2004 Form 6251 - Kiplinger-2025

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The alternative minimum tax (AMT) credit is a reduction given to individuals who have paid alternative minimum tax in previous years. Exercising Incentive Stock Options (ISOs) often triggers AMT. Thus anyone who has exercised ISOs in years past may be eligible for AMT credits.
To figure out whether you owe any additional tax under the Alternative Minimum Tax system, you need to fill out Form 6251. If the tax calculated on Form 6251 is higher than that calculated on your regular tax return, you have to pay the difference as AMT in addition to the regularly calculated income tax.
Use Form 6251 to figure the amount, if any, of your alternative minimum tax (AMT). The AMT applies to taxpayers who have certain types of income that receive favorable treatment, or who qualify for certain deductions, under the tax law.
Go to .irs.gov/Form6251 for instructions and the latest information. Part I Alternative Minimum Taxable Income (See instructions for how to complete each line.)
AMT is relevant for the following reasons: Individuals, Hindu Undivided Family (HUF), Association of Persons (AOP), Body of Individuals (BOI), or Artificial Judicial Person with a total adjusted income above Rs 20,000,000. Everyone else, regardless of their financial level, excluding the individuals listed above.
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The AMT is the excess of the tentative minimum tax over the regular tax. Thus, the AMT is owed only if the tentative minimum tax for the year is greater than the regular tax for that year. The tentative minimum tax is figured separately from the regular tax.
Who pays the alternative minimum tax? You have an income above the AMT exemption (see above). You exercise incentive stock options (i.e., ISOs) to buy stock at a discounted strike price. You have a high ratio of long-term capital gains to ordinary income. You earn income from specific sources.
AMT Exemption Amount Thresholds (Updated for 2025) For the 2025 tax year, the AMT exemption is $88,100 for taxpayers filing as single and $137,000 for married couples filing jointly, per the IRS.

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