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

You May Also Like

Related Articles
  1. Entrepreneurship

    Fed Raising Rates Affects Startup Funding

  2. Professionals

    Risks to Consider When Investing in ...

  3. Personal Finance

    Why Cash Could Be Your Best Bet

  4. Options & Futures

    Options Strategies That Profit From ...

  5. Personal Finance

    Top Spots to Wine and Dine Clients in ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!