Common questions on Form 6251 in Lacerte

Below, you'll find answers to frequently asked questions about Form 6251, Alternative Minimum Tax - Individuals, in Lacerte. Form 6251 will automatically generate in ​​Lacerte​​ when it applies to your client's return.

Table of contents:

How do I force Form 6251 to print?

1. Go to Screen 40, Alternative Minimum Tax (6251).
2. Scroll down to the bottom of the Alternative Minimum Tax (6251) section.
3. Enter a 1 in 1=force Form 6251, 2=when applicable [O].

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Why is Form 6251 generating for an NOL carryover?

Screen 15, Net Operating Loss has inputs labeled Carryover Available in 20232023 and AMT Carryover Available in 2023. Lacerte calculates the difference between the regular and AMT carryover and can make an adjustment to form 6251 for that difference.

If an entry is made in one field but not the other, the program may interpret that as a difference. That difference can potentially trigger AMT incorrectly.

To check whether the correct entries are present:

1. Go to Screen 15, Net Operating Loss.
2. Make sure that both of these fields have an entry for every carryover year entered:
   • Carryover available in 2023
   • AMT carryover available in 2023

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How do I calculate ISO income for line 14?

The incentive stock option (ISO) income must be manually calculated using amounts from Form 3291. See Entering amounts from Form 3921 in the individual module of Lacerte for more information.

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When Form 1040, line 45 is zero, the Form 6251 will not generate because it is not required to be filed. How do I force Form 6251 to generate?

There are two ways to force the Form 6251. 

Solution #1 - Global - To force the 6251 for all client files:

1. Click on the Settings menu located on the menu bar.
2. Select Options from the dropdown menu.  This will open the User Options window.
3. Click on the Tax Return tab, located at the top of the window.
4. Click on Federal Tax Options located in the left hand column.  The Federal Tax Options section will appear at the top of the right-hand viewing pane.
5. Locate the item Form 6251.  Click the down arrow to the right of the field and select Force. 
6. Click the OK button at the bottom right of the User Options window.

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Solution #2 - Client by Client - To force the Form 6251 in a single client file:

1. In the Clients tab, open the desired client file by double-clicking on the client name or number.  The client file should open to the Table of Contents in the Detail tab.
2. Select Screen 40, Alternative Minimum Tax, from the table of contents.
3. Enter a '1' in the field 1 = force Form 6251, 2 = when applicable [O] (code 28).
4. Click on the Forms tab to calculate the return and view the Form 6251.

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The IRS challenged the Lacerte Program's calculation of Line 35. The IRS believes the calculation is too low.

The Lacerte Program pulls the number from the Form 1040 Tax line per the 6251 instructions.

The 1040 Tax calculation may come from the following situations. These are calculations from Forms 8814, 4972 or the Schedule D Tax Worksheet, or the Qualified Dividends and Capital Gain Tax Worksheet. Particularly with the Worksheets the tax on the 1040 will be smaller than if calculated from using the Tax Tables. Thus, the 6251 will be lower than if the 1040 Tax is calculated using the Tax Tables.

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How do I enter private activity bond interest or dividend income amounts for form 6251?

Solution #1 - To enter interest income amounts for private activity bonds for form 6251 for:

1. Go to Screen 11, Interest Income.
2. Click on Add from the left navigation panel.
3. Enter the information as reported on the 1099-INT.
4. Scroll down to the Form 1099-INT section.
5. Locate the Tax-Exempt Interest subsection.
6. Enter the Enter the Specified private activity bond interest included above (6251).

Solution #2- To enter dividend income amounts for private activity bonds for form 6251 for:

1. Go to Screen 12, Dividend Income.
2. Click on Add from the left navigation panel.
3. Enter the information as reported on the 1099-DIV.
4. Scroll down to the Form 1099-DIV section.
5. Locate the Tax-Exempt Interest subsection.
6. Enter the Certain private activity bonds included above (6251) (% or amount).

   Note: Because the input field allows either a percentage or amount, the field will interpret a 1 to mean 100% rather than only $1. To enter only $1, you must enter it as 1.0000001.

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Form 6251 Line 19 Passive Activities with Section 59(e)(2) Expense AMT Difference Calculation

For Line 13(J) expenses, the tax preference adjustment is the difference between the full expense and the amortized expense amount.

• The program calculates the amortization expense using the appropriate code and life as determined by the input on Screen 20.1 Partnership Information, Line 13 - Other Deductions section, (J) Section 59(e) (2) Expenses,  Type of expenses (Ctrl+T), code 849.

If the type of expense is intangible drilling costs;

• The program does not calculate the excess and an entry is required in Excess intangible drilling costs, (Screen 20, Code 31).

The program will create an asset in the depreciation screen during proforma to capture the amortization amounts that are deductible in subsequent years for AMT purposes only and report as an AMT adjustment for passive activities.

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