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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
income for regular tax purposes. Each payer of this type of Line 10—Other Estates and Trusts
interest should send a Form 1099-INT, Interest Income, to the If the estate or trust is the beneficiary of another estate or
estate or trust showing the amount of this interest in box 9. trust, enter the adjustment for minimum tax purposes from
Generally, specified private activity bonds are any qualified box 12, code A, Schedule K-1 (Form 1041).
bonds (as defined in section 141) issued after August 7,
1986, and before 2009 or after 2010, the interest on which ESBTs. Enter an amount on this line only if the S corporation
isn't includible in gross income for the regular tax. See was a beneficiary of an estate or trust, received a
section 57(a)(5) for more information. Schedule K-1 (Form 1041) from the estate or trust with an
entry in box 12, code A, and the S corporation allocated a
Don’t include interest on qualified New York Liberty Bonds, portion of the box 12, code A, amount to the ESBT. See
qualified Gulf Opportunity Zone bonds, qualified Midwestern Schedule K-1 (Form 1120-S), box 15, code F.
disaster area bonds, or qualified Hurricane Ike disaster area
bonds. Line 11—Disposition of Property
Exempt-interest dividends paid by a regulated investment Use this line to report any AMT adjustment related to the
company are treated as interest from specified private activity disposition of property resulting from refiguring:
bonds to the extent the dividends are attributable to interest 1. Gain or loss from the sale, exchange, or involuntary
on the bonds received by the company, minus an allocable conversion of property reported on Form 4797, Sales of
share of the expenses paid or incurred by the company in Business Property;
earning the interest. This amount should also be reported to
the estate or trust on Form 1099-DIV in box 13. 2. Casualty gain or loss to business or income-producing
property reported on Form 4684, Casualties and Thefts;
Line 8—Qualified Small Business Stock
3. Ordinary income from the disposition of property not
If the estate or trust claimed the exclusion under section 1202 taken into account in 1 or 2 above or on any other line on
for gain on qualified small business stock acquired before Schedule I (Form 1041), such as a disqualifying
September 28, 2010, and held more than 5 years, multiply disposition of stock acquired in a prior year by exercising
the excluded gain (as shown on Form 8949 in column (g)) by an incentive stock option; and
7% (0.07). Enter the result on line 8 as a positive amount.
4. Capital gain or loss (including any carryover that is
Line 9—Exercise of Incentive Stock Options different for the AMT) reported on Form 8949, Sales and
For regular tax purposes, no income is recognized when an Other Dispositions of Capital Assets, or Schedule D
incentive stock option (as defined in section 422(b)) is (Form 1041), Capital Gains and Losses.
exercised. However, this rule doesn't apply for AMT The $3,000 capital loss limitation for the regular
purposes. Instead, the estate or trust must generally include ! tax applies separately for the AMT.
on line 9 the excess, if any, of: CAUTION
1. The fair market value (FMV) of the stock acquired First, figure any ordinary income adjustment related to 3,
through exercise of the option (determined without earlier. Then, refigure Form 4684, Form 4797, Form 8949,
regard to any lapse restriction) when its rights in the and Schedule D (Form 1041) for the AMT, if applicable, by
acquired stock first become transferable or when these taking into account any adjustments you made this year or in
rights are no longer subject to a substantial risk of previous years that affect the estate's or trust's basis or
forfeiture, over otherwise result in a different amount for AMT. When you
2. The amount paid for the stock, including any amount refigure your gain or loss on Form 8949 for AMT, the amount
paid for the option used to acquire the stock. of gain you elected to defer for regular tax purposes due to an
investment in a qualified opportunity fund may need to be
Even if the estate's or trust's rights in the stock aren't adjusted on your AMT Form 8949. An adjustment may be
TIP transferable and are subject to a substantial risk of required if the regular tax and AMT adjusted basis of the
forfeiture, you may elect to include in AMT income property you sold prior to your investment is different.
the excess of the stock's FMV (determined without regard to
any lapse restriction) over the exercise price upon the transfer If the estate or trust has a capital loss after refiguring
to the estate or trust of the stock acquired through exercise of Schedule D for the AMT, apply the $3,000 capital loss
the option. See section 83(b) for more details. The election limitation separately to the AMT loss. For each of the four
must be made no later than 30 days after the date of transfer. items listed above, figure the difference between the amount
included in taxable income for the regular tax and the amount
If the estate or trust acquired stock by exercising an option included in income for the AMT. Treat the difference as a
and it disposed of that stock in the same year, the tax negative amount if (a) both the AMT and regular tax amounts
treatment under the regular tax and the AMT is the same, are zero or more and the AMT amount is less than the regular
and no adjustment is required. tax amount, or (b) the AMT amount is a loss, and the regular
tax amount is a smaller loss, or zero or more.
Increase the AMT basis of any stock acquired through the
exercise of an incentive stock option by the amount of the Enter on line 11 the combined adjustments for the four
adjustment. items, earlier.
Note. If a Form 3921, Exercise of an Incentive Stock Option Line 12—Depreciation on Assets Placed in
Under Section 422(b), was received, it may help you figure
the adjustment. Service After 1986
This section describes when depreciation must be refigured
for the AMT and how to figure the amount to enter on line 12.
2023 Instructions for Schedule I (Form 1041) -3-
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