IRS Form 8801
If you paid AMT in prior years, then this article is of importance to you as you. You may be eligible for a tax credit for Alternative Minimum Tax paid in a prior year.
As you may know, the Form 6251, Alternative Minimum Tax – Individuals is one of two main forms used for AMT (Alternative Minimum Tax). The other being the Form 8801.
The Form 8801 is used to calculate your Minimum Tax Credit for AMT that you incurred in prior tax years and to figure any credit carryforward.
Credit For Paying The AMT
Two types of adjustments and preference items cause the AMT: deferral items and exclusion items.
Deferral items, such as depreciation, generally do not cause a permanent difference in taxable income over time.
However, exclusion items such as the standard deduction do cause a permanent difference.
The distinction is important as the minimum tax credit is allowed only for the AMT caused by deferral items. Only deferral items can generate credit for future years, as opposed to exclusion items, which are not deductible for AMT and as a result are lost.
To calculate and report the Prior Year Minimum Tax Credit, the Form 8801, Credit for Prior Year Minimum Tax – Individuals, Estates and Trusts will need to be prepared and filed.
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