2018 Form 6251 Checklist: Alternative Minimum Tax—Individuals
Purpose and Overview
Form 6251 calculates the alternative minimum tax for individuals whose tax benefits exceed statutory limits. The Tax Cuts and Jobs Act restructured the 2018 AMT calculation by changing the starting point to taxable income from Form 1040 line 10, streamlining itemized deduction adjustments to cover only state and local income taxes plus foreign income taxes, and increasing exemption amounts to $70,300 for single filers, $109,400 for married filing jointly, and $54,700 for married filing separately.
The 2018 form eliminates most itemized deduction adjustments that existed in prior years. You must complete Form 6251 if your tentative minimum tax exceeds your regular tax, if you claim certain business credits with limitations, if you claim the qualified electric vehicle credit, if you claim the personal use portion of the alternative fuel vehicle refueling property credit, or if you claim the credit for prior year minimum tax.
Alternative Minimum Taxable Income Calculation
Line 1: Starting Point for AMTI
You begin the AMTI calculation with your taxable income from Form 1040 line 10 if that amount exceeds zero. If your Form 1040 line 10 equals zero, you recalculate by starting with adjusted gross income and subtracting itemized deductions or the standard deduction and the qualified business income deduction. This line structure represents a fundamental change from pre-2018 methodology and applies to all returns filed for tax year 2018 and later.
Line 2a: State and Local Tax Adjustments
- If you itemized deductions on Schedule A, you adjust only state and local income taxes and foreign income taxes when calculating AMTI.
- Under 2018 rules, you make no AMT adjustment for mortgage interest, charitable contributions, or medical expenses unless those items appear on other specific lines of Form 6251.
- If you did not itemize deductions, you enter your standard deduction amount from Form 1040 line 8 on line 2a because the standard deduction does not reduce AMTI.
- If you filed Schedule A solely to claim an increased standard deduction for a net qualified disaster loss, you enter zero on line 2a and include the standard deduction amount before the disaster loss increase on line 3.
Line 2c: Investment Interest Expense
You complete a second Form 4952 for AMT purposes that includes tax-exempt interest from private activity bonds in gross income when determining investment income. The adjustment equals the difference between line 8 of your AMT Form 4952 and line 8 of your regular tax Form 4952. You enter this difference as a negative amount if the AMT expense exceeds the regular tax expense.
Line 2g: Private Activity Bond Interest
You enter interest from specified private activity bonds issued after August 7, 1986, reduced by any deductions allowable if the interest were taxable. Bonds issued in 2009 or 2010 receive an exemption from AMT treatment under the American Recovery and Reinvestment Act and do not generate an adjustment on this line. You also include exempt-interest dividends from mutual funds or regulated investment companies to the extent those dividends derive from private activity bond interest the company received.
Line 2l: Post-1998 Depreciation Adjustments
- For property placed in service after 1998 that uses the 200 percent declining balance method for regular tax, you must switch to the 150 percent declining balance method for AMT calculations.
- Qualified property eligible for the special depreciation allowance requires no AMT adjustment if the depreciable basis remains identical for both AMT and regular tax purposes.
- This rule applies to disaster assistance property, reuse and recycling property, and other categories eligible for bonus depreciation under the 2018 regulations.
- Property placed in service before 1999 follows alternative depreciation system rules with specific recovery periods and conventions detailed in Publication 946.
Line 2m: Passive Activity Loss Adjustments
You refigure passive activity gains and losses using all AMT adjustments and preferences, plus any AMT prior year unallowed losses applicable to each activity. You complete an AMT version of Form 8582 to determine the allowable passive activity loss for AMT purposes, retaining that form in your records without filing it with your return. The adjustment equals the difference between the AMT calculation and the regular tax amount, entered as a negative amount if the AMT loss exceeds the regular tax loss or if you report an AMT loss with a regular tax gain.
Exemption Amounts and Tax Calculation
Line 5: 2018 Exemption Amounts and Phaseout Rules
The 2018 exemption amounts are $70,300 for single and head of household filers, $109,400 for married filing jointly and qualifying widow or widower, and $54,700 for married filing separately. The exemption begins phasing out at $500,000 of AMTI for single and head of household filers and at $1,000,000 for married filing jointly. You must complete the Exemption Worksheet in the Form 6251 instructions if your AMTI exceeds the phaseout threshold applicable to your filing status.
Lines 7, 18, and 39: AMT Tax Bracket Application
- The 26 percent tax rate applies to the first $191,100 of taxable excess for all filing statuses except married filing separately.
- For married filing separately status, the 26 percent rate applies to the first $95,550 of taxable excess.
- The 28 percent rate applies to all taxable excess amounts above these thresholds.
These brackets and breakpoint amounts reflect changes enacted in the Tax Cuts and Jobs Act and remain specific to tax years 2018 through 2025.
Foreign Tax Credit and Capital Gains
Line 8: Alternative Minimum Tax Foreign Tax Credit
If your tentative minimum tax on line 9 exceeds your regular tax on line 10, you complete separate AMT versions of Form 1116 for each category of foreign source income using AMT income and deductions. For taxpayers who elected to claim the foreign tax credit without filing Form 1116 in 2018, any unused AMT foreign tax credit cannot be carried back or forward to other tax years. Additionally, you cannot claim the unused AMT foreign tax credit from another year in 2018 if you made the simplified election on your regular return.
Part III: Capital Gains and Qualified Dividends
You complete Part III if your capital gains, qualified dividends, or passive activity gains differ between regular tax and AMT due to basis differences or loss limitation adjustments. You prepare an AMT version of Schedule D and the Qualified Dividends and Capital Gain Tax Worksheet, keeping these worksheets with your records for documentation purposes. The AMT calculation may produce different capital loss limitations, creating separate capital loss carryover amounts that you track independently from regular tax carryovers.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
