Form 6251 line 4 contains “mortgage deduction adjustment”, calculated using the worksheet on page 2 of instructions. If mortgage is for your main home or your second home, adjustment will likely be 0.
If you’re itemizing your deductions:
– form 1040 line 38 contains your AGI
– form 1040 line 41 contains your AGI less itemized deductions (mortgage interest, state tax, property tax, charitable donations, etc. etc.)
– it’s copied to form 6251, line 1
– most itemized deductions EXCEPT MORTGAGE INTEREST get added back for the purposes of computing AMT; for example, state tax and property tax are added back on line 3.
So, if you own a house, your AMT is reduced by at least 26% of the entire amount you paid in interest, but your regular tax is only reduced by the amount of interest in excess of standard deduction, times your tax bracket.