AMT Adjustments to Capital Gain/Loss on Assets

You have an AMT adjustment to capital gains or losses if:

1. You sold a business asset that you were required to depreciate using a slower depreciation method for AMT purposes. Due to the slower AMT depreciation method, the basis of the asset will be higher for AMT purposes than for regular income tax purposes.

2. If you exercised an incentive stock option in a prior year but did not sell the stock in the same year, the amount you included in your AMT income in the prior year increases your basis in the stock for AMT purposes.

3. In both cases, when you sell the asset or stock, your higher AMT basis results in a lower capital gain or greater capital loss for AMT purposes than for regular tax purposes. The overall difference in the gain or loss for AMT purposes and regular income tax purposes is your AMT adjustment for capital gain or loss.