Residential landlords and Form 6251

Dec 05, 2015 4 Replies
I

I just came across this in the instructions for Form 1040, line 45:



Exception. Fill in Form 6251 instead of using the worksheet if you claimed or received any of the following items.



...



  • Income or (loss) from tax-shelter farm activities, passive activities, partnerships, S corporations, or activities for which you aren't at risk.

I know that owning residential rental properties is a passive activity, but I've owned rental properties for several years, and TaxAct has never generated a Form 6251, and the IRS has never complained about their absence.



Can anyone explain this (apparent) discrepancy?


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A

The advice says to fill in form 6251. It didn't say you had to file it....

And it's quite possible that TaxAct has a simplified worksheet, which it uses to determine you don't need to file form 6251.

On the other hand, it may be the case that your depreciation for regular tax purposes is greater than your depreciation for AMT purposes, so you really do need to fill in form 6251 to see that you are not subject to AMT.

-- Arthur L. Rubin CRTP, AFSP in Brea, CA

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I

Ah. It had never occurred to me to fill in a form in order to determine whether you need to fill in the form. I guess that it makes sense in a twisted sort of way ...

Thanks!

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S

It's actually much more common than you would think.

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T

On occasion, I have been asked by the IRS to fill in the form, and send it in, showing that I didn't need to send in the form.

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