Revenue Ruling 23-12-1
Fiduciary Income Tax

 

Computation of 2012 Alternative Minimum Tax to Determine
Nebraska Minimum Tax for the 2012 Nebraska Return

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (Department) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of the Department and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

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In this revised ruling, the Federal Form 6251, line 3 instruction is rewritten to read as follows:

Enter the Federal Form 6251, line 3 amount, less the amount from line 8, Form 1040N.

Issue

How should the alternative minimum tax (AMT) computed for a taxpayer’s 2012 U.S. Fiduciary Income Tax Return, Federal Form 1041, Schedule I, be recalculated to compute the Nebraska income tax?

Conclusion

The federal AMT must be recomputed using the adjustments required by Neb. Rev. Stat. § 77-2717. This will facilitate the computation for items which are reflected differently in the determination of federal taxable income for Nebraska purposes. This applies to any federal schedules or other forms, the results of which are used in calculating the federal AMT.

Analysis

Among the adjustments provided by Neb. Rev. Stat. § 77-2716 are the exclusion from taxable income of interest or dividends from U.S. obligations (Fiduciary Income Tax Regulation 23-004.03A) and the inclusion of interest or dividends from non-Nebraska source state or local obligations. Neb. Rev. Stat. § 77-2716 also provides for the exclusion from Nebraska taxable income of any non-Nebraska income from an S corporation or limited liability company (LLC). Therefore, any associated preference item derived from the S corporation or LLC included in the AMT calculations should be excluded to the same extent in the Nebraska computation.

The specific line entries and the required adjustments in recomputing the minimum tax for the 2012 Nebraska Fiduciary Income Tax Return, Form 1041N, are provided below. Recalculate all total or computation lines to reflect adjustments made pursuant to this ruling. All other entries must be the same as for the federal minimum tax computation.

2012 U.S. Income Tax Return for Estates and Trusts, Federal Form 1041, Schedule I:

Part I –

Part II –

Part III –

Follow federal instructions to recompute the AMT through Part III, line 56 of Schedule I, Federal Form 1041.

Enter line 56, Part III, of the recomputed Schedule I, 2012 Federal Form 1041, on line 1 of the Nebraska Minimum or Other Tax Worksheet. Complete the worksheet to determine the amount to enter on line 9 of the 2012 Form 1041N. The recomputed Schedule I, Federal Form 1041, must be attached to the 2012 Form 1041N when filed.

The add-on minimum tax and the AMT should be recomputed for all taxable years beginning after December 31, 1978. The specific line entries on Federal Form 1041, Schedule I, that are to be altered in the recomputation for Nebraska are provided for the following tax years:

2011 23-11-1;
2010 23-10-1; and
2009 23-09-1.

APPROVED:

Douglas A. Ewald
Tax Commissioner

February 26, 2013