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CAUTION

The $3,000 capital loss limitation for the regular tax applies separately for the AMT.

2025 Instructions for Schedule I (Form 1041) 3

Don’t include on this line any depreciation adjustment from:

• An activity for which the estate or trust isn't at risk or income or loss from a partnership or an S corporation if the basis limitations under section 704(d) or 1366(d) apply. Take this adjustment into account on line 14;

• A tax shelter farm activity. Take this adjustment into account on line 21; or

• A passive activity. Take this adjustment into account on line 13.

What depreciation must be refigured for the AMT? Generally, you must refigure depreciation for the AMT, including depreciation allocable to inventory costs, for:

• Property placed in service after 1998 that is depreciated for the regular tax using the 200% declining balance method (generally 3-, 5-, 7-, or 10-year property under the modified accelerated cost recovery system (MACRS), except for certain qualified property eligible for the special depreciation allowance (discussed later));

• Section 1250 property placed in service after 1998 that isn't depreciated for the regular tax using the straight line method; and

• Tangible property placed in service after 1986 and before

1999. If the transitional election was made under section 203(a)(1)(B) of the Tax Reform Act of 1986, this rule applies to property placed in service after July 31, 1986.

• Property depreciated under the unit-of-production method or any other method not expressed in a term of years.

• Qualified Indian reservation property.

• A natural gas gathering line placed in service after April 11, 2005.

How is depreciation refigured for the AMT? See

What depreciation isn't refigured for the AMT? Don’t refigure depreciation for the AMT for the following items.

• Residential rental property placed in service after 1998.

• Nonresidential real property with a class life of 27.5 years or more placed in service after 1998 that is depreciated for the regular tax using the straight line method.

• Other section 1250 property placed in service after 1998 that is depreciated for the regular tax using the straight line method.

• Property (other than section 1250 property) placed in service after 1998 that is depreciated for the regular tax using the 150% declining balance method or the straight line method.

• Property for which you elected to use the alternative depreciation system (ADS) of section 168(g) for the regular tax.

• Qualified property that is or was eligible for the special depreciation allowance if the depreciable basis of the property for the AMT is the same as for the regular tax. This applies to any special depreciation allowance, including those for disaster assistance property, reuse and recycling property, cellulosic biofuel plant property, second generation biofuel plant property, New York Liberty Zone property, Gulf Opportunity Zone property, and Kansas disaster area recovery assistance property. The special allowance is deductible for the AMT, and there is also no adjustment required for any depreciation figured on the remaining basis of the qualified property if the depreciable basis of the property for the AMT is the same as for the regular tax. Property for which an election is in effect to not have the special allowance apply isn't qualified property. In addition, if you elect not to have any special depreciation allowance apply, the property may be subject to an AMT adjustment for depreciation if it was placed in service before 2016. It is not subject to an AMT adjustment for depreciation if it was placed in service after 2015.

• Motion picture films, videotapes, or sound recordings.

Property placed in service after 1998. Use the same convention and recovery period used for the regular tax. For property other than section 1250 property, use the 150% declining balance method, switching to the straight line method the first tax year it gives a larger deduction. For section 1250 property, use the straight line method.

How is the AMT class life determined? The class life used for the AMT isn't necessarily the same as the recovery period used for the regular tax. The class lives for the AMT are listed in Rev. Proc. 87-56, 1987-2 C.B. 674, and in Pub. 946, How To Depreciate Property. Use 12 years for any tangible personal property not assigned a class life.

See Pub. 946 for optional tables that can be used to

TIP figure AMT depreciation. Rev. Proc. 89-15, 1989-1

C.B. 816, has special rules for short tax years and for property disposed of before the end of the recovery period.

How is the line 12 adjustment figured? Subtract the AMT deduction for depreciation from the regular tax deduction and enter the result. If the AMT deduction is more than the regular tax deduction, enter the difference as a negative amount.

In addition to the AMT adjustment to your deduction for depreciation, you must also adjust the amount of depreciation that was capitalized, if any, to account for the difference between the rules for the regular tax and the AMT. Include on this line the current year adjustment to taxable income, if any, resulting from the difference.

Line 13—Passive Activities

For AMT purposes, the rules described in section 469 apply, except that in applying the limitations, minimum tax rules apply.