How to report specified private activity bond interest dividends?

Question

From http://voices.yahoo.com/how-report-amounts-form-1099-div-2439-11819489.html, I learned that

Specified private activity bond interest dividends reported in box 11 of 1099-DIV is the portion of tax-exempt interest dividends reported in Box 10 that may be subject to an Alternative Minimum Tax (AMT).

They are included in the alternative minimum tax calculation on Form 6251 if you are subject to that tax.

I wonder how to know if I am subject to AMT, and therefore need to include specified private activity bond interest dividends in Form 6251?

Btw, my Specified Private Activity Bond Interest Dividends is $0.51.

Thanks!

Answer 1

If you want to know if you're subject to AMT, then you are subject to AMT. Everybody is.

To calculate the AMT, you should use form 6251. If you end up with additional AMT adjustment on your 1040 - you should also attach the form 6251 to your 1040.

If your total income is significantly below the AMT exemption amount, you're probably not required to make AMT adjustment and can save yourself some time by skipping the form, but if you're not sure - filling the form 6251 is the only way to know.

From what you've shared so far ($20K total gross income, < $1 AMT adjustment) - you're probably way below the thresholds and can skip it. But don't take my word for it - you can do the math on the form 6251, if only as an exercise.

Answer 2

Specified Private Activity Bond Interest Dividends are tax exempt. Report them on Form 1065 Box 18

Box 12. Specified Private Activity Bond Interest Dividends Enter exempt-interest dividends paid by a RIC on specified private activity bonds to the extent that the dividends are attributable to interest on the bonds received by the RIC minus an allocable share of the expenses. Generally, “specified private activity bond” means any private activity bond defined in section 141 and issued after August 7, 1986.