Fix AMT capital-gains overflow into the 20% bracket below the threshold

[PavelMakarchuk]

Summary

Form 6251 Part III had two compounding bugs that produced an AMT add-on for filers whose AMTI minus exemption sat well below the 20% LTCG bracket threshold ($583,750 MFJ).

Bug 1 — Line 27 (primary): the code read loss_limited_net_capital_gains (the LTCG amount) for Form 6251 Line 27, but the form references "amount from line 5 of QDCG Worksheet or line 21 of Schedule D Tax Worksheet (as figured for the regular tax)" — i.e., the regular-tax ordinary-income portion, the same source already used for Line 20. Reading LTCG instead of ordinary income shrank the 15% bracket window from (20%-threshold − 0%-bracket-room − ordinary) down to (20%-threshold − 0%-bracket-room − LTCG), which is much smaller, so excess gains overflowed into Line 33 (the 20% bracket).

Bug 2 — Line 23/24 (structural): the code computed disregarded_gains = min(L22, L21) × cg_first_rate — the tax at the 0% bracket (always $0) — but then used it in Line 24 (L22 − L23) and Line 32 (L23 + L30) as if it were the amount. With the 0% rate this collapses to "the 0% bracket is invisible to the subsequent computation," which interacted with Bug 1 to compound the error.

Switching Line 23 to the amount and Line 27 to dwks14 (the regular-tax ordinary income, which the code already reads for Line 20) restores faithful Form 6251 math.

Fixes #8292. TAXSIM ticket: #424.

Verification

Reproducer (MFJ, $390,720 LTCG, $65,148 qualified dividends, federal AGI ~$510K, AMTI − exemption = $376,452 — well below the $583,750 20% threshold):

Year	Pre-fix AMT	Post-fix AMT
2018	$13,197	$0
2019	$13,027	$0
2020	$12,684	$0
2021	$12,453	$0
2022	$11,752	$0
2023	$10,025	$0
2024	$8,634	$0
2025	$8,329	$0

Form 6251 line-by-line trace for the 2024 case confirms tentative AMT = ~$46,063 (< regular tax $60,473 ⇒ AMT add-on = $0).

Test plan

• All 55 AMT baseline tests pass (3 existing tests that locked in the pre-fix output were updated to the correct Form 6251 values; 1 new integration test added)
• All 80 federal-income-tax baseline tests pass
• Reproducer returns AMT = $0 across 2018-2025
• make format clean
• CI green

Test changes (existing tests updated)

Three amt_tax_including_cg.yaml cases asserted outputs that the buggy formula produced. Form 6251 line-by-line traces give the corrected values:

• "Income with capital gains in first bracket": $22,700 → $18,200 (correct: 0% bracket consumes the full preferential base)
• "AMT with capital gains in second bracket": $144,086 → $137,392.25 (correct: 0% bracket consumes $44,625; rest at 15%)
• "AMT with unrecaptured section 1250 gains": $230,586 → $223,892.25 (same 0% consumption; §1250 piece unchanged)

🤖 Generated with Claude Code

[codecov]

Codecov Report

✅ All modified and coverable lines are covered by tests.
✅ Project coverage is 100.00%. Comparing base (8cb60e7) to head (ddd5a38).
⚠️ Report is 17 commits behind head on main.

Additional details and impacted files

@@            Coverage Diff            @@
##              main     #8293   +/-   ##
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  Coverage   100.00%   100.00%           
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  Files            3         1    -2     
  Lines           63        41   -22     
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- Hits            63        41   -22     

Flag	Coverage Δ
unittests	100.00% <100.00%> (ø)

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[MaxGhenis]

Reviewed the AMT line-mapping change and boundary tests. The patch keeps Line 23 as an amount for later Form 6251 lines, switches Line 27 to the regular-tax ordinary-income value, and adds tests covering the 0%/15%/20% capital-gains boundaries plus the TAXSIM reproducer. No blockers from my review.