The following are the other items that will impact the AMT. However, they are usually attributable to pass-through entities generally out of the control of the individual taxpayer. Thus, there are no strategies associated with the pass-through items.

(Form 6251 – Line 2j) – This line accommodates flow through AMT adjustments from estates and trusts shown on the 1041 K-1, Box 12, Code A. The K-1 (box 12, Code J) should also indicate how much of the AMT preferences and adjustments is from exclusion items. This information is used in computing the AMT credit on the following year’s Form 8801. See “Alternative Minimum Tax Credit” discussion below.

(Form 6251 – Line 2m) – Difference between regular and AMT income or loss. The same rules that apply for limiting deductions of passive losses for regular tax purposes also apply for AMT purposes. Indefinite carryover of disallowed losses is also allowed, and full deduction is allowed in the year of a complete disposition of the activity. The AMT adjustment may be reduced by the amount of a taxpayer’s insolvency at the end of the year. AMT adjustment and tax preference items related to a passive loss activity should be accounted for when recomputing the passive activity loss and should be reflected on the passive activity loss lines of the AMT forms.

When refiguring a possible loss activity for AMT, only items that are allowed for AMT should be deducted. For example, the passive loss is recomputed using straight-line depreciation. Caution: Those same adjustments and preference items should not be accounted for again on other lines of the AMT forms.

(Form 6251 – Line 2n) – Difference between AMT and regular tax income or loss refigured for activities for which the taxpayer is not at risk or basis limitations are applicable. Generally, applies to partnerships and S corporations. The difference takes into account all AMT adjustments and preferences that apply.

(Form 6251 – Line 2o) – These are expenses of establishing, maintaining or increasing the circulation of newspapers and periodicals. They can be deducted in the year paid or incurred for regular tax purposes. The AMT adjustment is the difference between the amount allowed for regular purposes over the amount allowed by amortizing the costs ratably over a three-year period. If a taxpayer elects three-year, straight-line amortization of the costs for regular tax purposes, there is no AMT adjustment. This adjustment is rarely encountered for individual purposes except via pass-through entities.

(Form 6251 – Line 2p) – For purposes of computing alternative minimum taxable income, taxpayers must use the percentage-of-completion method of accounting for long-term contracts. For small construction contracts, under Code Sec. 460(e)(1), the percentage of the contract completed is determined by using the simplified method for allocating costs in Code Sec. 460(b)(3). This adjustment is rarely encountered for individual purposes except via pass-through entities.

(Form 6251 – Line 2q) – Mining exploration and development costs are adjusted for AMT purposes. The following deduction is allowed: the amount that results from capitalizing mine exploration and development expenditures without regard to the Code Sec. 291(b)(1) 30% cutback and amortizing them on a straight-line basis over ten years. This adjustment is rarely encountered for individual purposes except via pass-through entities.

(Form 6251 – Line 2r) – For regular tax purposes, research and experimental expenses may be deducted in the year paid or incurred, or they may be amortized on a straight-line basis over 10 years. If they are currently deducted, the AMT adjustment is the difference between that deduction and the ten-year amortization amount. This adjustment is rarely encountered for individual purposes except via pass-through entities.

(Form 6251 – Line 2s) – The instalment method does not apply for the AMT to any non-dealer disposition of property after August 16, 1986, but before January 1, 1987, if the “proportionate disallowance rule” applied to the instalment sale. Under the proportionate disallowance rule that applied to certain pre-'88 instalment sales, a portion of the taxpayer's outstanding indebtedness was treated as a constructive payment on the instalment (receivables) obligation that the taxpayer held. This is an extremely rare adjustment that will generally only be encountered via pass-through entities.

(Form 6251 – Line 2t) – This is the excess of the annual allowable expense deduction for intangible drilling and development costs in connection with oil, gas and geothermal wells, over the amount that would have been allowable had the costs been capitalized and straight-line recovery of intangibles used with respect to them. This adjustment is rarely encountered for individual purposes except via pass-through entities.

(Form 6251 – Line 3) – This is the catch-all entry for other rarely encountered adjustments not handled on other lines of the 6251 related to: depreciation figured using pre-1987 rules, pollution control facilities, tax shelter farm activities, charitable contributions of certain property, excess business loss limitation (not applicable for 2018, 2019 or 2020), business interest limitation, biofuel producer credit and biodiesel and renewable diesel fuels credit, net qualified disaster loss, and related adjustments. See Form 6251 instructions for details.