTCE Form 1116, line 33, on Form 8801, line 12.
Step 9. Keep all Forms 1116 you used to figure your MTFTCE, but do not attach them to your tax return.
If line 13 of the MTFTCE Form 1116 is greater than line 20 of the MTFTCE Form 1116, keep a record of the difference. This amount is carried forward and used to figure your MTFTCE next year.
Enter any qualified electric vehicle credit not allowed for 2006 solely because of the limitation under section 30(b)(3)(B).
If line 21 is zero or less, you do not have a nonrefundable or refundable credit or a credit carryforward. Do not complete the rest of this form and do not file it.
Follow the instructions below and refer to your 2007 income tax return to figure the amount to enter on line 22.
Form 1040. Subtract from the amount on line 44 the total of any credits on lines 47 through 55 (not including any credit for prior year minimum tax, clean renewable energy bond credit, and credit for Gulf tax credit bonds). If the result is zero or less, enter -0-.
Form 1040NR. Subtract from the amount on line 41 the total of any credits on lines 44 through 50 (not including any credit for prior year minimum tax, clean renewable energy bond credit, and credit for Gulf tax credit bonds). If the result is zero or less, enter -0-.
Form 1041, Schedule G. Subtract the total of any credits on lines 2a through 2c from the sum of lines 1a and 1b. If the result is zero or less, enter -0-.
If your 2006 taxable income was zero or less, complete lines 2 through 6 of the 2006 Qualified Dividends and Capital Gain Tax Worksheet, lines 18 through 22 of the 2006 Schedule D (Form 1041), or lines 2 through 13 of the 2006 Schedule D Tax Worksheet, whichever applies, before completing Part III.
Form 1040NR. If you figured your 2006 tax using the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040NR instructions, enter the amount from line 4 of that worksheet on Form 8801, lines 30 and 32; skip Form 8801, line 31; and enter on Form 8801, line 37, the amount from line 5 of that worksheet.
Estates and trusts. If you figured your 2006 tax using the Qualified Dividends Tax Worksheet in the Form 1041 instructions, enter the amount from line 4 of that worksheet on Form 8801, lines 30 and 32; skip Form 8801, line 31; and enter on Form 8801, line 37, the amount from line 5 of that worksheet.
If for 2006 you filed Form 1040NR and Form 8801, line 34, is $175,000 or less ($87,500 or less if you checked filing status box 3, 4, or 5 on Form 1040NR for 2006), multiply line 34 by 26% (.26). Otherwise, multiply line 34 by 28% (.28) and subtract $3,500 ($1,750 if you checked filing status box 3, 4, or 5 on Form 1040NR for 2006) from the result.
If for 2006 you filed Form 1040NR, enter $30,650 ($61,300 if you checked filing status box 6 on Form 1040NR for 2006).
If for 2006 you filed Form 1040NR, enter on Form 8801, line 37, the amount from line 5 of your 2006 Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040NR, line 41, or the amount from line 14 of your 2006 Schedule D Tax Worksheet on page D-10 of the 2006 Instructions for Schedule D (Form 1040), whichever applies. If you did not complete either worksheet, enter -0-.
If for 2006 you filed Form 1040NR and Form 8801, line 29, is $175,000 or less ($87,500 or less if you checked filing status box 3, 4, or 5 on Form 1040NR for 2006), multiply line 29 by 26% (.26). Otherwise, multiply line 29 by 28% (.28) and subtract $3,500 ($1,750 if you checked filing status box 3, 4, or 5 on Form 1040NR for 2006) from the result.
If for 2006 you filed Form 2555 or Form 2555-EZ, do not enter the amount from Form 8801, line 48, on Form 8801, line 11. Instead, enter the amount from Form 8801, line 48, on line 8 of the worksheet on page 2. Then complete the rest of that worksheet to figure the amount to enter on Form 8801, line 11.
If you are filing Form 2555, Form 2555-EZ, or Form 4563, or you are excluding income from sources within Puerto Rico, you must refigure your adjusted gross income (Form 1040, line 38) by adding back any foreign earned income and housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18), foreign housing deduction (Form 2555, line 50), income from American Samoa that you are excluding (Form 4563, line 15), and income from Puerto Rico that you are excluding. Enter the result on line 56.
Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for individual taxpayers filing this form is approved under OMB control number 1545-0074 and is included in the estimates shown in the instructions for their individual income tax return. The estimated burden for all other taxpayers who file this form is shown below.
Recordkeeping 2 hr., 4 min. Learning about the law or the form 1 hr., 57 min. Preparing the form 2 hr., 3 min. Copying, assembling, and sending the 48 min. form to the IRS
If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed.