A qualified taxpayer must exclude income, positive and negative adjustments, and preference items attributable to any trade or business when figuring AMTI.
- These adjustments and preference items must also be excluded when calculating any deductions that may result in AMT carryovers.
- Item G in the Schedule P instructions explains the AMTI exclusion and who qualifies.
You are a qualified taxpayer if you meet both of the following:
- Own or have an ownership interest in a trade or business.
- Have aggregate gross receipts (less returns and allowances), during the taxable year of less than $1,000,000 from all trades or businesses for which you are the owner or have an ownership interest.
- Gross receipts may include, but aren't limited to, items reported on the following 1040-associated forms:
- Schedule C, Profit or Loss from Business
- Schedule D, Capital Gains and Losses
- Schedule E, Supplemental Income and Loss (other than income from a trust)
- Schedule F, Profit or Loss from Farming
- Federal Form 4797, Sales of Business Property (figured in accordance with California law)
- California Schedule D-1, Sales of Business Property, (if required to complete it) that are associated with a trade or business.
- In the case of an ownership interest, you include only the proportional share of gross receipts of any trade or business from a partnership, S corporation, regulated investment company (RIC), a real estate investment trust (REIT), or real estate mortgage investment conduit (REMIC) in accordance with your ownership interest in the enterprise.
- Apply the $1,000,000 test to the return regardless of filing status. The threshold doesn't become $2,000,000 for married/RDP taxpayers filing jointly.