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Posted by Mcahi Goughs on March 25, 2008, 3:47 pm
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Mcahi Goughs wrote:
>
>
> 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.
>
I ended up purchasing TurboTax (couldn't find a federal-only version of
TaxCut). I found it very helpful in completing/validating 8582 & 6251.
I had my depreciation schedules handy, though. Without them I think
it would have been more difficult.
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