Yes, the AMT applies to domestic income. Some reasons for being assessed AMT include:
- Exercising or selling ISOs (incentive stock options)
- Deducting interest from a large second mortgage for a house, boat or recreational vehicle
- Realizing a large capital gain (for example, when you sell a home or other investments for a profit)
- Having a household income greater than the phase-out thresholds (while also having a significant amount of itemized deductions)
Click this link for more detailed info on AMT (Alternative Minimum Tax).
If you are claiming a Foreign Tax Credit (maybe for foreign tax reported on a 1099-Div) and are subject to AMT, you are asked about the Simplified Method.
If you are not subject to AMT this year, you can Delete Form 6251 from your return and you will not get the question. By choosing the Simplified Method, you are saying that you want to use the same calculation for foreign tax credit for AMT as used for regular tax.
In all likelihood, you would not want to revoke the election, since AMT is a higher tax.
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