How to File IRS Form 6251 for AMT Adjustments for Private Activity Bond Interest Income

The Alternative Minimum Tax (AMT) is designed to act as a floor that requires U.S. taxpayers to pay a minimum tax on income. For most taxpayers, the AMT will never apply; however, it may happen to you if you exercise stock options with your employer.
In this example, the taxpayer has many investments in municipal bonds, which pay tax-exempt interest during the year. A large portion of the tax-exempt interest income is attributed to private activity bond interest. The taxpayer must complete Form 6251 and account for the tax-exempt private activity bond interest income, resulting in an AMT amount.
AMT Adjustments for Incentive Stock Options (ISO): • IRS Form 6251 Alternat...
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