We ask the passive activity questions to help categorize the income or loss from the activity on this form. First, we categorize it as passive or nonpassive. Then, if it's passive, we categorize it as an "active participation rental activity" or other activity.
The categorizations we make are reflected on the passive activity worksheet at the bottom of this form. The passive activity calculations are, in turn, based on these categorizations.
If you disposed of the activity, you should complete Form 4797 to determine your gain or loss and manually carry that amount to Form 4835.
If you "X" the box that indicates that this is a passive activity, then we blank out the box for "non-passive Tax Shelter," to be sure that you don't make inconsistent entries.
The passive activity calculation for the AMT follows through the same calculation as the regular passive activity calculation, but it uses numbers adjusted to reflect AMT adjustments.
On this form, there are two adjustments:
Depreciation. We adjust the "Net Income" by the amount of depreciation adjustments shown on Depreciation Worksheets that specify this copy of Form 4835 as their related form; and
Prior year unallowed loss. Be sure to fill in this field yourself, based on the prior year's unallowed loss for AMT purposes.