Applicability
An individual must use this form to calculate the federal tax payable for the taxation year under alternative minimum tax. He or she must complete Parts 1, 2, and 8 if he or she does not have to pay minimum tax in the current year and he or she is applying a minimum tax carryover from previous years against his or her current-year tax payable.
Alternative minimum tax does not apply to returns filed on behalf of deceased taxpayers, nor to the trustee's return (bankruptcy).
The individual may also have to complete and attach copies of the completed Form T2203, Provincial and Territorial Taxes - Multiple Jurisdictions, depending if he or she has to pay tax to more than one jurisdiction.
Minimum Tax Carry-Over From Prior Years Workchart
If minimum tax paid in prior years was not rolled forward, enter the amounts in the carryforward workchart at the top of the form. This workchart keeps track of the minimum tax paid in the 7 preceding years.
If there is a minimum tax carryover from prior years, it can reduce the current year's "regular" income tax insofar as the current year's "regular" income tax exceeds the current year's minimum tax. This calculation is performed in Part 8 of Form T691.
Capital Gains
Only 80% of capital gains are taxable for minimum tax purposes.
Gains from a mortgage foreclosure or repossession of goods in no way effect the calculation of the minimum tax. The same is true of the portion of capital gains that is tax exempt under the terms of a tax treaty gains from the donation of some capital property, gains received from a testamentary trust and gains from the donation of property (other than those entered on line 23).
Non-Capital Losses Carried Forward
Line (f), located above line 44, allows you to enter any non-capital losses reported on line 25200c of the T1 Jacket and attributable to: CCA claimed on MURBs, films and videos, and depletion allowances claimed on resource investments.
A diagnostic reminds you to check this cell if any claim is made on line 25200c and there is no amount on line 44.
Capital Losses Carried Forward
Enter the non-deductible portion of losses from mortgage foreclosures or conditional sales repossessions on line 142b. Enter the non-deductible portion of losses due to an exemption under a tax treaty on line 142c.
A diagnostic reminds you to check these cells if a claim is made on line 25300b but no claim is made on line 142.
Current Year Loss
Line 49 is updated for the total non-capital loss of the current year which is not fully applied in computing income for regular tax purposes. The unapplied portion of the loss (as calculated on Form T1A) may be used to reduce adjusted taxable income for minimum tax purposes.
A diagnostic tells you when a deduction is claimed on line 49 so that you can modify it if necessary.
See Also
Federal Income Tax and Benefit Guide – Lined 25200 and 25300