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Posted by Mcahi Goughs on March 22, 2008, 10:26 am
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D. Stussy wrote:
>> Arthur Kamlet wrote:
>>>> I am struggling to complete form 6251, Alternative Minimum
>>>> Tax—Individuals. Specifically, I've hit a roadblock with Line 18 -
>>>> Passive Activities. I've read the instructions multiple times and have
>>>> even called the IRS 800 number with no luck.
>>>>
>>>> It is my understanding that I must refigure Schedule E for the AMT.
>>>> However, I do not know what exactly on Schedule E is a 'non-allowed
>>>> adjustment' for the AMT.
>>>>
>>>> Potentially useful info:
>>>> I have an owner-occupied, multi-unit residential rental property
>>>> (passive activity) that has a net loss less than $25,000. I've also
>>>> filled out form 8582, and my passive activity loss is not limited.
>>>
>>> Here's an example:
>>>
>>>
>>> If you have any assets, such as appliances or carpeting, that you
>>> are using e.g., MACRS 5 or 7 yr class life, 200DB, then for AMT that
>>> would decrease to 150DB.
>>>
>>>
>>> Which changes your depreciation form 4562 and your depreciation
>>> on the E, and your passive loss form, and so each of these forms
>>> would have both a regular income tax and an AMT version. The AMT
>>> versions are used for AMT tax calculation.
>> Thank you for the example. It is very helpful. I had no idea I had to
>> revisit form 4562. Are the assets the only item to adjust? What about
>> mortgage interest and taxes reported as expenses on Schedule E?
>
> Property taxes are permitted and generally, mortgage interest doesn't
> change. However, if you used any part of the mortgage for non-rental
> property purposes, you may have an adjustment.
>
Thank you. I've already adjusted out my non-rental usage across the
board, so I should be ok in that regards.
I was able to complete the forms but I'm not as confident about filing
as I have been in the past. I am considering purchasing tax software
(TaxCut) to verify my forms. I've used the software before, but not
since I put my rentals into service in 2005. Has anyone had experience
with tax software & rentals? The TaxCut web site claims that the
software supports Schedule E and form 6251, so I might give it a shot
since it's only $20.
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