AMT adjustment in year of sale

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  • Kram BergGold
    Senior Member
    • Jun 2006
    • 2112

    #1

    AMT adjustment in year of sale

    My client is selling a rental property. In the first 10 years of ownership they deducted losses. For the next11 years all losses were suspended due to high income. MY software is showing a 50,000 positive passive activities AMT adjustment (line 18) which is clearly wrong.
    Should't this adjustment be an amount based on the difference between the regular depreciation claimed and the AMT depreciation claimed for those years that losses were suspended? And then wouldn't there be an adjustment on line 16 based on the depreciation differences for those years that losses were not suspended?
  • Bees Knees
    Senior Member
    • May 2005
    • 5456

    #2
    You are correct. The amounts for lines 16 and 18 need to reflect the difference between regular tax and AMT rules on basis and passive activity loss limits. That means going back all those years and re-calculating passive losses using AMT rules, and basis of the property using AMT rules. More than likely, your software cannot handle that and it needs to be a manual adjustment made by you using your own computations.

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