Alternative Minimum Tax - Credit

Credit: Creation, Usage and Limitations
What is the only tax credit allowed against AMT?
The only credit allowed on AMT Form 6251 when computing your AMT tax liability is a credit for foreign AMT income.

AMT Tax Credit from Your Regular Tax
Once you've computed and paid your AMT tax liability, you may be able to reduce your regular tax by an AMT tax credit that can be used on future regular tax returns. It can be carried forward indefinitely until used.

Limitations: Prior year AMT tax has to be generated from "deferral items" in order to qualify for the AMT credit. Deferral items like passive activity losses, depreciation and incentive stock options would all provide a temporary reduction to taxable income.

Calculation of the credit: the credit is computed on Form 8801. If your regular tax liability (reduced by allowable tax credits), exceeds tentative AMT liability (from Form 6251), then the credit is normally allowed. Application to Businesses and Trusts


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